why do people add cost for paypal

[WQ59B]

I think another factor is the total overall fees online sellers see now. Like someone above mentioned; eBay for example is taking a bite out of the shipping charge- that sounds insane to me, as they're not in anyway involved in that aspect of the deal.

I sold an item on eBay this fall for an even $300. Final value & shipping fee bite was 36.65, and PayPal's bite was 14.59, for a total of $51.24 taken out of the $300. On a random item here or there, I guess some would call that the 'cost of doing business', but when you chart these transactions and look at the bottom line, it adds up. IMO, it's getting to be too big of a bite, esp if you have money invested in the items to begin with.

 

[turdferguson13]

I think another factor is the total overall fees online sellers see now. Like someone above mentioned; eBay for example is taking a bite out of the shipping charge- that sounds insane to me, as they're not in anyway involved in that aspect of the deal.

I sold an item on eBay this fall for an even $300. Final value & shipping fee bite was 36.65, and PayPal's bite was 14.59, for a total of $51.24 taken out of the $300. On a random item here or there, I guess some would call that the 'cost of doing business', but when you chart these transactions and look at the bottom line, it adds up. IMO, it's getting to be too big of a bite, esp if you have money invested in the items to begin with.

I know what you mean. I hate that ebay and paypal both charge you fees. Price to pay to get a large group of consumers.


And personally, I do not like the ads that say add 3% for paypal fees and especially the ones that say gift only! Just add the 3% in with the cost of the item in your ad.

 

[kythri]

On a random item here or there, I guess some would call that the 'cost of doing business', but when you chart these transactions and look at the bottom line, it adds up. IMO, it's getting to be too big of a bite, esp if you have money invested in the items to begin with.

So, either price accordingly (eBay and PayPal are pretty up-front with their fee structure, so you should know what you're going to get charged before you list an item) or find a different marketplace and payment processor.

I mean, with eBay, you're getting the use of an established commerce site with millions of shoppers and with PayPal, you're getting the use of a payment processor without having to sign up for a credit card/merchant account (which, I would point out, charges about the same rate as PayPal).

What's the no-fee alternative? Craigslist and personal checks? The structure of CL (segregated based on localities) hasn't the audience of eBay, and sending/accepting personal checks? Yeah, no thanks.

I'll bypass sellers that expect me to send a check or money order. $3 on a $100 item is worth not having to wait for the mail to deliver the payment.

 

[iroc409]

It's kind of ridiculous on *both* sides of the equation. We're talking about 3%. It's a hassle to figure it out, a pain in the rear, and honestly, it probably costs more to deal with things like money orders and paper checks than to just give PayPal 3% for the simplicity as a seller. We're talking about $3 per $100. If it's that much of a burden on a seller, they're probably not making much money anyway. Most companies have pretty high profit margins, like 50%, and sure--a major company is going to feel the pinch over tens of thousands of transactions, but they're not charging for it. When was the last time Walmart or Target charged for a Visa transaction?

And, on the buyer's end, if you want it, it's 3%. I think it's dumb for sellers to charge it, but whatever. I usually don't buy from those sellers, but I also have never charged anyone the PayPal fees myself when I've sold stuff--and I've sold plenty. If it was something I wanted, and the buyer's convinced they have to charge extra, I'll pay it--just like negotiating any deal.

It's WAY easier to deal with than having to make a trip to the bank, futz around waiting for cleared checks, etc. I've heard of the hassle people deal with to buy from Bud's Guns because they don't take Visa or whatever, and it's a major pain in the rear.

 

[WQ59B]

Is it always $3/100? Like I posted above, I was charged $14.29/300.

Either way, on straight internet sales that PP charge isn't bad at all. It's just PP plus eBay together, when you sell via that, that's getting ridiculous. But agreed- the exposure cannot be approached elsewhere, so they gotcha.

 

[Fordman7795]

Is it always $3/100? Like I posted above, I was charged $14.29/300.

Either way, on straight internet sales that PP charge isn't bad at all. It's just PP plus eBay together, when you sell via that, that's getting ridiculous. But agreed- the exposure cannot be approached elsewhere, so they gotcha.

It is a small fee plus a percentage. Usually $.30 plus 2.9%. Was your transaction with a foreign buyer? Transactions involving currency exchange are higher.

 

[iroc409]

Is it always $3/100? Like I posted above, I was charged $14.29/300.

Either way, on straight internet sales that PP charge isn't bad at all. It's just PP plus eBay together, when you sell via that, that's getting ridiculous. But agreed- the exposure cannot be approached elsewhere, so they gotcha.

For Joe Shmoe, PayPal lists their fees as 2.90% + $.30 per transaction. If you combine it with eBay's fees, it gets pretty hefty. They show 2.2% for merchants, so I guess if you have a merchant account it's a good thing as you're charging 3% on top of the transaction, and not paying 3% worth of fees (for high volume merchants). I don't see anything above that rate on their site for fee schedules, other than international.

Why aren't people charging for eBay fees on their auctions?

 

[mrbreezeet1]

I see your point, But If I charge someone say $5.00 for fees, or charge an extra $5.00 on to the selling price, to me, it is the same (difference)

why do guys selling tools in the classified add 3% for paypal transactions

most people here use paypal, hardly anyone uses money orders anymore, this is 2013.

the added cost for paypal should be banned, and people should price the items accordingly. just venting, I'm tired of seeing this all the time. paypal protects buyers from shisty sellers, they do need to make a profit as they are providing a service. so when you price your item for sale, understand that you'll be paying a fee, and make the price using that information. pay pal collects money from the seller not the buyer, why do you make it the buyers responsibility?

any other thoughts or opinions?????

no, i didn't buy anything, i was interested in something, then saw the extra fee listed. it turns me off completely to the sale. not a crybaby cause I'm shining light on some shady selling techniques.

Don't know if I'd call it "Shady"

 

[loranger]

I definitely wouldn't call it "shady" since they are being up front about it. I buy/trade/sell a lot locally since I am very impatient and like getting stuff now. If I do sell something here or on ebay it is because it wouldn't sell locally. I see the fee as the cost of getting to a larger audience.

If I see someone charging the 3% here or another free listing site, I just pass over it. Not because I can't "afford" the item, but on principle.

 

[Pumpman1968]

I really don't understand the issue. It's a fee involved with the sale..........add all the fees ie shipping/item cost/handling charges etc and you have your cost.

Similar thing with selling on Ebay. Ebay has this big push to list items with "free" shipping. Seems as though their research shows buyers like "free" shipping. I asked them which carrier will ship items for free........they said....none. How can it be free? You have to add the cost in somewhere.....and sellers add it to the item price.

What is the difference if the costs are all lumped together or listed separately? When you buy something, either way, you still pay them.

Do you ***** when an item is listed as "Buy 1 get 1 free"? Of course not........you think it's a deal! But, if you look, the first item is probably double the cost...........DUH!

NOTHING IS FREE!

 

[Davefr]

If I see someone charging the 3% here or another free listing site, I just pass over it. Not because I can't "afford" the item, but on principle.

^^^^+1.

I would call it an unethical business practice. It's against general commerce (including PP) to add surcharges for credit card/Paypal use.

However it's acceptable to include a discount for other payment methods, etc.

The sellers that add the 3% are stupid!! They just repel many potential buyers with this shady practice. They could accomplish the same thing by simply adding the 3% to their price and no one would even care.

I guess there's no cure for stupid!!

 

[byoungblood]

I've always managed to sell plenty of stuff advertising that I will charge an extra 3% for PayPal. If you don't like it, you are free to go elsewhere.

I am aware of the classifieds on one site that does not allow people to charge for PayPal so I just have to build into the price there. However, since they have gotten so militant about it, I don't take it out of the price if someone is paying by money order, unless they're buying a large amount of goods from me.

On the flip-side, I don't for this attitude buyers have gotten that a seller should just bend over backwards and eat all the PayPal fees, handling charges, shipping, etc. That is a HUGE reason why I cut back on my selling on eBay. Once they started cracking down on people surcharging PayPal after they bought them, and on top of it, started charging PayPal fees on shipping, my eBay activity has decreased considerably.

 

[Davefr]

On the flip-side, I don't for this attitude buyers have gotten that a seller should just bend over backwards and eat all the PayPal fees, handling charges, shipping, etc.

Profit = Sale price - Cost of goods sold

Bundle all your selling fees into "cost of goods sold". The buyers pay this whether they realize it or not. (you're just not rubbing their face in it). It's called marketing.

If your not meeting your profit goals then your business model is wrong.

Adding petty fees just makes you look like an untrustworthy amateur.

 

[loranger]

Adding petty fees just makes you look like an untrustworthy amateur.

This exactly.

 

[thesilverone]

Don't buy from sellers if you don't like their terms.

don't encourage that. the classifieds section sees less traffic now than before.

 

[Fastbird]

Between ebay and paypal anymore, you can figure on losing 12% or a little more if you sell something on feebay. That's a pretty large chunk, and people are hating it, but there's really no truly viable alternative for reaching such a large potential customer base and easy of access for receiving payments. I shudder to think how much profits ebay/paypal actually pull in from the gross fee's they take in anymore.

 

[aafadca]

I don't use Paypal. I prefer cash, check or money orders. I've had to pass on several Ebay buys because they ONLY accepted Paypal.

 

[ihateminimumwage]

Between ebay and paypal anymore, you can figure on losing 12% or a little more if you sell something on feebay. That's a pretty large chunk, and people are hating it, but there's really no truly viable alternative for reaching such a large potential customer base and easy of access for receiving payments. I shudder to think how much profits ebay/paypal actually pull in from the gross fee's they take in anymore.

I've been selling a LOT of stuff on eBay lately, and in the end they do rack up the fees.
It is nice to be able to keep track of views/watchers though, and have stuff move pretty quick when listed with 'Buy it Now (or best offer)'. I think that's why I don't list much in the classifieds here anymore. That, and it's in no way worth the time and effort to ship out individual sockets instead of selling as one lump set.
One thing that annoyed me, but in the end got a chuckle was ebay offering shipping rate discounts on flat rate boxes (About $1 a box) over the post office. When I looked over my seller statement, they were charging about the same or more per shipment in fees for getting my label through them instead of the post office.
Once the fed jumps in and starts trying to enforce sales tax on eCommerce, I'll probably be getting out of it altogether.

 

[Fordman7795]

One thing that annoyed me, but in the end got a chuckle was ebay offering shipping rate discounts on flat rate boxes (About $1 a box) over the post office. When I looked over my seller statement, they were charging about the same or more per shipment in fees for getting my label through them instead of the post office.

Expand upon this. I think your line of thought is mistaken

 

[ihateminimumwage]

Expand upon this. I think your line of thought is mistaken

When you purchase a flat rate shipping label through ebay, they list that they've given you a discount on the cost (Usually about $1). When you go to your account summary and look under the 'Fees' tab, they charge $1 for 'Final Value Fee on Shipping' on each sale that you printed the label through them.

 

[DandDMachine]

I don't understand the frustration here. If you don't like the fees, you don't have to buy the item. If an item is $100 plus 3% for paypal fees you are paying $103. If the same person sets his price at $103 and doesn't tell you about the paypal fees you are still paying $103. The cost is the same either way. The difference is an extra sentence that you have to read. There is nothing shady about it. They are up front in their pricing. This allows the person who like myself who almost always pays in cash to save themselves $3.

 

[Agentwho]

I dont have a problem with people charging what they need to cover thier overhead. Its nice when sellers go ahead and figure the cost up and give a nice easy round number to the buyer. Either way as long as all the cost are up front I'm fine with it, what I dont like is after the deal is made they come back and say you need to add x $ for this or that. My scam alarm goes off when a seller ask to have the paypal sent as a gift.

About ebay shipping I think they started charging a fee on it because to many people were charging outrages shipping charges on a 99cent auction to avoid payimg fees.

 

[Fordman7795]

When you purchase a flat rate shipping label through ebay, they list that they've given you a discount on the cost (Usually about $1). When you go to your account summary and look under the 'Fees' tab, they charge $1 for 'Final Value Fee on Shipping' on each sale that you printed the label through them.

Yes, ebay charges fees on the shipping cost. But it doesnt matter if you print the label thru ebays service or directly at the post office you will still get charged final value fees on the shipping cost you charged.

 

[Davefr]

Yes, ebay charges fees on the shipping cost. But it doesnt matter if you print the label thru ebays service or directly at the post office you will still get charged final value fees on the shipping cost you charged.

Ebay also gives you a discount off the USPS or FedEx counter rates. (except for parcel post). The discount is usually greater then the fees they tack on.

 

[Fordman7795]

Ebay also gives you a discount off the USPS or FedEx counter rates. (except for parcel post). The discount is usually greater then the fees they tack on.

That is not what is being debated. He said they charge a fee for using the ebay shipping service which is not true.

 

[PugetDude]

IMO,This thread is indicative of the larger sense of "something for nothing" pervasive in the low-information, pop-culture populace due to a lack of understanding of math, commerce, and economics.

Here's a helpful quiz:


1. If an item from seller A costs $100 plus 3% for Paypal and $19.95 for shipping what is your net cost?

A) $122.95
B) It doesn't matter, I don't like paying Paypal fees.
C) Umm.....$125?
D) It's impossible to know, you'd have to be like Sheldon on the Big Bang Theory to figure it out.

2. If Seller B offers the exact same item for $123.00 with free shipping is it a better deal?

A) Yes
B) It doesn't matter, I like that he isn't charging for Paypal.
C) No
D) Is it in stock in my size?


3. Which Selller has a competive advantage over the other?

A) Seller A
B) Britney
C) Seller B
D) Arsenio
E) none of the above; it's the dude with the most awesome website.

 

[Davefr]

That is not what is being debated. He said they charge a fee for using the ebay shipping service which is not true.

You're right. The fee is based on the grand total of the transaction.

 

[purplezr2]

IMO,This thread is indicative of the larger sense of "something for nothing" pervasive in the low-information, pop-culture populace due to a lack of understanding of math, commerce, and economics.

Here's a helpful quiz:


1. If an item from seller A costs $100 plus 3% for Paypal and $19.95 for shipping what is your net cost?

A) $122.95
B) It doesn't matter, I don't like paying Paypal fees.
C) Umm.....$125?
D) It's impossible to know, you'd have to be like Sheldon on the Big Bang Theory to figure it out.

2. If Seller B offers the exact same item for $123.00 with free shipping is it a better deal?

A) Yes
B) It doesn't matter, I like that he isn't charging for Paypal.
C) No
D) Is it in stock in my size?


3. Which Selller has a competive advantage over the other?

A) Seller A
B) Britney
C) Seller B
D) Arsenio
E) none of the above; it's the dude with the most awesome website.

Problem 1 none of the answers are correct. You would have to pay the 3% on 119.95+ the $.30 transaction fee for a total of 123.85

 

[Bobdog]

Personally, I agree with the OP.

I've bought quite a few things off here, but if I see "3% Paypal Fee", I won't buy the item and in fact, most times I don't even read the rest of the ad. It may not be a shady business practice, but it just seems like one, and that's enough for me.

It's my money, and I'll spend it how I please, if you don't want to take it from me, that's perfectly fine also.

 

[signcrafter]

Personally, I agree with the OP.

I've bought quite a few things off here, but if I see "3% Paypal Fee", I won't buy the item and in fact, most times I don't even read the rest of the ad. It may not be a shady business practice, but it just seems like one, and that's enough for me.

It's my money, and I'll spend it how I please, if you don't want to take it from me, that's perfectly fine also.

Who says they don't want to take your money? They will take it. So you would rather the seller just add 3% into the price of the tool to cover the fees. Or you think the seller should pay to accept your money?

 

[Davefr]

Who says they don't want to take your money? They will take it. So you would rather the seller just add 3% into the price of the tool to cover the fees.

I think what most everyone is saying is that adding 3% is petty, unprofessional and poor marketing vs. bundling it into the price. When you sell direct to another person you want to inspire confidence/trust. This does just the opposite.

Or you think the seller should pay to accept your money?

Just about every reseller on the planet has costs associated with accepting money. It's part of the cost of doing business.

 

[signcrafter]

I think what most everyone is saying is that adding 3% is petty, unprofessional and poor marketing vs. bundling it into the price. When you sell direct to another person you want to inspire confidence/trust. This does just the opposite.



Just about every reseller on the planet has costs associated with accepting money. It's part of the cost of doing business.

Right it's part of the cost of doing business that ultimately gets passed on to the buyer in one way shape or form. To me it really doesn't make a difference if it's built into the price or on top of it. When I buy something on ebay or online or in person all I look at is the total cost. If I don't like the total cost I don't buy it, simple.

To me adding paypal fees on top is no different then adding shipping on top of the sale price. Is it shady to say 11.55 added to the item price for shipping? Paypal fees are no different then shipping costs, they all are part of the price of doing business which has to get passed onto the customer.

To me there is no difference in saying "add 3% for paypal fees if you use paypal" and "a 3% discount for paying with cash". In the end they are both the same.

 

[BFBOB]

Would you rather the seller accept only Postal Money Orders?
You the buyer would then have to pay $11.68 for that $10 wrench. ($1.20 for the MO + .48 to mail it).

(To be fair, it does become a better deal on more expensive items. That $1.68 will get you a MO for up to $500.)

 

[Bobdog]

Who says they don't want to take your money? They will take it. So you would rather the seller just add 3% into the price of the tool to cover the fees. Or you think the seller should pay to accept your money?

Yes, I think the seller should calculate the cost of his overhead and price the merchandise appropriately.

To the second question, yes, I think the seller should honor the terms of the agreement he entered into with Paypal and not charge the additional fee or ask for gift payments.

Thirdly, if the seller doesn't want to sell to me, that's his right and I have no problem with that, but it's likely not going to be an issue, since I probably won't buy from him to begin with.

I will also drive right past any gas station with a two price policy and head straight to Wawa, which doesn't charge the extra 3%, unless I'm desperately low on fuel (I'm not the only one, might explain why Wawa has been putting the competition out of business at an exponential rate for the last 10 years, food for thought).

 

[Davefr]

To me adding paypal fees on top is no different then adding shipping on top of the sale price.

To me there is no difference in saying "add 3% for paypal fees if you use paypal" and "a 3% discount for paying with cash". In the end they are both the same.

I agree BUT:

The difference is that there's no other form of commerce that I'm aware of that tacks on an add on fee to the buyer for payment processing. It's simply not a generally accepted/ethical business practice at least here in the US and in fact a violation of many commerce standards. (like Paypal, credit card company, and other T's and C's).

So given a choice of pricing strategies, why would a seller that wants to inspire confidence go against generally accepted business practices?

Yes, your examples result in the same $ outcome but with significantly different buyer reactions. When I sell I want to maximize buyers interest, not repel them!!

 

[ihateminimumwage]

That is not what is being debated. He said they charge a fee for using the ebay shipping service which is not true.

D'Oh! That's my mistake, didn't think about that. I just spotted the charge for shipping recently. Doesn't make much sense to charge a fee if you don't go through them for your shipping, but what do I know.

 

[Evan(CA)]

I just can't get over the fact that some people can't seem to grasp 103=100+3%. Or maybe you do understand it but you want to somehow trick yourself into thinking one is a better deal? Is a 100 dollar item with free shipping a better deal than an 85 dollar item and a 15 dollar shipping cost? I just don't get it.....

 

[Fordman7795]

D'Oh! That's my mistake, didn't think about that. I just spotted the charge for shipping recently. Doesn't make much sense to charge a fee if you don't go through them for your shipping, but what do I know.

Its not a shipping service fee. Its a total cost of sale fee. People were selling $100 items for $1 and $99 shipping so there were only fees on the $1. This way there is no way around it.

 

[Fishplate]

How about I offer you a 3% discount for not using PayPal? Is that different?

 

[Davefr]

How about I offer you a 3% discount for not using PayPal? Is that different?

Yes, significantly for the reasons I already stated.

Discounts for cash are a generally accepted business practice that's been around forever.

Ad on fees for payment processing are not.

It's called effective marketing.

Start up a business and and put a sign in your window that says you'll ad 3% processing fees to the marked prices and see how successful you'll be!!