new pay pal policy
earlycalguy
Posts: 1,247 ✭✭
there is a message on ebay about a new paypal policy effective 8/19. if sellers accept paypal they have to take credit cards. you can still have a personal paypal account but if someone sends you a credit card payment you have to accept and upgrade the account to a business account. seller's will no longer be able to say 'paypal by bank transfer only, etc'. i guess ebay will be making a lot more money this way or some may stop taking paypal.
0
Comments
<<CC transactions will incur a 3% surcharge>>
Against Visa and MasterCard rules I believe. Also might be against the law in many states, if not federally, if someone wanted to force the issue.
Charging a fee is not only N O T allowed by credit card companies,
it is AGAINST the law in 50 states.
Just thought I would clarify that point!
If I attempted to charge a surcharge, I would lose both accounts and be subject to
prosecution by my state's consumer affairs dept.
Customers - buyers - pay ALL expenses in EVERY biznez transaction. From rent to
credit card vig, the customer picks up the tab when she/he buys my stuff. The "cost
of doing biznez" is paid for with the money I collect from my customers.
If credit card fees are killing a biznez, it is not a viable biznez in the first place.
Cher
sd
Credit card fees do not necessarily kill any business, but 3% of 150k is $4500, which is quite a bit of dough. Especially when you consider the business already pays a local tax, state tax, a franchise/excise tax, a corporation filing tax, employee SS tax, etc. etc.
We went over 15 years and never set up a credit card account in the store because of just the above reasons. Now, with debit cards being so popular, a lot of people, including our main customers (non-profit orgs) carry them and we have been forced to accept them, but have had to either increase the cost on some items, which would hurt the customers that dont use them, or have the ones that do use them somehow incur the costs. By giving the discounts for paying cash (ala many gas stations), we are not penalizing those who do not use them. Either way, we make the same amount, but at least we do not lose money.
I think in the long run if people are forced to accept credit cards via paypal, you will either see an increase in the S&H fees per transaction or a flat non acceptance of paypal, which would hurt many since that is the only way many buyers have recourse against the seller
The major credit card companies all have a "no surcharge" policy in effect. This includes Visa, Mastercard and Amex. However, many of your smaller credit card companies as well as some of your companies that issue thier own (ie. Sears, JC Penney, etc.) may or may not have those surcharge policies in effect. In addition, none of the above listed companies have a policy prohibiting a cash discount when processing a sale.
As for the discussion on whether or not surcharges are illegal, that has been misrepresented as well. In 1984 the federal Truth In Lending Act expired which included a ban on all CC surcharges. In response to this, some states set up their own version of the law, but many states did not. The states where the CC surcharge ban is still in effect are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. The other states allow a surcharge where those companies do not, by policy, disallow it.
Below is one of the websites where this info was obtained. Although the info has been repeated on many sites, this one seemed to have the most easy to read info.
http://www.mysmallbizportal.com/fso/LE/06_le_ic/fg/fg-merchants.html
You say $4500 is a lot on $150k in sales...over the course of a year, thats $400 a month? On sales you might not have gotten in the first place?
And the days of gas stations offering cash discounts are gone.
<< <i>
You say $4500 is a lot on $150k in sales...over the course of a year, thats $400 a month? On sales you might not have gotten in the first place?
And the days of gas stations offering cash discounts are gone. >>
Yes, $400 a month in profit is a lot and in 99.9% of the cases, I would have gotten the business in any case, as our product is as much as 100% less for the same item in any business within a 100 mile radius. As for the gas stations, that was an example of the cash discounts, although I do know of at least one mom/pop that still does that about 3 miles from my house
<< <i>
<< <i>
You say $4500 is a lot on $150k in sales...over the course of a year, thats $400 a month? On sales you might not have gotten in the first place?
And the days of gas stations offering cash discounts are gone. >>
Yes, $400 a month in profit is a lot and in 99.9% of the cases, I would have gotten the business in any case, as our product is as much as 100% less for the same item in any business within a 100 mile radius. As for the gas stations, that was an example of the cash discounts, although I do know of at least one mom/pop that still does that about 3 miles from my house >>
If it's 100% less, then raise the prices 10% across the board...you'll still be 90% lower, and tripling back your costs in credit card costs.
Any business who isn't taking credit cards really is hurting themselves in today's economy. The days are long gone where you can choose not accept credit cards.
For a merchant, it's easy to jack up all your prices 5% and offer a cash discount - the liquor store across from GT does this
The bottom line is that credit card companies are in bed with law-makers, why else would the "surcharge" be illegal. They want people to use credit cards. The average person's savings to earnings ratio is piss poor and it's gonna get worse...
Brian
However, in regards to the original topic, it will be interesting to see how this plays out, especially with those who accept paypal but not with CC. I think you may find that a lot more people will stop taking it as payment and may turn to some other avenues.
Ebay claims they are doing it to make things easier, because some sellers and bidders didn't understand. BS, they are doing it so they can make more money than they already are making. As soon as you upgrade you account, any purchases paid for via paypal will incure a fee charge, compared to no charge for transfers on a personal account.
I like that, first time I heard it/
:0
<< <i> So if the item sells for a few dollars less because I don't accept paypal, who cares, because it is less of a hassle for the seller not having to deal with potential charge backs and the additional fees from Feebay.
>>
Speaking as one who buys and sells, 3% is more than worth the security of having any potential problems handled by a third party should a problem arise.
MO/CC are such a pain, and it's not like those are free, either. Most places charge an amount to do that as well.
So what's the difference?
Smart move, eBay, smart move:
Google reportedly plans to start payment service to rival PayPal
Says ebay is one of google's biggest advertisers...am sure that relationship will disappear if and when this happens.
Even if it does, am sure ebay would make life very difficult to take google payments, probably wouldn't even offer them, or do so at a higher percentage.
I agree. Google stock is at BUBBLE levels. The only thing that is keeping it at these levels are the shorts who continually get caught in a Short Squeeze but eventually Google stock will dive like eBay did recently.
>>
Speaking as one who buys and sells, 3% is more than worth the security of having any potential problems handled by a third party should a problem arise.
MO/CC are such a pain, and it's not like those are free, either. Most places charge an amount to do that as well.
So what's the difference? >>
If I go to the bank and get a MO it doesn't cost me a penny.
When dealing with paypal there are all sorts of problems that can arise, especially if they decide to freeze your account for an unknown reason.
Sure, a Money Order may take a couple more days to arrive, but still you don't have to worry about a charge back, because you insured the package and didn't have enough proof of tracking. Now unless they require all buyers to become verified members, sellers will have people charging via paypal and having the seller ship to an unverified address.
According to the new rule the seller can't deny the payment either, otherwise it will go against them for not selling to the buyer.
Just another new problem ebay has created.
I will accept a check from anyone. They now clear within 48 hours, and I check to make sure they have through my online banking before sending the item. I know checks can bounce, but I have never had one bounce on me in over six years on the bay.
Just lucky, I guess.
<< <i>Smart move, eBay, smart move:
Google reportedly plans to start payment service to rival PayPal >>
Old news, Gemmy. Google has come out an publicly denied this since those stories first broke.
<< <i> If the masses stand up to this BS >>
good luck with that!
For those of you who say you will not accept Paypal any longer, I think you will start realizing lower prices on your auctions. That being said you should do the math and see if accepting Paypal and paying the fee would have gotten you more than not.
I for one, DO NOT BID unless paypal is accepted. Money orders are a pain in the ass! I hate paying with them and I hate getting paid with them.
Whoever said their bank does not charge them for money orders is definitely in the minority. Every bank that I have gotten one from has charged and I know the PO charges for their money orders.
I can't believe that it took Paypal this long to do this. I understand that they wanted people to try their service for free and once they realized they liked it, they were hoping they would accept CC's and then they would get paid.
Guys, nothing in life is free. Paypal provides a service and it offers convienience as well. I will not revolt. I do not think the masses will revolt. Your only hope should be that Google starts to offer a competitive service and that may start to lower the fees across the board.
JMO so TIFWIW.
My Auctions
The problem I have with ebay is that they are charging you for using their service and then again charging you to pay for an item you got using their service. I can understand charging you to use Paypal if you were sending money for a non-ebay item, but they shouldnt charge you for it if you bought it from ebay. They are getting you coming AND going.
I do agree that auctions that do not accept paypal are getting less for their money, but if you are a buyer and willing to put a little extra effort, sometimes you can get a good deal. I recently bought a lot of coins which had been selling in the $70-$80 range and the seller did not accept paypal...I got them for $43.
I think its only a matter of time before someone starts up a competitive site for everything, but I dont think you will see a massive ebay revolt until then
If a buyer wants an item bad enough, they will pay whatever method is accepted. Those that don't bid don't want the item bad enough or actually don't have the money to pay for the item, because they would charge it.
I'm sure people that sell a lot on ebay will start taking credit cards, but the ones like me that only sell occasionally won't bother.
I personally hate getting paid via paypal, because then I have to go and use my own funds to ship the item due to not having the cash on hand like with a money order.
BTW, there is absolutely no way of knowing if an auction that accepts credit cards got more because of that fact. Auctions vary in selling prices no matter what.
Joe Blow may get $50 for a card and accept Credit Cards
John Doe may get $40 for the same card and not accept CC
and then Sally gets $38 for the same card and accepts CC.
There are more factors than just who accepts paypal when it comes to final values. Feedback, Shipping, Listing, etc are all major factors.
I've actually gotten more for items when I've only accepted Money Orders than people selling the same item who accept all forms of payment. So the theory of not accepting CC and that non paypal sellers will make less is flawed.
<< <i>That being said you should do the math and see if accepting Paypal and paying the fee would have gotten you more than not. >>
Zef, the majority of people who boycott paypal do so not to get rich, and they probably do get less money for their items. However, paypal has screwed people in the past for hundreds or even thousands of dollars. Often people would keep balances in their account (paypal even has a debit card to lure you to keep a balance), and they'd freeze their account and seize their money for no good reason. And for seller's who don't take it, DSL seems to be doing fine. That said, I take paypal, but I just like playing devil's advocate.
Brian
<< <i>However, paypal has screwed people in the past for hundreds or even thousands of dollars. Often people would keep balances in their account (paypal even has a debit card to lure you to keep a balance), and they'd freeze their account and seize their money for no good reason. And for seller's who don't take it, DSL seems to be doing fine. That said, I take paypal, but I just like playing devil's advocate.
Brian >>
Speaking from a buyer's standpoint, I'd much rather order from 4SC who takes paypal, than DSL who doesn't.
As far as paypal screwing people over, can you think of a bank or credit card company that hasn't? Not that it makes it right, or ok, but these things happen.
Actually you can look what Tom, Dick and Harry sold theirs for and take the number oif bids into account. It is not scientific method, nor a perfect method, however for a realistic person they could find out the truths I spoke of and see the differences in Paypal vs. non Paypal.
When I sell I don't care if the person who buys my item wants it a little or a lot...that never crosses my mind. What does though is trying to get the most bidders to bid.
So...If some guy REALLY wants an item and will pay whatever for it, I would think by getting more people who may not want it quite as bad but will still bid for the convenience sake, thus driving the price up that you get from the guy who REALLY wants it. If this sounds dumb its because the arguement is dumb, the point initially being made is not valid nor accurate.
<< <i>Why should I get charged for non auction transactions???? So when you sell a card on this board or another board and get paid via paypal, ebay is getting a cut due to this new rule. >>
Like I said before, because you are using a service. They eventually want you to pay for using their service. And whether its through eBay or not you are still using Paypal and they want to get paid. eBay is getting a cut because they own Paypal or are Paypal, its the same organization.
I think the reason that you get charged on both is because they used to be seperate companies and after eBay bought Paypal they didn't think that changing the fees for either and thereby earning less money was a good business plan. They realized that people already knew and accepted the fees and would be alright paying them twice. Morally right? No. Good business sense by a billion dollar organiztion? Uh...Yeah.
NBAfan, I bet you were one of those people who thought that new invention of Automated Teller Machines would never catch on.
Brian...
I can appreciate the devil's advocate and I don't completely disagree with you. Paypal is not perfect(far from it) but it is the most convenient method, and in today's world of things happening quickly is a top priority of most.
For the record, I think eBay and Paypal gouge on their cuts and I hate paying them. That being said I am only disagreeing because it makes good business sense to accept Paypal. Yes DSL is doing fine, but they probably would be making more money if they took Paypal.
There are 2 Laundramats near my place: One accepts credit cards to purchase a in store debit card to use on the machine and the other only accepts quarters. Which one do you think makes more money even though the one who accepts CC's has to pay for those transactions?
My Auctions
Are you telling me that you would rather have 100 people bid your item up to $300 instead of having 5 people fight over it and bid it up to $500?
Just ask people that collect vintage cards, that are trying to put a set together.
Also, some sellers start their auctions out higher so the amount of bids is lower, but final value may end up being higher.
So basically here is a situation
Tom has 0 feedback no pictureand accepts credit cards
Dick has 3 feedback no picture and accepts credit cards
Harry has 4329 feedback with no negatives, a picture, and doesn't accept credit cards
All are selling the exact same item.
Tom and Dick are going to make more than Harry just because they accept Credit Cards?
Like I said there are more reasons for final values than who does and doesn't accept paypal and credit cards.
As for the fee portion. I would never have signed up if I had to pay a fee for transactions and would never use it if the started. They like to jerk you around at paypal. I had started a former account and lost all my information. I didn't want to become fully verified at the time and requested that the account just be closed. I recently tried to become verified, but for some reason they never closed my account, because my Checking account is said to still be tied to the other account and they won't fix the problem. I tried calling them, but after waiting like 10 minutes on a long distance call, it wasn't worth the hassle.
Ahhh some have the money they just prefer to charge it for the added leverage they get if the deal goes south. I use my american express card via paypal all the time unless I am comfortable with a seller then i simply transfer the funds.
the use of a credit card in and of it self does not mean one has no ready cash. on the contrary it could very well mean what i have explained above.
sd
People are not going to pass up something they need or want just for the fact they can't pay by credit card if they have the money to pay for the item.
The thing with ebay is not all sellers are trying to get every last penny they can get, thus BIN auctions. Why put a BIN on it if there is a chance it could go for even more?
The whole issue is flawed.
Major sellers will keep paypal while occasional sellers won't bother, which will probably end up being the bottom line.
I usually already lose enough money on a box break to have to lose even more by accepting additional fees for accepting credit cards. It also seems like it is around 50% of the people use paypal to pay for an auction and 50% send another form of payment, at least that is what has been happening to a friend that sells and accepts credit cards.
They will if they DO NOT feel comfortable with the seller.
SD
NBAfan...Like you said you are an occasional seller. 90% of my sales the buyer uses Paypal.
This is a round and round arguement and essentially it doesn't matter. You are going to do what you want to do, I am going to do what I want, and so will everyone else.
All I am saying is I understand why Paypal/eBay would do this and I think accepting Paypal gets sellers more money than they lose in payinf the Paypal fees.
Agree to disagree
My Auctions
<< <i>People are not going to pass up something they need or want just for the fact they can't pay by credit card if they have the money to pay for the item.
They will if they DO NOT feel comfortable with the seller.
SD >>
I agree Steve
For me, paypal and my credit card offers me some comfort - just taking money and sending it to a stranger in the mail is kind of scary - unless we are talking about a few bucks?
mike
just a cost of doin business.
instead of charging 2.00 for shipping many will now just charge 3. heck many of the big guys charge 5 and up.
sd