Is it worth it to use PAYPAL and accept credit cards?
tsacch
Posts: 2,929 ✭✭✭
I have a regular paypal account and was thinking of upgrading to a premium account, which would allow me to accept credit card payments for coins that I sell.
Is it worth it?
What are the risks involved?
Horror stories?
Is it worth it?
What are the risks involved?
Horror stories?
Family, kids, coins, sports (playing not watching), jet skiing, wakeboarding, Big Air....no one ever got hurt in the air....its the sudden stop that hurts. I hate Hurricane Sandy. I hate FEMA and i hate the blasted insurance companies.
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Comments
I'd recommend that you make it a stated policy to reserve the right to refuse PayPal payments from non-confirmed addresses. You may still choose to honor them if you'd like (for small items and/or exceptional feedback or known, trusted bidders), but put that in writing nonetheless. Otherwise you're vulnerable to the chargeback game.
[Edited with additional thoughts: I've completed eight eBay sales in the last month. Of those eight buyers, seven used PayPal. I have to think that at least *some* of those high bids don't come if I only took checks and money orders.]
<< <i>And charge backs are when its a stolen card? >>
Or when some slimeball buyer wants to rip you off by filing a bogus chargeback.
Russ, NCNE
<< <i>Ok, so 2 yes, one apparent no.............. >>
I wasn't saying no, I was just pointing out that it doesn't have to be a stolen card to get nailed with a chargeback. The system is setup heavily in favor of the cardholder. On a chargeback it's grab the money now, ask questions later. If you, as the merchant, can't prove the buyer received the item you're screwed even if it was a legitimate sale.
Russ, NCNE
<< <i>so protect thyself with signature of buyer getting delivery confirmation. >>
Well, you need to be able to provide proof of delivery in order to have PayPal's Seller Protection kick in. That and you have to ship to a confirmed address.
As far as chargebacks, only ship to confirmed addresses (unless you really know who's paying you), and always use delivery confirmation. Do that, and your chances of having a successful chargeback to your account are less than one in a thousand.
Probably 80-90% of what I sell on ebay is paid via PP. The usually quick-pay makes up for the fee they charge.....I'd rather have 98% of my money today than wait a week or two for a personnal check in the mail + another 5 days to clear. But, as noted above, make 100% sure everything you ship is insured thru the PO - as if there's a claim, you always have the PO. You can also claim thru PP but then again, you have to have a verified address (and I'd say about 2/3 of the buyers I see have a verified address) or else you lose that option. But remember, when you receive a payment from a buyer that does not have a verified account, you can see how long they have been a PP member and how many other unique sellers they've paid - a form of feedback rating system. You can then decide whether to accept or deny that payment. If you are also concerned about this, you can list in your actions that you only accept PP with a confirmed address - and I believe you can set up PP to only accept confirmed address - it will not allow unconfirmed address payments (I've had this happen to me as I use an unconfirmed address myself).
My 2 cents.....
If I had it my way, stupidity would be painful!
thanks,
tom
Don't ship to any address other than the listed "confirmed" address. No matter what whacked out buyer sob story you get fed, and you can adjust your payment acceptance preferences to ONLY accept Paypal payments from users with confirmed addresses. With that said, I do make exceptions to this rule with established customers that would rather have an item shipped to a PO box etc.
Ship either blue label insurance ($50+), or the green tickets WITH DELIVERY CONFIRMATION (-$50). That way you have proof of mailing. For items under $50, insurance with del. confirmation costs me $2.50ish per package, and then the cost of my mailers/packaging. I charge $3 so my costs are covered. It's amazing at how I haven't had one package "lost" in 2 years on these under $50 insured items since I started using del. confirmation with the packaging. This will give you the "proof of mailing" that you need if a problem arises.
LSCC#1864
Ebay Stuff
My Ebay Sales
Paypal is great, no doubt about it. I use it and have for many years. I was one of their early customers. K6AZ could not be more wrong when he wrote "As far as chargebacks, only ship to confirmed addresses (unless you really know who's paying you)(BONG STRIKE 2, this is not always true, see below), and always use delivery confirmation (BONG K6AZ WRONG, USE SIGNATURE CONFIRMATION). Do that, and your chances of having a successful chargeback to your account are less than one in a thousand." BONG, WRONG , STRIKE 3. In fact the odds of fending off most chargebacks are very low . Here is why. Paypal is at the mercy of the bank card issuer whose customer is the buyer who chargedbacked the items. Here is the scenario.
1. You sell to a customer and follow all the rules
2. they use paypal and fund with a credit card
3. they get the items and claim they are not right
4. Paypal dispute program will protect the seller if he followed the rules BUT....here is where Eric is wrong
5. Even though Paypal may toss out the complaint the customer asks his cc company to reverse.
6. To do this they need proof that they sent it back to the seller
7. Seller could refuse to receive it but then a whole can of worms is opened. More in a moment.
8. Seller is almost forced to take item back based on the can of worms I will tell you about.
9. Seller signs fro return
10. Buyer fowards proof to his cc company
11. Paypal gets notified of pending reversal
12. Opens complaint (even if a previous one has been closed and not allowed to reopen, they still will)
13. Your defense could be a perfect as could be, you can write and write not to have the full amount refunded but what you are doing is asking Paypal to defend you and spend time fighting the big banks of this country. Not what they are very motivated to do. 99.9% of the time you will loose and the reversal will go thru in full with no deductions for anything.
14. Now here is the Bonus round. ALL THE BUYER NEEDS IS THE SIGNED PROOF THAT YOU RECEIVED A PACKAGE. I say a package b/c once you sign for the box you own it NO MATTER WHAT IS IN IT OR NOT. In other words the buyer could send you a different coin, no coin or whatever and try proving it. You could have the POSTMASTER General standing there with a Notary and a video and Paypal will still be the one who has to defend you to the big credit card companies. If you were there with them maybe one could motivate the outcome but think about it. PAYPAL's main interest in the entire process is to reduce risk and exposure not neccesarily to do what is right especially if its not cost effective . Becasue right takes time to prove and Paypal does not want to create friction in the financial community it is part of. Its much easier to let the little guy take it in the shorts.
Now back to that can of worms. Well from what I have read the buyer has these choices if the seller refuses to sign for the item. To send it to Paypal or I have heard of once that it was sent back to their credit card company. Long story short it is very possible that the seller could get chargedback and not get the goods back to boot. This is not just a possibility it has happened many times.
The system is totally behind the buyer if he uses a credit card. Paypal is big but they still are just the middleman and are not a Bank. If they loose the support of the banks then there is a problem. And of course the banks font want to loose the buyer as a customer so guess who is sitting there with the short straw guys? The seller. These are the facts no matter what one wants to believe about the way it should be. I have had first hand experience in this matter and have researched it extensively.
To show you a chargeback that was denied.
1. Seller ships to customer who is an overseas customer with an unconfirmed address. But gets Signature Confirmation. Buyer does not ask or buy insurance
2. Buyer gets package which he paid using a credit card thru Paypal
3. He files claim with Paypal and CC company saying that the package was ripped open and the coin was gone.
4. Seller simply tells Paypal that he sent it and has proof of sig.
5. Paypal will deny chargeback even though buyer is thinking maybe seller never put coin in the package. Paypal will believe seller and buyer should have gotten insurance.
That's all folks
<< <i>PayPal taps you a little harder for a credit card transaction. Some buyers list a small premium charge with thier auctions if paying with a credit card. I guess the extra PayPal charges is to offset possible charge backs !!! >>
This is a violation of both eBay's and PayPal's terms of service. If you are reported for doing this, you'll get a warning. If you get a second verified complaint, PayPal will shut down your account.
Watch out for money orders, there are a lot of counterfeits floating around. Had a friend that got arrested for passing a counterfeit money order when they took a eBay payment to the bank, they where let go when they proved the money order was mailed to them for an auction payment. If you accept money orders your safest to deposit them through an ATM, that way you are notified if it's a fake and not arrested.
"This is a violation of both eBay's and PayPal's terms of service. If you are reported for doing this, you'll get a warning. If you get a second verified complaint, PayPal will shut down your account. "
Hey K6AZ thanks for the heads up. I didn't know that was a violation, if I see an auction with a premium charged for charge cards in the future I'll report it. Only seen it a few time and it has been awhile since I saw one.
<< <i>Yes, echecks are a pain in the back side. I also accept credit cards on my paypal account. So I would say a big yes too >>
Why are echecks a pain? They take a couple extra days to clear but are a flat $5 fee. On a $1500 item thats a big savings to the seller.
<< PayPal taps you a little harder for a credit card transaction. Some buyers list a small premium charge with thier auctions if paying with a credit card. I guess the extra PayPal charges is to offset possible charge backs !!! >>
When you have a premier account PreyPal taps you a little harder for ALL transactions not just the credit card ones.
<< <i>Put me down as a "Yes". In my opinion, the additional money received by expanding your payment options more than compensates for the additional fees. >>
ditto
I know its not that common, like you I have done thousands of Paypal transactions and had 4 chargebacks three of which I lost. I shouldn't say lost since I agreed with 2 of them but the one that stuck in my craw was when the buyer returned the lot short and with substitutions. Now I photograph every item in a bulk lot in detail as a record. It is a real time consuming issue. But Paypal is awesome I live by it and even though the rates are being raised on me and just about everyone else in 24 hours I still believe it makes for good customer service and enable a seller to inventory more times per month due to the lower time it takes to collect A/R.
My point of that post was to simply warn folks that there is risk is someone is out to rip one off. But you know its EBAY not SAFEWAY and those who want the Auction world to be risk free and safe as a Brick and Mortar retailer then I ask why? The whole idea is to get a deal based on your knowledge, luck and effort. Take the risk out of the formula and then the quirks which make it a place where deals can be found and money made. I am not suggesting that outright fraud be allowed but the goal of making is as risk free as ever will also reduce the upside gains for those who have the ability. The amazing blame people put on the seller, Paypal, Ebay, the local coins store dealer, etc, etc is simply amazing to me. If people don't have a clue then they will when they are ready or maybe not. That is the way it works, some win some lose. The field is not even for many reasons and it shouldn't be. What is ironic is that at the first glint of a collector possibly getting a real deal either on an auction, flea market or coin store then all is fair but soon as it goes the other way then it is time to play the blame game. You can't have your wins and great finds without suffering some loses and setbacks. So, why so much of the blame and not just deal with it. There are all sorts of rip offs all around us but we learn not to buy the junk, we dont try to punish the seller unless he is actually breaking the laws that are enforced. The govt and other institutions can be there to save the ding a ling who does not use his head. Buy raw = RISK, buy uninsured=risk, buy from a guy with lowsey feedback=risk, but the winner will decide how much risk is acceptable and at what price the risk demands. If the bidder thinks that there is a way to benefit then he bids appropriatly. But the way people blame the sellers is sickening. And the whinning and bellyacheing is childish. Problem is too many coin buyers buy on emotion and then complain after. It is just that simple. Any other reaction to these issues is uncalled for unless you do it for a living like Ralph Nadar or what was that show, oh yeah FIGHT BACK, remember that.
"<< PayPal taps you a little harder for a credit card transaction. Some buyers list a small premium charge with thier auctions if paying with a credit card. I guess the extra PayPal charges is to offset possible charge backs !!! >>"
"This is a violation of both eBay's and PayPal's terms of service. If you are reported for doing this, you'll get a warning. If you get a second verified complaint, PayPal will shut down your account. "
More importantly it's against the law in California (and other states)
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<< <i>More importantly it's against the law in California (and other states) >>
Does the law apply to private transactions between individuals too?
I can definitely see that sellers accepting credit card payment would tend to increase bid activity on offered items resulting in higher ending amounts for items won by bidders
Great spirits have always encountered violent opposition from mediocre minds.-Albert Einstein
I assume the $5 fee applies to merchant accounts. I have a personal account and have accepted many echecks without paying a fee.
The credit card feature is good for larger ticket items. I believe the fees are offset by buyers bidding higher because they don't have to have the cash available to pay for the item at that time.
I liked the way Billpoint handled it. On small transactions the flat fee was waived and only the percentage was charged. My memory may be failing me here
Anyway, I still don't accept credit cards from PayPal but for the most part my auctions are of relatively small dollar values and I don't go over the monthly PayPal limit. (wouldn't want to unlevel the playing field
Joe.
From the buyers side: A couple of months ago, I used BIN on a number of silver proof state quarters from a powerseller (getitfrom) who had a 100% rating with over 1200 feedbacks. After about a month without the shipment, the seller started telling lies (computer fried, house burned, dog ate homework, etc). Ebay was very protective of their precious "powerseller" and although negative feedbacks were starting to pile up, ebay would not inactivate his account! Ebay allowed him to continue on selling! Anyway, I sent one email to paypal and I had my money back in three days.
I like paypal both as a buyer and seller.
BTW...ebay did finally inactivate that sellers account.
<< <i>I assume the $5 fee applies to merchant accounts. >>
And to premier accounts but not to personal accounts.
<< <i><< More importantly it's against the law in California (and other states) >>
Does the law apply to private transactions between individuals too? >>
As long as there is a credit card involved, yes. If the transaction is from balance or checking account, state laws don't prohibit charging an extra fee. However, both PayPal's and eBay's TOS do.
<< <i>my guess is that few ebayer sellers are aware of just how much power the buyer has in credit card transactions. >>
Your guess would be correct - most are completely clueless. The members of this board tend to be the exceptions when it comes to sellers on eBay.
Russ, NCNE
<< <i>So if smoeone wants to buy smoething from my listing on the BS&T board and use PayPal with a CC I can't legally charge them extra for that? >>
That is correct. Besides state laws, Visa and Mastercard also prohibit the practice. Of course, the purchaser would have to report it to their CC issuer and it is highly unlikely said issuer would do anything about it since you don't technically have a merchant account - a direct one, anyway. Besides, it's pretty much impossible even the get them to do anything about real internet fraud, since they aren't on the hook.
Russ, NCNE
Joe.
LSCC#1864
Ebay Stuff
I can't see any CC company get excited over a few bux in fees.
<< <i>I can't see any CC company get excited over a few bux in fees. >>
They wouldn't. They don't even give a damn about internet fraud. I used to report all the attempts I get through my business and they never lifted a finger to go after the slimeballs. Since the merchant is the one on the hook, they flat don't care. Try fraud at a physical location where the issuer is on the hook, though, and their response is entirely different.
Russ, NCNE
Which is yet another reason why I won't upgrade to accept them. The CC companies are sposed to be in the money lending business NOT the dispute resolution business.