Sellers charging paypal/credit card fees. Your opinion?

[infest]

This drives me nuts. I run a liquor store. If I were to tell all of my customers they had to pay my credit card fees for me. They'd go elsewhere. I think it's tacky. The way I see it is. If you want to run a business you have to realize you are going to have 2 pay money to make money.

Yes I know you can easily say "No one is forcing you to buy from them." And I agree. I don't buy from sellers that do this.

What are y'alls thoughts on this?

 

[dom_poppa]

I don't like it either.

As someone that has owned a business, we only charge credit card fees if someone spends $1. I can't believe they don't have a dollar in their pocket. I was brought up to have at least $100 in your pocket. You never know when you are @ssed out and need cold hard cash.

Well, anyways, I think it sucks because these are high ticket items and to force fees on a customer is stupid. Sellers should pay for the fees since the merchant protects them. They only use these merchants because it protects them.

For something as expensive as cues, I think a money transfer should be done or the sellers should pay for their own damn fees.

Then again, you are dealing with the pool industry. Probably the cheapest industry around when it comes to trying to save a buck. Pool players are cheap and it trickles down to even the guys trying to sell pool products. This is a fact and I dare anyone to refute this. Look at all the guys trying to sell their used pool cues for full price or for a profit.

 

[JB Cases]

Don't lump everyone together. I don't charge anyone the fees. Sellers should just add the 3% in before they list a price and then there is no need for a discussion.

Some buyers ask me if they should send the money as a gift to save fees and I always respond that it's the cost to me for using paypal.

Now honestly though I think paypal's fees are way too high but that's another topic. They charge credit card rates even when moving money between paypal accounts and that's just way too much for what they do.

If you put $1000 into paypal they own it all in about 150 transactions.

Dwolla on the other hand which is more cumbersome to set up and use only charges .$25cts. It would take about 1200 transactions for them to get your $1000.

I wish everyone would use Dwolla. But Paypal is the BIG DOG and they are simply everywhere.

 

[JAM]

With my limited business experience, the way I understand it, it is illegal to charge credit card fees.

One can charge "shipping and handling," but to charge fees to someone who uses a credit card, that is illegal in my neck of the woods. In fact, the merchant account holder could be fined for doing so.

 

[JB Cases]

With my limited business experience, the way I understand it, it is illegal to charge credit card fees.

One can charge "shipping and handling," but to charge fees to someone who uses a credit card, that is illegal in my neck of the woods. In fact, the merchant account holder could be fined for doing so.

It is against the law the to attach a surcharge for credit card fees. It is however permissible to have a "cash price" or a cash discount.

 

[JAM]

It is against the law the to attach a surcharge for credit card fees. It is however permissible to have a "cash price" or a cash discount.

How would that work? The only way you could get a cash price, I am thinking, would be an in-person transaction? That isn't feasible for some businesses, I guess, though I can see how that would be advantageous.

I know some dentists discount fees for those who pay the whole bill at the time services are rendered. I guess that is kind of like a cash discount, even if somebody uses their credit card.

The thing is, the merchant account process people charge the business anywhere from 2 percent to 5 percent for processing the transcription. It's a joke. Somebody needs to investigate them because it's highway robbery what they are doing to businesses, especially small businesses.

I have been thinking about reporting their business practices to the CFPB. Just haven't found time to do it yet.

 

[doitforthegame]

Ahhhh....the old freedom of choice thing. Don't like paying the paypal fees? Don't buy the product. Problem solved.

 

[JB Cases]

How would that work? The only way you could get a cash price, I am thinking, would be an in-person transaction? That isn't feasible for some businesses, I guess, though I can see how that would be advantageous.

I know some dentists discount fees for those who pay the whole bill at the time services are rendered. I guess that is kind of like a cash discount, even if somebody uses their credit card.

The thing is, the merchant account process people charge the business anywhere from 2 percent to 5 percent for processing the transcription. It's a joke. Somebody needs to investigate them because it's highway robbery what they are doing to businesses, especially small businesses.

I have been thinking about reporting their business practices to the CFPB. Just haven't found time to do it yet.

It works like this.

Price: $40

Cash Price: $38 Which obviously works only if you can physically pay cash.

Actually the merchant account folks are justified in their charges. When a card is charged and money is paid to the merchant then it's the credit card processor fronting the money to the vendor on top of having to maintain all the apparatus to make the transaction happen. It's not highway robbery, it's the cost of convenience for the buyer and the merchant. Part of the fee also goes back to the credit card companies.

Paypal on the other hand is NOT fronting any money to anyone when you receive a payment. If that payment is from another paypal account then it's literally an instant debit from one account and credit to another in milliseconds. Yet they still charge credit card rates to do this if the receiver is a business account.

 

[JAM]

It works like this.

Price: $40

Cash Price: $38 Which obviously works only if you can physically pay cash.

Actually the merchant account folks are justified in their charges. When a card is charged and money is paid to the merchant then it's the credit card processor fronting the money to the vendor on top of having to maintain all the apparatus to make the transaction happen. It's not highway robbery, it's the cost of convenience for the buyer and the merchant. Part of the fee also goes back to the credit card companies.

Paypal on the other hand is NOT fronting any money to anyone when you receive a payment. If that payment is from another paypal account then it's literally an instant debit from one account and credit to another in milliseconds. Yet they still charge credit card rates to do this if the receiver is a business account.

Here is what merchant account providers are doing today to small businesses.

Every 6 months, they raise their rate a half percent. If you don't call the merchant account and ask to have your account reviewed, the half percent stays. Before long, a small business is paying 5 and 6 percent to process a charge, when others called and got that half percent waived. I think this is discriminatory to small businesses.

I don't mind paying a fee, but the way these merchant account providers are operating, it's like they change the rules and make it benefit them. Just like the credit card companies used to do when they would say, "Come with us and enjoy zero percent for 12 months." Before the 12 months, you get a letter saying your rate is increased to 18 percent. You can keep the zero percent, though, if you "OPT OUT."

This practice is *exactly* what the merchant account providers are doing today to small businesses. It should be illegal. They should not have that ability to rip off the small businesses. It is a form of fraud, IMO.

The CFPB is holding credit card companies accountable today for their bait-and-switch tactics. I think the merchant account providers need to be investigated.

 

[JAM]

As far as PayPal goes, they are in a different category than merchant account providers, IMO.

Somebody told me that Intuit offers a good merchant account processer solution, though I have never investigated it.

 

[Pushout]

NPR section, please.

 

[fastone371]

It works like this.

Price: $40

Cash Price: $38 Which obviously works only if you can physically pay cash.

Actually the merchant account folks are justified in their charges. When a card is charged and money is paid to the merchant then it's the credit card processor fronting the money to the vendor on top of having to maintain all the apparatus to make the transaction happen. It's not highway robbery, it's the cost of convenience for the buyer and the merchant. Part of the fee also goes back to the credit card companies.

Paypal on the other hand is NOT fronting any money to anyone when you receive a payment. If that payment is from another paypal account then it's literally an instant debit from one account and credit to another in milliseconds. Yet they still charge credit card rates to do this if the receiver is a business account.

I do not really mind paying the merchant fees on credit card transactions. I always looked at it like this is a sale that I might not have made if I did not accept credit cards. As a merchant besides buying the equipment I paid a 3% fee on all transactions or $25.00 per month, whichever was greater. My biggest credit card transaction to date was $8k, thats $240.00 for merchant fees, thats a lot but if I didnt accept credit cards maybe I dont make the sale at all. I also had customers regularily buying additional services/parts because they could put it on a credit card.

 

[dom_poppa]

Paypal was first created for peer to peer transactions. The little guy that wants to sell to the other little guy. Therefore, buyer helps cover the expense of seller's fees. Pretty fair.

Then eCommerce took off and people have been setting up legitimate businesses but the practice remains. These legitimate businesses are making customers pay for their fees.

Personally, I am against using Paypal and recommend other alternatives.

 

[dom_poppa]

Ahhhh....the old freedom of choice thing. Don't like paying the paypal fees? Don't buy the product. Problem solved.

Probably why you don't own a business. You will lose customers from an owner's point of view. You have to pay for doing business.

Has it deter me from buying a certain product because the seller wants me to pay his Paypal fees and his ability to do business? No.


BUT.....for a high ticket item....these are the very same people that wouldn't accept a bank transfer to save on fees but rather have me Paypal them the money.

At one point it was common courtesy to split the fees in half. Pay your half and I pay my half.

 

[doitforthegame]

Probably why you don't own a business. You will lose customers from an owner's point of view. You have to pay for doing business.

Actually- I do own a business. And have owned several of various sizes though out the years. I just wouldn't ask for the fees. I agree with the OP. Makes you look cheap. I would do exactly as JB said, build it into the price. Transparent, neat and tax deductible.

Has it deter me from buying a certain product because the seller wants me to pay his Paypal fees and his ability to do business? No.

Agree-- and there is that freedom of choice thing. You want it, you pay it.


BUT.....for a high ticket item....these are the very same people that wouldn't accept a bank transfer to save on fees but rather have me Paypal them the money.

At one point it was common courtesy to split the fees in half. Pay your half and I pay my half.

You have to remember there are really no "big business" on this site. Just regular folks trying to make or recover a buck. But if you are a legit business and you ask for the fees, I'd just go somewhere else. Just like I do when the gas station wants more for cash or charge. My choice.

 

[maxeypad2007]

Only municipal utilities and government entities can charge processing feeds. If a store charges even a credit card minimum that is technically in breach of their processing agreement (not illegal just in breach of their agreement with the processor).

 

[wrickyb]

YES it is now legal to charge a fee at checkout. See this one article and there have been many this year with some stores coming out and saying they will never charge a fee up to 4% but there are limits.

http://www.practicalecommerce.com/a...s-Can-Now-Charge-for-Credit-Card-Transactions

U.S. Merchants Can Now Charge for Credit Card Transactions
January 31, 2013

This was a major news item earlier this year.

 

[Double-Dave]

In my opinion there are 2 ways as a seller to handle thing like shipping costs and paypal fees:

- Option 1 is make your products around 5% more expensive and do not charge shipping (or maybe have a real low minimum to get free shipping) or paypal / creditcard fees.
- Option 2 is leave your products at the lower price and charge shipping (or have a high minimum to get free shipping) and paypal / creditcard fees.

Either way the fees/costs have to be paid and they will be passed on to the buyer one way or another.
I have always chosen option 2 since I feel option 1 is unfair to my customers that do not pay with paypal or in regards to shipping do not make really small orders.

With option 2 I am giving my customer a choice, with option 1 I am making it for him/her.
That is my story and I am sticking to it.

gr. Dave

 

[cueaddicts]

nice post, Double-Dave...

Since the market is so challenging lately and many here seem to always want to haggle on price no matter what, it seems some sellers have started posting their 'best cash price' (check or mo) from the start.

What's more interesting is even if you post a 'best cash price' that's hundreds below the an items real street value, many will assume you're desperate or something and will low-ball you anyway.

It seems here lately, there's always something to complain about. Damed if you do, damned if you don't.

Guess if it wasn't over pp fees, it would be something else. :shakehead:

 

[JAM]

YES it is now legal to charge a fee at checkout. See this one article and there have been many this year with some stores coming out and saying they will never charge a fee up to 4% but there are limits.

http://www.practicalecommerce.com/a...s-Can-Now-Charge-for-Credit-Card-Transactions

U.S. Merchants Can Now Charge for Credit Card Transactions
January 31, 2013

This was a major news item earlier this year.

How interesting! Thanks for the link, but this rules ruins it:

Merchants must surcharge Visa and MasterCard on the same terms and conditions as any equal or higher cost competitor that imposes limits on surcharging. This may mean that if the merchant accepts a card brand that does not allow surcharging — such as American Express — the merchant will not be allowed to surcharge the Visa and MasterCard credit card transactions. Merchants need to review the regulations with their provider.