Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sat July 10 2021 10:12:12

Can You Pass Your PayPal Fees on to Buyers?

By: Ina Steiner

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The answer is no, you can't simply charge your buyers the exact fees PayPal charges you for processing your payment. For the skeptics among you, here's what it says in the PayPal User Agreement:

"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."

A reader brought to our attention that not everyone is abiding by those terms, whether intentionally or not. 

"I am not a fan of PayPal either, but the shameless way a lot of merchants are openly passing along PayPal's fees (instead of just building the fees into their overall price structure) is getting ridiculous," the reader said.

The reader pointed to sellers "shamelessly charging 3-4% in surcharges to pay PayPal" on Instagram accounts. 

We found a seller posting an item for sale on Instagram that included the following verbiage: "not including, shipping base on location or #paypalfees 2.9%. Request an invoice." 

Do you think sellers should be allowed to pass along the exact payment-processing costs they're charged, whether by PayPal or other payment processors?

And unless or until it's allowed, do you see sellers violating such terms as a problem? Should PayPal crack down?



Comments (33) | Leave Comment | Permalink

Readers Comments

Perminate Link for Can You Pass Your PayPal Fees on to Buyers?   Can You Pass Your PayPal Fees on to Buyers?

This user has validated their user name. by: iheartjacksparrow

Sat Jul 10 12:17:51 2021

The fees I pay to Stripe are figured into the price of the item and the shipping charges. For instance, I pay $3.49 for a First Class Package up to four ounces, and I charge $3.90 for the same weight. I see a lot of sellers on eBay charging $4.00 for lightweight items, so I'm sure they are doing the same. I have never charged a "handling fee," and it seems disingenuous to charge such a fee if the seller is running a small business out of their home with minimal overhead and no employees.

As far a cracking down on making PayPal fees as an extra charge, they don't seem to care about the violations of the Friends and Family payments (to non-friends and family members) which actually costs them money.

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by: Kiramis This user has validated their user name.

Sat Jul 10 12:48:42 2021

This is just an attempt to stifle competition.  It should be illegal for them to put that in the agreement.  It's probably not even enforceable since it is so one sided.  

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by: Kiramis This user has validated their user name.

Sat Jul 10 12:52:38 2021

Also, passing along the fees in and of itself isn't a violation of the agreement.  It's only a violation if there is alternative way to pay without paying the surcharge otherwise it's just like charging a buyer's premium.  

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This user has validated their user name. by: The End

Sat Jul 10 13:09:39 2021

Ya, PainPal doesn't have a leg to stand on in a court of law.
So, GO AHEAD and charge the buyer. I used to...no problems...
The buyers expect it.
Gas Stations do it. Less for CASH, More for NON Cash.

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by: ShortSeller This user has validated their user name.

Sat Jul 10 15:51:45 2021

Paypal is concerned about mass retailers not people flogging one off things on instagram. It is not uncommon for payment processors to have clauses regarding favoring or incentivizing other forms of payment. Generally not the sort of thing they act out upon unless it is a retailer of some scope.

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by: AddyUp This user has validated their user name.

Sat Jul 10 18:36:49 2021

A few relatives who sell some things on Facebook routinely quote a higher price for accepting paypal, using an online calculator to get the right price. They explain this to any perspective buyer. From what they tell me many do this.

Remembering back to the early days of ebay / paypal I used to do it myself. And why not.

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by: pace306 This user has validated their user name.

Sat Jul 10 22:13:18 2021

PayPal - ebays twisted and immoral cousin is incorrect (no surprise).

Almost every one today passes processing fees on to the end user - it’s %100 legal.

The doors sgospend less time on this and move on

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This user has validated their user name. by: Bill

Sun Jul 11 01:29:28 2021

PayPal fees are part of the handling charge. You pass it on to the buyer.

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by: 4yourinfo This user has validated their user name.

Sun Jul 11 14:38:24 2021

''You can charge a handling fee not a surcharge''? They don't like the name surcharge? Sounds like the ACA calling the individual mandate a tax not a penalty! With the democrats promising all along the  mandate wasn't a tax..
I'm not following the problem with the seller on instagram you are allowed to charge a fee as long as it's the same across-the-board. PayPal's issue is with other credit card transactions not having the same fee thereby discouraging the use of PayPal - ebay would love to charge an additional fee for those checking out with paypal...

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This user has validated their user name. by: RKTOYS

Sun Jul 11 19:54:11 2021

PayPal doesn't want to see it as an itemized fee because it doesn't want customers to see what it's charging merchants and how its middlemanning contributes to higher prices.

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by: Chicago48 This user has validated their user name.

Mon Jul 12 00:12:55 2021

If the seller is on a REPUTABLE and established platform like AMZ & EB they can't pass along the 2.9%.  If they're on one of the infant sites like Instagram and FB, then I believe they can, but it wouldn't be right.  As a buyer I would look at that statement about the 2.9% and pass.  move on to somebody else.

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by: Eagle This user has validated their user name.

Mon Jul 12 00:50:28 2021

It's regrettable that the fact that PayPal's greed is even creating this conversation. The choice of either putting more money into PayPal coffers and less into your own or raising your prices that push you out of competition with other vendors selling the same stuff as you do.

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This user has validated their user name. by: Marie

Mon Jul 12 01:39:02 2021

Handling fees are for shipping, not the entire amount of the sale.  S&H as we all know stands for shipping and handling.  Handling costs can include packaging materials, labor for packaging, fees related to shipping, etc.  It is not intended to have the fees for the entire sale put in the handling.  ONLY shipping related costs.

"A handling fee is an amount charged to a customer on top of the order subtotal and shipping fees. It covers the cost of expenses related to fulfillment, such as warehouse storage cost, shipment cost, and packing cost. Handling fees are charged once per order but not to each individual product in an order."

https://www.tradegecko.com/blog/ecommerce-tools/how-to-
calculate-handling-fees


I
agree with the other sellers here that the cost of fees for the product belongs in the calculation a seller uses to develop their product price.  That is where more sellers put it.  There is no need to take less of a profit if you don't do a surcharge, simply price your items correctly considering ALL costs.

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by: Actual Seller This user has validated their user name.

Mon Jul 12 02:21:16 2021

Come on guys, of course you can "pass the fees on".

They are literally just saying "don't use our name when adding fees".

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by: Casmige This user has validated their user name.

Mon Jul 12 03:14:20 2021

I think People ought to KNOW Transparently about the various FEES these Shysters Greedily charge instead of it all being hidden behind the seller's Price for their product.  This is just not right.  Let people know so they can get mad & BLAME the right people.

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by: cvsharkey This user has validated their user name.

Mon Jul 12 06:42:01 2021

Buyers know that the merchant is going to be charged a fee for payment processing--no matter who does the processing.

It is the seller's cost of doing business. And it is a write-off against your revenue.

Grow up & handle it.

Be thankful you're not also paying a monthly fee for using PayPal.

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by: Geetar This user has validated their user name.

Mon Jul 12 06:55:44 2021

@Casmige

BINGO!!!

Notice how they say "You may charge a handling fee". They want to hide. Thats how they get away with it. These companies make a ton of money for nothing. When in fact they could make more than enough with the transaction fee ONLY.

I dont know how true it is but I heard the payment processors in China do not charge a percentage, only a small flat fee, like our per rans. fee. Sooooo whats going on here? 2.9%...3.2%???? really?? I mean think about it, thats the interest rate on mortgages right now! WTF?

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by: ZZ This user has validated their user name.

Mon Jul 12 07:21:55 2021

Every buyer can and does add the subtotals together to get the total cost to them before they pay. So why is this even an issue?

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by: Gumball This user has validated their user name.

Mon Jul 12 08:03:23 2021

Fees should be calculated into the price of your item. If you are selling your items below what it takes to make a profit once you pay fees, then why are you even in business?

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by: Geetar This user has validated their user name.

Mon Jul 12 08:18:57 2021

THIS IS ABOUT  MAKING THE BUYERS AWARE OF WHAT IT COSTS FOR THEM TO PAY YOU! YES>>>COSTS JUST TO PAY!

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