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Thread: Buying & Selling Online using Paypal

  1. #1

    Default Buying & Selling Online using Paypal

    This is the top article today on Digg.com...about how Paypal decided to add fees to personal transactions without letting anyone know about it.

    The short article is a little confusing actually in terms of fee discussions, but one thing is clear: Paypal is dipping a little further into everyone's pockets these days.

    The funny thing is that it's almost become standard practice for people to charge a 4% paypal fee on top of the price they're asking (in all forums, not just SZ) and I think it's laughable.
    I've reach price agreements with sellers before where you agree on a price and then they send an invoice and add 4% to the agreed price 'because of paypal fees.' And then I've agreed to not buy the item because I don't agree with that kind of business approach.

    If you're selling something, as the seller...you initiate the transaction by placing something for sell and I think any and all paypal fees should be the responsibility of the seller.
    It certainly shouldn't be added to an agreed price after the fact, especially when you haven't mentioned anything about additional paypal fees. It comes off as sketchy and like you're trying to milk an additional amount of money from a buyer after the fact.

    But I'm not writing to bitch about personal practices in classifieds selling.
    I'm wondering about this 'new' fee that didn't exist before apparently that exists now that everyone was apparently paying for before.

    Right now, it appears that the 'new' fee is .30 + 2.9% between personal accounts for 'goods' and 'services.' That's DOMESTIC transfers. Overseas transactions are subject to 3.9% + .30.

    I've been using Paypal for about 10 years now and I've still never really figured out their mysterious fee rates.
    There was a time when if you paid from a balance, there was no charge to transfer that money to another account. That was their way of encouraging people to keep the money they made in the paypal system.
    And I've heard discussion about higher rates (that 4% fee I mentioned earlier) from credit card payments but I don't believe there is any truth to the idea that you are charged more to receive payments from a credit card as opposed to a pre-existing balance or a checking account.

    One thing is for sure: It would be nice to see people migrate over to Google checkout but I'm not sure how their protection policies are.
    Safety is THE number one concern for me as both a buyer and seller in open forums like the ones we use to buy/sell clothing but you have to adhere to a pretty strict set of guidelines set by Paypal or you don't really have any protection at all.

    So the reason I bring this up in a fashion forum is because almost all of us use paypal, on SZ and off to buy clothing from various sources.
    Does anyone really understand how their fee rates are determined? Does it concern you at all as a buyer or a seller?

    Were you guys aware that there was no previous fee to send money from one personal account to another personal account if it was a 'good' or a 'service?'

    I've never found anything on Paypal about 'credit card payments' causing a 4% increase in the fee a seller pays to accept the payment. In fact, there's little discrepancy at all between where that money comes from that goes to the seller.
    Before the changes made recently, wasn't the 4% extra fee charged after the fact really just that: An additional needless charge?

    The only reason I see this as a fairly pressing issue is because most of us use paypal regularly to buy clothes but very few of us actually understand how it works, what the fees are and how those fees are applied.

    Here's the digg submission and here's the actual page.
    Quote Originally Posted by mizzar View Post
    Sorry for being kind of a dick to you.

  2. #2
    kitsch killer Faust's Avatar
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    Beardown, you might want to checkout PayPal Rant Central right here.
    Google checkout has made a grave mistake of orienting themselves at small businesses rather than individuals. I can't believe such a smart company can make such a big error. No, I am not giving my social security and proof of business to you, Google, because I am not a business, and no, I don't want to pay taxes on selling my used clothes. PayPal protects the individuals from snooping tax agencies, local, state and federal. So far I don't have a major gripe with it - it provides a service and it charges for it. Ebay is more of a culprit. It is true that Ebay + PayPal = rape, but Ebay is the bigger fish to fry here.
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  3. #3

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    if you've ever calculated for yourself (as you should have) the fees taken away from payments you received, it is correct

    i always was deducted the 2.9% or 3.9% plus 30 cents; never more. i also think it's ridiculous that quite a lot of people ask for an extra 4% from buyers

    what PayPal cheats isn't in the fees, it's in the exchange rate. it's always WAY off. if for a week or so the CDN is doing good, it doesn't really show in your PayPal balance like it should. the rate is always way off


    *** BUT on the plus side, if you're selling to someone you trust and have had transactions with before, you can send payments via the "Gift" option. zero fees for buyer and seller, but you have to send your shipping info separate (via PM or something)

  4. #4

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    thanks
    i didn't know about the gift option
    One wonders where it will end, when everything has become gay.

  5. #5

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    Faust,
    I didn't know much about the Google pay system. That does sound absurd. I guess Paypal holds people over the fire because they can. Much like every other corporation in America, they can set the rules because they have the most extended network and (I suppose) the most efficient way to send/receive money.
    And very much like Ebay, Paypal could probably lock people into a ridiculous amount of fees (10%, say) and most people would still use it because of convenience and ease.

    It's shocking to me that nobody has been able to challenge Ebay in their realm. Obviously there are a few other options for auctions but nothing that even compares in terms of users. And unfortunately, more users generally = higher bids on items of interest to the general public.

    I think if you could remove the 'dispute' side of it completely, then there would be a number of banks who could branch into direct money transfer...the fees would likely still be hefty.
    But it's the dispute part of Paypal that makes people feel safe using it and I imagine that's the most laborious part of Paypal's job because these days, it's simply a matter of data transfer.
    Quote Originally Posted by mizzar View Post
    Sorry for being kind of a dick to you.

  6. #6

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    I greatly dislike PayPal as a company because it restricts its users as if it were a legitimate financial institution when it does not have that kind of legal authority. I believe there was a $25 million lawsuit against PayPal for exactly this. Another thing that really annoys me, as Ironman said, is the exchange rate. It's worse than what you'd get from a loan shark. They have also taken forever to process my payments, once almost to the point of my losing the item. On top of that, I've dealt with some of their worst customer service representatives, ones who felt the need to remind me of the agreement I signed because I had a question about a policy.

    That being said, I have used PayPal twice before, and both times were headaches and led to me vowing not to use PayPal again. With this news of the 3.9% fee, I think I'll keep my word this time.
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  7. #7

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    Quote Originally Posted by ironman View Post
    *** BUT on the plus side, if you're selling to someone you trust and have had transactions with before, you can send payments via the "Gift" option. zero fees for buyer and seller, but you have to send your shipping info separate (via PM or something)
    The last time I used the "gift" option I still got hit with fees.
    Suede is too Gucci.

  8. #8

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    afaik the buyer needs to send payment as a personal payment and you need a personal account to avoid paypal fees.




    I have two paypal accounts, although it doesn't make a difference now that paypal has lifted the credit card transaction limit on personal accounts (and added transaction fees to non-personal transfers).

  9. #9
    kitsch killer Faust's Avatar
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    Also, I don't know if the e-check option is still available, but it is a standard $5 fee, so if you are willing to wait a few days and selling a fairly expensive item, it's totally worth it.

    Beardown, people have been clamoring for Google to step in for the longest time - and that's what Google does best, entering inefficient markets and stealing market share. I don't know why they are mishandling Google Checkout.
    Fashion is a form of ugliness so intolerable that we have to alter it every six months - Oscar Wilde

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  10. #10

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    I don't know why google checkout accounts are still only available in the UK and US.

  11. #11

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    I don't recall giving any of that information when I set up google checkout Faust. I know none of my google checkout sales were listed as sales on any tax forms I've ever seen. I'm willing to believe somehow I came in under a threshold or google fucked up, but the proof of business is news to me.

    EDIT: Weird. That looks really straightforward. I just last month got payment over google checkout. I'm probably retarded.
    Last edited by theetruscan; 08-10-2009 at 11:09 AM.
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  12. #12
    kitsch killer Faust's Avatar
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    "Business verification information requested We've sent you an email asking for additional information to facilitate a further review of your Google Checkout account. Please provide the requested information to avoid account suspension."


    We found that you're processing orders using email invoices and haven't listed a Public Business Website URL in your Google Checkout merchant account. Please complete the form below to verify your account.

    1. Collect the following documents, and write your Google Checkout Merchant ID number at the top of each document:
      • Business catalog or brochure with company name
      • Inventory receipts or supplier contact information
      • Identification card or proof of address
      • Copy of professional license

    2. Scan or copy each document, making sure the copies are clear and legible.
    3. Submit the documents to Google within five business days using the form below. Alternatively, you may fax the information to 650 469 0611.

    If you have a website that displays the products or services you sell, but haven't included the URL in your account, please add your Public Business Website URL immediately.
    If you do not have a website of your own and sell on other websites, you may specify the URL showing the products on these websites, as the Public Business URL in your account. Once your website URL has been added, you're not required to submit additional documentation.
    Failure to add a Public Business Website URL or submit the requested business documentation will result in your Google Checkout account being suspended.
    Fashion is a form of ugliness so intolerable that we have to alter it every six months - Oscar Wilde

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  13. #13

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    Quote Originally Posted by the breaks View Post
    The last time I used the "gift" option I still got hit with fees.
    i didn't, and i've used it twice so far. one to send, one to receive

    big thanks DJI for posting screenshots on how to get to the Gift option!

    and yes Faust the e-cheque option is still available, the person who bought my $430 Lanvin silk padded pants used e-cheque. $5 fee was very good in that situation :)

  14. #14

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    personal paypal accounts also have a $500 withdrawal limit each month

    i've never heard about the gift option, thanks for that I'll have to try that next time

  15. #15

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    no problem guys! :)

    NOTE: i would only recommend it with people you trust, know somewhat personally, or have dealt with previously

    as the payment is a gift and not a transaction, you might not have protection (although i don't know if one can even open a dispute for it lol)

  16. #16

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    Quote Originally Posted by ardeetee View Post
    personal paypal accounts also have a $500 withdrawal limit each month

    i've never heard about the gift option, thanks for that I'll have to try that next time
    there's no withdrawal limit on Australian accounts, however before the policy change personal accounts were limited to 10 credit card transactions per year.

  17. #17

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    Quote Originally Posted by the breaks View Post
    The last time I used the "gift" option I still got hit with fees.
    Yeah, this happened to my sister when she tried to send me money a few weeks ago. What's really infuriating is that Paypal didn't provide any explanation as to why the fee was applied, so it might as well have been completely arbitrary...although I'm guessing that it must have been a "cross-border fee," which I didn't realize existed until I came across this exquisitely informative mention in the Fees section: "A cross-border fee of 0.5% may apply."


  18. #18
    kitsch killer Faust's Avatar
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    you have a sister?
    Fashion is a form of ugliness so intolerable that we have to alter it every six months - Oscar Wilde

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  19. #19

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    Another interesting fold is that Paypal can apparently lock your account for no reason and freeze the money for up to 90 days.
    It apparently happens quite frequently and they don't have have to give a legitimate reason to do so.
    I've been told many times never to keep more than $1,000 in the account at one time.

    This is one example but if you google it, it's quite common.

    Reasons appear to be: too much money in an account, too much activity, too little activity, to many transfers to the same person, too many received payments from a single source, sketchy credit reporting from credit agencies, etc, etc.

    There are some guidelines here to help avoid it but I'm not sure if there really is a way to avoid it or to combat it if it happens.

    I've never had it happen to me but I don't deal in large transfers. Apparently if you sell something for over 2 grand and receive a payment, it flags your account for review. Something to look into and keep in mind.
    Quote Originally Posted by mizzar View Post
    Sorry for being kind of a dick to you.

  20. #20

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    Quote Originally Posted by Faust View Post
    you have a sister?
    Well, I'm not a liar.


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