PayPal Surcharge


I have noticed alot of people add a (3% or so) PayPal fee to their items and I wonder if everyone is aware, that is against the user agreement. It seems that PayPal looks at sellers as "merchants". This is cut from the Paypal website:

-No Surcharges. Under Visa, MasterCard, Discover and American Express regulations and the laws of several states, including California, merchants may not charge a fee to the buyer for accepting credit card payments (often called a "surcharge"). You agree that you will not impose a surcharge or any other fee for accepting PayPal as payment. This restriction does not prevent you from imposing a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge (in other words, the handling fee for transactions paid through PayPal may not be higher than the handling fee for transactions paid through other payment methods). Nor does this restriction apply to Pound-denominated transactions by sellers residing in the United Kingdom listing items for sale on a UK-based website.
dill

Showing 4 responses by pmkalby

PayPal has no jurisdiction here. Who cares if they say you can't add a surcharge? They're not monitoring emails about classified ads- are they? Sellers can say whatever they want, and in Audiogon's classified ad dominated sales culture, we can all agree on whatever terms we want with buyers and sellers. PayPal trying to dictate this to us is ludicrous.

As for sellers being nickel-and-dimers if they say they want the buyer to pay, that's a matter of personal opinion. We're all (well mostly) adults, do the math and decide if it's still worth it to you to sell or buy the item if you have to eat the surcharge.

Personally, I see idiots emailing sellers to ask "how much to ship to me?" or "will you include shipping in the price" !without! including their zip code in the message or having the brain cells to click the link to shipping costs so thoughtfully included by Audiogon as a much bigger annoyance.
Plenty of stores do in effect add a surcharge by saying, "well, I can give you this (hot deal) if you pay cash, but otherwise it will be (hot deal + 2%)". Regardless of what some unenforceable contract says about it, it happens and will continue to happen in the real world and on the internet.
MEZMO: What law is this you say it is against to charge 3%-- would you cite a reference of some sort so we can go look at it, please? I've never heard of such a thing and I'm pretty curious about it now. Is it part of the federal code dealing with banking or ???

CADMANIAC: I'm having a hard time hearing you, since you are way up there on that high horse. Paypal said in the beginning, when I originally agreed to their TOS, that they'd never charge a fee, because they made their money on interest on your funds while they held them preparing for transfers. Any of you other 'goners remember the explanation they had up on their site about how Paypal would work and not cost us $$? They lied, then they changed the rules, and the bottom line is, if a deal does or does not include the 3%, that's the business of exactly 2 people, the buyer and the seller, your self-righteous platitudes notwithstanding. If there is some obscure law about a surcharge being illegal, I'd love to see it for the curiousity value, but they can just try to get me.
Wheee! Thanks Mezmo. From now on I will be offering 3% off for "cash" in case the buyer is in a state that prohibits surcharges. FYI, I can't find any similar language in the Oregon revised statutes, but I did find this table, a compendium of state comptrollers and how they deal with credit card fees on licensing apps:

http://www.nasact.org/techupdates/downloads/surveys/06_02-Ecommerce/Table13.pdf

A search for "credit card surcharge" turns up multiple instances of gripes about all types of surcharges, companies charging customers to use credit cards, etc.-- Seems like this is pretty state-dependent and not very well controlled.

A list of states that have codes against CC surcharges: California
Colorado
Connecticut
Florida
Kansas
Maine
Massachusetts
New York
Oklahoma
Texas.

That's per: http://www.gofso.com/Premium/LE/06_le_ic/fg/fg-merchants.html#C

Apparently the truth in lending act that expired in 1984 precluded credit card surcharges, but since its expiration it's been up to the states themselves.