PayPal Surcharge

Preferences aside, PayPal runs the disclaimer because it just happens to be illegal. Whether anyone likes it or not is beside the point. Of course PayPal doesn't care one bit what people do as long as they use their services and someone pays whatever fees they, or the credit card companies, charge. They make folks agree not to pass along the fee so that they can say to any authorities who may (or may not) investigate their compliance with the law, "hey, we told them it was illegal, we told them not to do it, and they agreed -- don't look at us." This will likely serve as enough of a complication to diffuse any interest in enforcement against PayPal, and there is certainly no political will, advantage, or practical feasability in enforcing it against individual users (...yet, with more high-volume or institutional users, I guarantee this will change).

Consequently, whether or not folks insist on passing this fee along to purchasers is a question of nothing more and nothing less than their own integrity. In fairness, most individual sellers likley don't realize what is at issue. Notwithstanding, no one who insists on passing a surcharge for a service they have selected for their own convenience is someone I would elect to do business with -- and the fact that they do so illegally and in clear breach of an express covenant only drives it home further. I don't think it's worth getting particularly exercised over, just not transactions I need to be a part of. As in all things, the choice is yours.

As both a buyer and a seller, using PayPal comes at a great advantage to me. As a seller I can get paid more quickly and will attract far more buyers who may otherwise not consider an item (those who may be buying on credit). As a buyer I can pay quicker which would follow that I get my item sooner. Also I can buy something using a credit card from an individual, when I may be temporarily cash poor and otherwise miss the purchase. Bottom line is that it is an advantage to both sides so why not split the cost? Ultimately it seems like, as has been pointed out, it is really up to the individual seller since PayPal is not going after, or suspending priveliges of individuals for violations. The seller has the item and can sell it for whatever they choose, it is up to you as the buyer as to whether you are willing to pay their price. I don't really get the idea behind limiting a seller to bear the burden of the fees of accepting PayPal.

One important point which I think has not been brought up yet (sorry if I've missed it if someone has): It is not JUST the credit card companies, as has been pointed out several times here, that dictate the service charge. PayPal will also charge 3.3% to those individual sellers with a 'Preferred' seller status (meaning those individuals whose membershipe does allow them to take payments via credit card) who accept a payment from an individual with enough cash in their account. In that case presumably PayPal is profiting directly from the fee charged and NOT the credit card companies. The only transaction that I am aware of where they don't charge a fee is to a seller with a standard individual account (meaning they cannot accept credit card payments through PayPal at all), who is receiving payment from a buyer with cash in their PayPal account (they must have enough cash to cover the entire amount of the transaction). If the buyer in that case is paying using a credit card then a fee is charged.

So, althought the law they are quoting (and not enforcing) is based upon the retail practices dictated by the credit card companies themselves, they are also using the same service charges on cash transactions for the direct profit of PayPal, and dictating the same rules, in those cases, that apply to credit card transactions.

Marco

I think the charge should have no effect on the buyer...If he had to send a postal money order they charge...then you have postage... a drive to the post office...I don't mind paying 3% at all...just the convenience of paying while listning to your favorite artist is worth the extra IMHO

Anyone with a PayPal account is contractually obligated to NOT charge extra. This is part of what the user AGREED to, and to disregard it is wrong, illegal and improper. Petty self-justifications, no matter how inventive or customary they may be, do not change that fact.

Interesting thread. I've used PayPal at least 200 times as a buyer, but never as a seller. I've always sent funds via bank transfers. I was under the impression that all PayPal sellers were charged the 3% fee for all transactions! I'd be interested in knowing how much money I've thrown away on deals where I've paid a 3% PayPal "fee" when no fee was actually charged to my seller!?!? (i.e., bank transfers made to individual sellers who are not set up to accept credit card payments).