Sellers charging paypal/credit card fees. Your opinion?

[KMRUNOUT]

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.

Jenny,

As a small business owner, I must say the situation you portray seems highly unusual. There is quite a bit of competition these days for "merchant services" (i.e. credit card processing). My rate has stayed the same for many years without any phone calls. If it didn't, I would drop them in a heartbeat and go somewhere else. I think anyone who owns a small business and doesn't notice that their credit card fees are 5%...6%...18%...they should do something else with their lives. You can get 2.5% from Bank of America tomorrow lol.

KMRUNOUT

 

[JAM]

Jenny,

As a small business owner, I must say the situation you portray seems highly unusual. There is quite a bit of competition these days for "merchant services" (i.e. credit card processing). My rate has stayed the same for many years without any phone calls. If it didn't, I would drop them in a heartbeat and go somewhere else. I think anyone who owns a small business and doesn't notice that their credit card fees are 5%...6%...18%...they should do something else with their lives. You can get 2.5% from Bank of America tomorrow lol.

KMRUNOUT

If you have a storefront, the charges are cheaper. If you never see the credit card in your hand and punch numbers in a terminal or online, they charge more to these merchants.

I'm using one of the top leaders, unfortunately. I've shopped around several times. The others are worse. I don't have any monthly minimum, which is cool -- well, it was cool when I first started out.

I'm paying $5 a month, no individual transaction fee, but 3.45 percent right now on Master and Visa, and believe it or not, my AMEX is only charging me 2.9. I don't get it. Most people hate AMEX because of the fees, yet they are cheaper for me.

 

[lakeman77]

it's the cost of doing business, you just have to eat it. not a big deal.
as you said, build it into the price. sellers normally pay shipping anyway, so what.
I agree, it's tacky to charge extra 3%.

 

[shinobi]

I don't mind if someone wants to ask for Paypal charges as long as it is disclosed up front.

What I don't like is if there is no mention of Paypal fees anywhere in an ad posting, then an agreement to purchase is made, and suddenly a "Don't forget to add 3% for Paypal" addendum is thrown in. That is crap.

 

[blucollar]

Its part of accepting PayPal...u should never ask buyers to cover YOUR fees. It is classless. If you don't like the fees...don't accept PayPal. One poster was correct..how about you cover retailers fees every time you swipe your credit card...although I will admit..the PayPal fees are a bot too much. When you post an item factor in your fees in the asking price...don't ask buyers to cover it. Its personally a deal breaker for me instantly. But to each his own...just my useless two Lincolns.

 

[trob]

I was surprised when I recently saw this to. A real business man would figure every cost into his price so fees would be a non issue. I did a lot of ebaying before it the fees got out of hand and my buy it now price always was made with all fee's in mind.

 

[JB Cases]

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.

I haven't used a merchant account in along time but I have shopped for them and I don't recall these tactics being discussed. As Kerry pointed out it is a very competitive business and while there are certainly some less scrupulous operators most fall within a pretty tight scope of what they do with customers.

Paypal is actually not too bad in this regard. They make it possible to accept cards with no monthly fees for about the same rates as most processors.

I actually prefer to use pp for this because I can send an invoice to the customer and they put in their card info and I don't store it or see it.

 

[axejunkie]

It's difficult to compare a high volume retail business to an individual on here selling a few items. Any smart retail operation should at least consider the cost of customers paying with credit and account for this somehow.

Additionally, in a buyers market for pool items, many buyers automatically make a lower offer than advertised, which obviously cuts into profit.

 

[GoldCrown]

Sellers should just add the 3% in before they list a price and then there is no need for a discussion.

.

Totally agree. List the price shipped and that works also.

 

[RRfireblade]

If your a business, yeah it's kind of tacky cause you already accept CCs and such.

If your a private individual....

You want convenience of payment with a click and get your stuff faster, you pay the fees...you get the protection. Why should I eat it ? Why should I take the risk of PP screwing me out of my money and/or any old scammer doing the same. Otherwise just send me PP money transfer with no fees.

Otherwise you send me a check or MO like we always did back in the old days.

 

[boradriver]

I have 2 small businesses and take credit cards at both. I eat the 2.75% they charge me for the transactions.
But when selling something privately, I at times will ask for the buyer to pay the paypal fees.
The way I see it when your a business its just the cost of doing business. When its a person to person transaction its ok to charge the fees.

 

[JB Cases]

Totally agree. List the price shipped and that works also.

I list shipping separately because if I end up negotiating with the customer ang giving a discount I can't afford to discount the shipping as well.

So for me shipping is typically $75.

If I give a guy 20% off then that $15 off the shipping charge of $75 that I have to eat.

Sometimes I do that though but it does catch up to you when the bill for shipping comes due.

 

[maha]

the cash customers pay for the credit card fees. it is built into the price and unfair to the cash customer.

 

[JAM]

I haven't used a merchant account in along time but I have shopped for them and I don't recall these tactics being discussed. As Kerry pointed out it is a very competitive business and while there are certainly some less scrupulous operators most fall within a pretty tight scope of what they do with customers.

Paypal is actually not too bad in this regard. They make it possible to accept cards with no monthly fees for about the same rates as most processors.

I actually prefer to use pp for this because I can send an invoice to the customer and they put in their card info and I don't store it or see it.

I can see how that would be beneficial.

Feds don't accept PayPal as a method of payment, so that would not work for some of my clients, unfortunately.

After reading this thread, though, I may shop around. I just paid $500 for a new terminal. I don't use the online version or gateway version for merchant accounts because the laws have made it so you have to pass a security check each year, and if you forget to update it, you pay $35 a month extra. It's a joke, these merchant account processors. They are like loan sharks, always looking for an angle to screw you.

One year, I bit the bullet and paid $800 to go with an online gateway with one of the top three banks as my merchant account provider. The salesman said there would be no monthy minimum and that my rate would be 2.75 percent for Master/Visa and 3.25 for AMEX. Again, when you dno't have a storefront or have the actual credit card in your hand for a swipe, the merchant account processors charge more. I was so busy with work, I had not had a chance to switch over yet. The first month, I was still using my old merchant account. The bill came with the new online gateway, and there was a $35 fee for the monthly minimum, even though the salesman said it wouldn't be there.

I was so pissed off, I demanded to close the account. I was just going to eat the $800 and use it as a tax writeoff. I did not want to do busines with these people. They immediatley informed me that if I closed my account early, I could be charged several thousand dollars for closing it early. I had to keep it open for 2 years, never using it, and eventually closed the account. Can somebody spell RIPOFF?

PayPal is problematic in that they will freeze your account if there's a problem sometimes -- well, at least that's what I read.

I still may check out this Intuit when time allows. You can use it with mobile phones and swipes, but I would be using it online. Read the fees. They're pretty good: INTUIT MERCHANT ACCOUNT FOR ONLINE. They give you a "FREE" mobile reader too, for those who swipe.

 

[JB Cases]

Jenny message me on facebook and we can go over some things. I think that you are probably paying far too much for what your needs are.

 

[JAM]

Jenny message me on facebook and we can go over some things. I think that you are probably paying far too much for what your needs are.

I will do so, John. Thanks!

BTW, the Feds passed a law a year or so ago that the merchant account processors have to send the IRS a Form 1099-K each year, showing how much money has been processed by them. I actually kind of like this because it helps me do my taxes.

I require a credit card to guarantee payment on all my jobs. I don't charge the credit card until the job is finished, but I need the credit card info before I begin. So far, this method has worked for me.

 

[TommyT]

What your not taking into consideration is that making a paypal payment is sometimes a choice, and the seller would also accept bank transfers or money orders.

It's tough when you are trying to sell a cue for 3k that you paid 5k for and then have to lose even more money to fees. There are some bottom feeders here who are never satisfied with the deal and are always looking for more.

 

[infest]

It just doesn't make sense to me. Add the fees into your product price. State that it's included. Then if you want to offer someone a lower price for using cash, fine do it.

Here's another way to look at it. Instead of advertising "Buyer pays X% fees." Just say "X% of my costs will be paid by the Buyer because I shouldn't have to." They are one and the same to me.

 

[StuartTKelley]

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.

I agree, it's just the cost of doing business. I'm no big seller but when I do sell on forums like this I never charge anyone for fees. I just accept that I'm doing business and can't do that for free.
I don't charge for shipping either.

 

[jhanso18]

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?

I'd say the first problem is most people on here selling don't run a business. I don't find it tacky or out of line to ask for shipping or for PP fees. If you do, then build that into your asking price. It's really not that big of deal. Everyone wants a fair shake, whether it's buying a bottle of Crown Royal, or a $1000 cue stick. Come to an agreed upon price, terms, and conditions, and complete the sale. NOT ROCKET SURGERY...

What pisses me off, is when I have something listed for $1000 O.B.O. and I come down and meet a guy at say $750, and he has the balls to expect me to pay shipping and cover PP. I already come down $250, **** off.. This has happened SEVERAL times. Give a guy a good deal to move a product and he expects you to give even more. It's why I don't try to sell much here. Everyone wants to steal online. I can get a MUCH BETTER price selling locally.

best,

Justin.