Paypal surcharges legal?

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barkingmad

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I have seen quite a few people charging 'more' for Paypal payments or specifically Paypal payments where the payment method is a credit card.

Is this actually legal and / or seems to be against Paypal's terms that say:

No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions.

They also say:

No Splitting Payments. You may not split payments between a Personal Account and a Premier or Business Account by directing buyers paying with a credit card to send payments to your Premier or Business Account, and buyers paying with their Balance or bank account to send payments to your Personal Account. If you do so, we will charge you the Fees that would have applied to a Business or Premier Account.

Paypal actually say that it is illegal in many US states to charge a surcharge for payments by credit card?

[also posted on CPFMP site]
 

spoonrobot

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I've curious about this too.

Seems like a lot of sellers don't quite get it since the % charge doesn't even apply to them when doing cash transfers but they will still say they need the %. I usually contact the seller and ask them about it and if they are respectable most drop the fee since it doesn't even apply. If they don't, I will buy somewhere else.
 

barkingmad

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I've curious about this too.

Seems like a lot of sellers don't quite get it since the % charge doesn't even apply to them when doing cash transfers but they will still say they need the %. I usually contact the seller and ask them about it and if they are respectable most drop the fee since it doesn't even apply. If they don't, I will buy somewhere else.

Just wish people would 'keep it simple' and quote the price regardless of whether it is funded with a credit / debit card or cash - perhaps pick the mid-point of their total cost so they make a bit if people do pay cash and lose a bit if they use a credit / debit card.

Either way the percentage they charge is only about 2-3% and it must cost more (in time) to maintain two Paypal accounts - as well as potentially breaking the Paypal T&C's and possibly even being illegal in some jurisdictions.

The only variable should really be the shipping cost for domestic vs. International or shipping options (Insurance or not etc.).
 
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In many states, the law does not regulate it. In some states, they do.
http://www.gofso.com/Premium/LE/06_le_ic/fg/fg-merchants.html#MORE:B

So, technically in these states, I think the police can cite them and cause the merchant to have to appear in court. In other states, it's a contractual breach between VISA/MC/PayPal and the merchant.

The store/merchant has a legal right to establish a fee in the unregulated states, but they're under contractual agreements with VISA/MC, so doing so will breach them.

Consumers have the right to complain to VISA/MC/PayPal as they're given the power to use their card without a minimum purchase or surcharge anywhere and everywhere their logos are displayed.

Now, let's talk about PayPal. You're absolutely right.

It is a breach of PayPal terms of service to surcharge customer. If the seller bills you the surcharge, you can refuse to pay it. If he won't cooperate and you can afford to lose it, pay it and dispute it with PayPal.


It is a breach of PayPal terms of service to use multiple accounts for the purpose of circumventing fees. The clear case of this is when the same transaction is offered with two different PayPal addresses and the users are directed to pay to an address based on the payment method.

FOB Shipping is technically a valid contract, but when purchase is made with a credit card or PayPal, it would _always_ default to FOB Destination, Freight Prepaid and Added. If you're purchasing from a for-profit dealer, this is what you stick with. Insurance is not for protecting the buyer. It's for protecting the SELLER. "not responsible" won't waive them from the obligation to deliver the merchandise in the conditions described so you can consider as the title of the item belonging to the merchant, until the item is delivered in the conditions described.

Good habit: ALWAYS charge a purhase to credit card whenever possible.

Dealer sells something, describes "not responsible for damage in freight". If it gets damaged or lost

1. Contact seller, demand replacement refund or otherwise try to negotiate something you can accept.
2. Failing that do not let the merchant throw you around, escalate to PayPal
3. If paid directly with CC without PayPal or PayPal rules in the favor of them, even though you feel you weren't at fault, you start a process for chargeback.

4. There's a clause about "merchandise to be delivered in described conditions" that merchant agreed upon in merchant agreements. If they throw you their store policy, you call the card company and open a chargeback case. You let the merchant dispute the chargeback claim and let the CC company decide who's in the right in accordance with the contract.

On personal peer to peer trade, this is something to be handled on a mutual agreement on good conscious.
 
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klink

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Seems like a lot of sellers don't quite get it since the % charge doesn't even apply to them when doing cash transfers but they will still say they need the %. I usually contact the seller and ask them about it and if they are respectable most drop the fee since it doesn't even apply. If they don't, I will buy somewhere else.


To accept credit cards via paypal, you need a Business account. On a Business account, you are charged the % regardless if it is a cash transfer or credit card transaction. At least this is how it was the last time I reviewed my paypal TOS. It may have changed since then - it has been awhile since I have looked.

When I sell on ebay, I just price my goods/shipping/handling accordingly to absorb the cost.

When I buy on ebay and pay via paypal, I ALWAYS pay with a credit card. I do it for the extra measure of protection. And since I know the payee is getting soaked regardless of how I pay, Paypal at least has to pass on some of that % to the credit card company and it isn't all pure profit for them.
 

nikon

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This thread was closed down on CPF Marketplace and it should be closed down here as well. This topic has been discussed on several previous threads.....................


barkingmad.....I suggested earlier that you do a search on this topic so that we wouldn't have to go through this argument yet again. Since you apparently haven't done that, I've linked to a couple of previous threads for you, to wit...

http://www.candlepowerforums.com/vb/...ghlight=paypal

http://www.candlepowerforums.com/vb/...ghlight=paypal

PayPal is quite capable of minding its own business, as are we ours. Looking out for the interests of the rich and powerful is like pissing into the wind...one winds up wet and smelly. I know you're aware that a couple of self-righteous buttheads have just caused a problem for CPF by poking their nose where it didn't belong...

http://www.candlepowerforums.com/vb/...d.php?t=172006

http://www.cpfmarketplace.com/mp/sho...02#post2053802

I hope this topic never comes up again.


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Re: Paypal surcharges legal?
Thanks to nikon for posting links of previous threads - same topic.

We can close this one and continue in one of those.
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