Paypal Payment Basics 101

I'm posting this so people may have a clear understanding of how Paypal works (according to the Paypal Rep i spent an hour with on the phone just now)...

If my understanding of how the transaction/payment/fee process is incorrect would someone kindly add comments to clarify.

I see posts on CPF all the time that have a general disclaimer attached like so:

"I accept Paypal but no credit cards unless you pay the additional fees."


If you have a Premier Paypal account it doesn't matter what payment the sender pays, you WILL incur a transaction fee because you have a Premier Account.

BUYER ACCOUNT
If you are the "buyer" of a product and wish to use either your Personal or Premier (bank account attached) account you can pay for items using any of the 3 methods below:

1.) Balance in Paypal Account
2.) Bank Funded
3.) Credit Card

From the "buyers" perspective it does not matter where the source (1-3) of the funds originate.

SELLER ACCOUNT(s)
Personal
If you have a "Personal" account, you can only accept payment types from buyers with a Paypal Account Balance or a Bank Account source (connected to their Premier Account). You cannot accept Credit Card transactions with this type of account. No Fees Apply.

Premier
If you have a "Premier" account, you can accept payment types from buyers with a Paypal Account Balance, a Bank Account source (connected to their Premier Account), and Credit Card transactions. Fees Apply no matter what the "buyer" funding option is. All 3 payment sources will still cost you a transaction fee because you have a Premier Account.

In Conclusion
I just don't get why people always say no credit cards when it doesn't matter from the buyers point of view only the Seller depending on their account type.


:huh2:

IIRC, there was a rather long thread in C&J about this same topic; you may be able to find more details there.

Because they just don't get it?

Actually, I think some of them use multiple accounts for their businesses. personal accounts for the cash transactions, and Premier accounts for the credit card transactions. Sadly, so many of them have to flaunt their surcharges when the easy way around it would have been to do what many retail merchants did when credit card surcharges were outlawed in California, offer a cash discount. Sadly, that went away quickly as some merchants got greedy and decided to surcharge check payments as well.

iNDiGLo said:

In Conclusion
I just don't get why people always say no credit cards when it doesn't matter from the buyers point of view only the Seller depending on their account type.

Click to expand...

iNDiGLo said:

In Conclusion
I just don't get why people always say no credit cards when it doesn't matter from the buyers point of view only the Seller depending on their account type.

Click to expand...

Because it's the Seller who is saying it. If he only has a personal account, it won't accept credit card payments.

iNDiGLo said:

.....I just don't get why people always say no credit cards when it doesn't matter from the buyers point of view only the Seller depending on their account type.....

Click to expand...

Because if the seller only has a personal account, and the buyer pays with a credit card, the seller will have to refuse the payment. The sellers who list "No Credit Cards" are most likely doing so because they do not have premiere accounts and do not intend to upgrade to one.

there is more risk with accepting credit cards versus accepting cash payments.

thread is here

as a SELLER - I choose which transaction fees I wish to obsorb...
- buyer using paypal
- additional charges from a buyer using credit card through paypal
- additional cross border fee from a buyer outside of the country through paypal.
- additional Non-USD fees from a buyer outside of the country through paypal.
- additional cross border fee & credit charges from a buyer outside of the country using a credit card through paypal.
- fees for eChecks
For MY paypal (premier) account - EVERY one of these items can have transaction fee that is deducted from the funds I receive - which can add up!!!

I CHOOSE to accept payments from any source, and country.

Some people CHOOSE to limit this choice by not accepting payments from credit cards and/or out of country - thus making for a smaller buyer pool.
What's wrong with that? If a seller does not want to incur additional transaction fees, and/or cross border country fees, and additional hassles of customs paperwork and standing in post office lines - that is THEIR CHOICE

just as buyers can be picky about who they buy from - sellers can be picky about who they sell to. What's wrong with that?

greenLED said:

IIRC, there was a rather long thread in C&J about this same topic; you may be able to find more details there.

Click to expand...

lebox97 said:

thread is here

as a SELLER - I choose which transaction fees I wish to obsorb...
- buyer using paypal
- additional charges from a buyer using credit card through paypal
- additional cross border fee from a buyer outside of the country through paypal.
- additional Non-USD fees from a buyer outside of the country through paypal.
- additional cross border fee & credit charges from a buyer outside of the country using a credit card through paypal.
- fees for eChecks
For MY paypal (premier) account - EVERY one of these items can have transaction fee that is deducted from the funds I receive - which can add up!!!

I CHOOSE to accept payments from any source, and country.

Some people CHOOSE to limit this choice by not accepting payments from credit cards and/or out of country - thus making for a smaller buyer pool.
What's wrong with that? If a seller does not want to incur additional transaction fees, and/or cross border country fees, and additional hassles of customs paperwork and standing in post office lines - that is THEIR CHOICE

just as buyers can be picky about who they buy from - sellers can be picky about who they sell to. What's wrong with that?

Click to expand...

Not a dang thing. I agree with what you said 100%. I used to be a pretty heavy Ebay seller (hobby related, not for business) I stopped doing it because people can be pretty ignorant. I would clearly state up front.....Sorry, no credit cards accepted and no Non US transactions. Did not matter one iota. I was deluged with offers from persons that would beg me to reconsider. No, is a hard word for some to comprehend.

Dawg said:

Not a dang thing. I agree with what you said 100%. I used to be a pretty heavy Ebay seller (hobby related, not for business) I stopped doing it because people can be pretty ignorant. I would clearly state up front.....Sorry, no credit cards accepted and no Non US transactions. Did not matter one iota. I was deluged with offers from persons that would beg me to reconsider. No, is a hard word for some to comprehend.

Click to expand...

Sorry if this is slightly besides the point but no harm asking sometimes unless outrightly stated of course, as that's what the 'Ask seller question' function is for & often I've had sellers who were willing to accept & ship overseas so long as I paid the extra shipping costs when their auctions stated will ship to US only.

Dawg said:

Not a dang thing. I agree with what you said 100%. I used to be a pretty heavy Ebay seller (hobby related, not for business) I stopped doing it because people can be pretty ignorant. I would clearly state up front.....Sorry, no credit cards accepted and no Non US transactions. Did not matter one iota. I was deluged with offers from persons that would beg me to reconsider. No, is a hard word for some to comprehend.

Click to expand...

Same here used Ebay for hobby reasons to sell infrequently. Recently I learned that Ebay wouldn't allow me accept Paypal payments unless I had upgraded my account so credit card Paypal accounts could be used. I do less Ebay selling now I guess.

flashlight said:

Sorry if this is slightly besides the point but no harm asking sometimes unless outrightly stated of course, as that's what the 'Ask seller question' function is for & often I've had sellers who were willing to accept & ship overseas so long as I paid the extra shipping costs when their auctions stated will ship to US only.

Click to expand...

I agree... who knows, the person might need the item so badly he offers to pay more. No harm receiving some international inquiries, which shows your item does have demand overseas. You may then consider if you want to open the item to international buyers if you get lots of request.

Dawg, maybe you may not feel the 'agony' some of us have of finding a really rare item/good deal but it states only ships to US. Of course, the least we can do is to ask. If you are a collector of rare stuff (lights, knives, toys, watches etc... whatever), and there is a Ebay Japan selling all the rarest stuff you collect, but some put "only ship to Japan", would you not try for it?

How about a Katokichi light selling for $50 Buy-It-Now and you saw it first? Hahaha... (dreaming) I'm sure you'd at least ask and offer a bit more just to get it.

Indiglo, actually, the phrase isn't so much so "No credit cards unless you pay the fees". Usually sellers post 2 accounts, one for cash, one for credit cards (with 4% additional fee).

Those who put "no credit cards unless you pay the fees" probably have another Premier Account and when you contact them, they will provide the address. Otherwise, as you said, it is no point differentiating payment type if the seller's account is a Premier because ALL transactions are 'taxed' anyway.

Seller's can rephrase it as "Cash payment gets discount" (I was mentioning in another thread), but its essentially the same thing.

e.g $100 Light for sale
Paypal cash to xxx
Paypal CC (add 4% = $104) to xxy

or

$104 light for sale
Paypal cash gets discount ($100 total), to xxx
Paypal CC to xxy

gbaker said:

Same here used Ebay for hobby reasons to sell infrequently. Recently I learned that Ebay wouldn't allow me accept Paypal payments unless I had upgraded my account so credit card Paypal accounts could be used. I do less Ebay selling now I guess.

Click to expand...

When I sell on ebay I just leave Paypal off the list of payment options. I don't think it has hurt me. If you have a good feedback record and the buyer is not trying to scam you, and you're not trying to sell a zillion low-priced widgets, I really don't think it matters. I usually only sell fairly expensive items, and I'm not going to take the chance of Paypal screwing me out the money through their bogus "Buyer" protection scheme or a credit card charge back. On eBay a seller can easily get screwed through no fault of his own, and Paypal makes this easier, rather than harder, to happen.

Lightmeup said:

When I sell on ebay I just leave Paypal off the list of payment options. I don't think it has hurt me. If you have a good feedback record and the buyer is not trying to scam you, and you're not trying to sell a zillion low-priced widgets, I really don't think it matters. I usually only sell fairly expensive items, and I'm not going to take the chance of Paypal screwing me out the money through their bogus "Buyer" protection scheme or a credit card charge back. On eBay a seller can easily get screwed through no fault of his own, and Paypal makes this easier, rather than harder, to happen.

Click to expand...

So do you get paid by money order, or do your buyers pay you thru paypal anyway?

greenlight said:

So do you get paid by money order, or do your buyers pay you thru paypal anyway?

Click to expand...

No, I don't accept Paypal, too risky. I take money orders, cashiers checks, personal checks, or wire transfers. The *ONLY* foolproof method of payment is a USPS money order. With anything else, I always specify that the item will be shipped after the check clears the issuing bank, which usually takes 3 or 4 days in the US. Even cashiers checks and commercial money orders can bounce.

LEDcandle said:

Seller's can rephrase it as "Cash payment gets discount" (I was mentioning in another thread), but its essentially the same thing.

Click to expand...

I disagree.

Credit card companies' rules often requires that the advertised price be that the merchant will accept regardless of the form of payment.

Gas stations can't put "$2.799" on their big billboard then charge $2.819 when customers put it on the card.

They need to place the phrase "CASH ONLY" alnog with "$2.799" or put "$2.819" on the big board, then offer discounts to cash customers. Is there a difference in the behavior of the customer between putting the higher and the lower price on the price tag? You betcha.

Businesses prefer to put the cash price up, then put it in fine print there's surcharge for credit card payments. Not only would CC company chargeback the surcharge they impose in violation of the rule, do it enough and they will forfeit the right to accept their card at the store.

Surcharges don't really matter to educated consumers, because they can just let the merchant have his way, then call up the CC company later and get it removed.

Lightmeup said:

No, I don't accept Paypal, too risky. I take money orders, cashiers checks, personal checks, or wire transfers. The *ONLY* foolproof method of payment is a USPS money order. With anything else, I always specify that the item will be shipped after the check clears the issuing bank, which usually takes 3 or 4 days in the US. Even cashiers checks and commercial money orders can bounce.

Click to expand...

PayPal isn't risky if you trust your buyer, but if you don't trust them enough to take their PayPal payment, how can you expect them to trust you enough to send you a money order, a form of payment that is very very difficult to recover when the seller defaults on his obligations?

I would NOT send a money order to someone I do not know well enough to form a trust. If the item or a comparable deal is not available, I will insist them to ship it COD. When you ship an item COD, you specify the amount you want for the item. The Postal Service will collect the money on your half in exchange for the merchandise on the spot.

Handlo, I was thinking more of CPF selling more than generic pricing in the general retail market. "Esentially the same" as in the amount you finally pay is the same no matter how the seller phrased it. Of course, in the 'real world', other rules and psychological factors count.

But here on the forums, I guess people won't start changing their phrasing so as not to seem they are dodging the paypal fees. I guess if the item was reasonably priced in the first place, another 4% wouldn't matter too much.

Handlobraesing said:

PayPal isn't risky if you trust your buyer, but if you don't trust them enough to take their PayPal payment, how can you expect them to trust you enough to send you a money order, a form of payment that is very very difficult to recover when the seller defaults on his obligations?

I would NOT send a money order to someone I do not know well enough to form a trust. If the item or a comparable deal is not available, I will insist them to ship it COD. When you ship an item COD, you specify the amount you want for the item. The Postal Service will collect the money on your half in exchange for the merchandise on the spot.

Click to expand...

How do you know you can trust the buyer? That is the real question. There are many ways that scammers can look "trustworthy", and seller greed helps them. But the bottom line is that you really don't know until the transaction is over. I really don't want to even deal with the various problems that can be created by trusting the wrong buyer, so I just choose to not take the chance of letting them screw me. I really don't care if they trust me or not. If the seller has good feedback and the buyer verifies that the seller is legitimate, why would there be a problem? As a seller you take a substantial risk selling a high-dollar item on eBay through Paypal because of their one-sided "Buyer" protection plan that allows buyers to back out of deals, or claim the item got broken in shipping and return an empty box back to the seller and get a Paypal refund, leaving the seller with nothing. With all of the highjacked IDs on eBay I don't believe it makes good business sense to expose myself to that kind of risk. I've never accepted Paypal and I never will unless they change their unfair treatment of sellers. I've sold items for over $1,000 and had no problems with buyers trusting me, and have never had any problems with buyers or selling items. Everybody thinks Paypal is needed to sell things on eBay but that's not true at all. They would like everybody to think it is true.

Lightmeup said:

.... The *ONLY* foolproof method of payment is a USPS money order....... Even cashiers checks and commercial money orders can bounce.

Click to expand...

I got burned with one of those fake money orders a while back. Fortunately, all I lost was some unused electronics that were just sitting around anyway. The biggest thing that bothered me when I got scammed was the delay before I found out it was a bogus money order. It was almost 2 months after I made the deposit to my account before it came back as fraudulent. I really wasn't expecting that hit to my bank account. Fortunately, it came when I could shuffle money between accounts and didn't have any checks bounce because of the chargeback. I didn't even think of specifying USPS money order. Are they more verifiable than the commercial bank money orders?

DonShock said:

I got burned with one of those fake money orders a while back. It was almost 2 months after I made the deposit to my account before it came back as fraudulent. I didn't even think of specifying USPS money order. Are they more verifiable than the commercial bank money orders?

Click to expand...

Two months is crazy, I would have had my bank for lunch if they did that to me. But it really doesn't matter; what you should do is always call your bank and ask them if it has been cleared by the payor. I always tell buyers that I won't ship until it clears completely back to the source. That way I know there won't be any problem.

USPS money orders can be bought and cashed at any U.S. post office. If you accept these as payment the key is to make sure that you cash them at the post office prior to shipping. The PO can immediately tell you if they are good or not, whereas your bank cannot. There are fake USPS MOs floating around, but if you cash it at a Post Office, they can confirm its authenticity, and you walk out with cash and no possible chance of getting ripped off. If they won't cash it then you haven't lost anything because you don't ship to the buyer until you get the cash in your hands. If you deposit it in your bank account, it could come back later and bite you. The max is $1,000 in the US and $750 in Canada. So, on expensive items you may need to get multiple MOs. All the problems reported with shipping to Canada could be stopped if sellers asked for Canada Post money orders in US Funds.

LMU

The 2 month delay was explained to me as being due to the quality of the recent counterfeits. The way I understood it, all the normal checks that can be done by the non-issuing bank appear genuine and it process through the system normally and shows as paid for a while. Apparently, it is not until the physical MO reaches the issuing bank and is compared to their records that the discrepancy is found and the MO is shown to be counterfeit. Then theat refusal works it's way back through the system ending in a chargeback on my account. I don't know the specifics of how such transactions are handled by the banks, but it sounded reasonable to me and my bank has been very good about handling problems in the past. They could have ben feeding me a bunch of BS but it seemed like an honest explanation of why there was the delay. I guess maybe I'll just stick to USPS money orders in the future instead of refusing them altogehter.