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Wed Aug 10 2016 14:13:28

PayPal Rate Change Is News to Some eBay Sellers

By: Reader

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Dear Ina,
I don't complain or blog but I wanted to see a story run on PayPal Merchant Fees changing. I am a small business owner and process all my coins and collectibles transactions on eBay and Amazon. I am considered high volume by PayPal at the 2.2 percent rate, currently. However, I received a recent notice of an increase in .7 percent in processing fees taking affect next month to 2.9%. This is going to kill me since my margins are already small.

What irks me is that PayPal is completely doing away with customer loyalty. No matter what volume you do, you are going to be charged the same straight 2.9 percent fee. 

This may not be much for someone that does $100 a year but makes a huge difference for a small business owner doing 2-3 hundred thousand in sales since it's a flat rate change ($700 increase per 100K). You are actually harmed by doing more business with them with this type of schedule. 

The price change harms mid-high volume sellers that only process via PayPal on eBay. If you have a separate credit card terminal, you can keep the rate and pay a monthly fee for PayPal payments pro account that excludes these changes. 

They tried to sell me this but NOONE uses credit card on eBay so I could have this new feature on my account and it would do no good!

PayPal told me the reason they have to do this is because of the increase fees in fraud protection. I think they are trying to hurt eBay sellers.

Just thought I would pass this along for a potential story. I don't know how many people this affects but I believe it to be a lot.

I enjoy your stories and read them every day.
Best Regards,
R.

Here is the letter the seller received from PayPal earlier this month:

Beginning on August 22, 2016 we are simplifying the prices we charge for PayPal transactions and will be removing tiered merchant rates on US domestic and international purchase payments. If you are currently receiving a merchant volume discount, this will result in an increase to your rate. Your new rate will be the standard rate of 2.9% + $0.30 USD for domestic transactions and 3.9% + fixed fee* for international transactions. Please note that your current card-processing rates on PayPal Payments Pro and Virtual Terminal** will not change at this time.

Lastly, if your account qualifies as a 501(c)3 nonprofit, please refer to this link to determine if you are eligible for our discounted nonprofit rate.

If you have any questions, or want to understand these changes in more detail, please give us a call at (888) 221-1161 or visit our Help Center. This email is for your information only. The changes described above will apply automatically, there is nothing you need to do.

We value our partnership with you, and are committed to delivering value to you in many forms. PayPal Seller Protection and our fraud detection capabilities help shield you from losses so that you can sell with more confidence. We help you drive improved customer conversions and order value by offering One Touch(TM) and PayPal Credit. PayPal Working Capital lets you easily apply for loans that can help grow your business. And to drive customer base growth, you have access to sales tools for cross border selling, making it easier to sell internationally.

Thank you for being a PayPal customer. We appreciate your business.
Regards,
PayPal

* Section 8.4(d) of the PayPal User Agreement
** Rates where an American Express Card is used are also not changing

Note from the Editor: The rate change the reader is referring to was actually announced last year - PayPal has just recently sent the email notification to the final phase of customers. You can see the EcommerceBytes Newsflash story from last summer.

And here's what sellers had to say about the price change last year.




Comments (15) | Permalink

Readers Comments

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

This user has validated their user name. by: Rexford

Wed Aug 10 15:18:05 2016

Thus the moniker PayPig  that many folks use to address them.  No amount of money is ever enough for these greedy companies.

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: Nuts2U This user has validated their user name.

Wed Aug 10 15:55:39 2016

Donahoe's latest brainstorm to clip sellers for more in exchange for nothing.

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

This user has validated their user name. by: iheartjacksparrow

Wed Aug 10 16:23:09 2016

@Rexford - Actually, I think their other nickname, PreyPal, is fitting for this change. And I agree that no amount of money is going to satisfy them.

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: 27tcle This user has validated their user name.

Wed Aug 10 19:48:51 2016

They know they have no realistic competition so Om nom nom- munch much. BS is guaranteed to last through the US presidential elections.

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: Bloggo This user has validated their user name.

Wed Aug 10 21:54:57 2016

I just heard a funny joke...
"We value our partnership with you, and are committed to delivering value to you in many forms."

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: Moonwishes This user has validated their user name.
Web Site

Thu Aug 11 02:04:27 2016

>>This may not be much for someone that does $100 a year but makes a huge difference for a small business owner doing 2-3 hundred thousand in sales since it's a flat rate change ($700 increase per 100K). You are actually harmed by doing more business with them with this type of schedule. <<  

Unless I am reading this comment completely wrong, it makes no sense at all! Why is it easier for a small seller to pay that 2.9% than a seller selling thousands of dollars worth of goods a year? How is it harming you to sell more? Selling more doesn't raise your rates. The rates stay the same now whether you sell $100 worth of goods or a million dollars worth. And as it is a flat rates percentage, ALL sellers will be 'hurt' equally by the rate. Or rather some have been paying that rate for a long time and have been hurting by it and yet somehow we continue to sell. For awhile you have gotten a discount and now you won't. You apparently will have between $700-2100 more or less in expenses per year (all tax deductible remember) from sales of $100,000-300,000+ a year. How does that make you worse off than a seller who has been having to fork over that 2.9% every year with $100-20,000+ in sales?

Certainly you have a right to complain and vent about this change, but don't try to twist the facts to make it sound like small sellers that pay that same 2.9% are in a better boat than you. We are all in the same boat. And no you won't be harmed by doing more business. The more business you have the greater your profit. If you truly believe you will be harmed by doing more business, perhaps you need to talk to your accountant about it, I doubt that they would agree with you. A flat rate is a flat rate. Whether you sell $100 or million you still pay 2.9%.

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: Chicago48 This user has validated their user name.

Thu Aug 11 04:57:38 2016

because of the increase fees in fraud protection.
^^ This makes no sense to me.  Fraud protection on whose end - EB or Paypal?  Do they mean they have to refund monies because of fraud and piracy.

In any event, EB should give sellers an optional payment system, such as Stripe.

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

This user has validated their user name. by: FEEbay

Thu Aug 11 08:13:53 2016

We used to get a rate of 1.9%+.25cents per transaction from Paypig. 10 years ago, if you consistently did 100K or more per month, and with limited chargebacks and cases filed, you could get that rate. Now we are going to 2.9% for NOTHING...... Sometimes I think that an Ebay powerseller kicked sand in Donahoe's face at some point, because he sure has it out for us folks!

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: Barbbie This user has validated their user name.

Thu Aug 11 08:37:49 2016

Perhaps buyers have been taking advantage of all those perks paypal gave them to encourage claims. Paypal has paid 99% of the ones against me.
Also, I thought they did away with tiers last year or at least for me they did.
On my website, most people do not choose paypal and I have stripe too but stripe is the same price as paypal. However, since I use paypal by braintree, if they run their credit card on paypal, I pay 2.5% on those transactions. I just switched to this so not sure if it is helping any yet.

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: lisapar This user has validated their user name.

Thu Aug 11 09:05:14 2016

Thanks for the info -- I checked my rates and they have changed without even being told they changed. THANKS for the notification, Paypal !

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: Sierra This user has validated their user name.

Thu Aug 11 10:25:01 2016

I've been paying 2.9% + $.30 per PayPal transaction for 16 years. Perhaps ''R'' needs to adjust his pricing?!

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: Tiffee Jasso This user has validated their user name.

Thu Aug 11 12:01:27 2016

Where are the increased fraud rates coming from? If it is coming from certain countries, then warn sellers so they can block those countries, or pay more to do business with those countries. If it is coming from certain types of merchandise, i.e. electronics then fees should apply to that type of seller. Why should the rest of the world pay for thieves that have figured out how to game the system? Paypal like so many other businesses, penalizes everyone for a problem crime area instead of trying to stop the crime.  

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

This user has validated their user name. by: Marie

Thu Aug 11 14:10:33 2016

Maybe some overlooked an email they may have sent you.  I received this email from them in August of last year.

At PayPal, we work hard to ensure your payments are simple, secure and fast.  We innovate and invest carefully to deliver services beyond payment processing, including fraud protection and seller protection, to help keep our merchants secure.  We drive improved customer conversions and extend credit to both merchants and their customers to help businesses grow.  We also aim to make it as clear as possible how these products work, how they are priced, and how much value they deliver to you.

In that spirit, we are simplifying the prices we charge for PayPal transactions.  Effective October 1, 2015, we will remove the tiered merchant rates for US domestic and international Purchase Payments*.  This means your rate will increase if you are currently receiving a merchant volume discount.  Your new rate will be the standard rate of 2.9% + $0.30 USD for domestic transactions and 3.9% + fixed fee** for international transactions.  Please note that card-processing rates on PayPal Payments Pro and Virtual Terminal are not changing.

We value our partnership with you, and we commit to investing in new capabilities to help you grow.  At a time when the ecommerce industry is affected by unprecedented levels of fraud due to stolen cards, PayPal has expanded our seller protection to help keep you safe from fraud so that you can sell with more confidence.  PayPal Working Capital delivers more than $2 million of new loans to small businesses every single day.  To drive international growth of your customer base, we continue to build overseas to make it easy to get paid from millions of customers outside of the U.S.  Our investment in new product features such as One TouchTM have been proven to increase consumer conversion.  These few examples are just the beginning of our long-term commitment to help you grow your business.

This email is for your information only; there's nothing you need to do.  You can review the updates that will go into effect on October 1, 2015 by visiting this page after August 27th.

Thank you for being a PayPal customer.  We appreciate your business.

Regards,

PayPal

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: mindelec This user has validated their user name.

Sat Aug 13 07:45:12 2016

If a .7% fee increase is going to hurt your business model perhaps you should rethink it....

PayPal Rate Change Is News to Some eBay Sellers   PayPal Rate Change Is News to Some eBay Sellers

by: angryllama This user has validated their user name.

Sun Aug 14 12:15:42 2016

mindelec. Thank you. You beat me to it. I had a VERY successful Industrial Sales company for 20 years. I was outright stunned back in 1990 when suddenly I had Fortune 500 company Purchasing AND plant-level supervisors calling in orders and WANTING to use credit cards vs NET 30 open billing. I briefly bridled at the whole concept... up until Gulf States Utilities one of my own top 10 customers not only WANTED to do it, but notified ME and all of their roughly 2,000 suppliers that they were INSISTING upon our not only accepting CARDS, but more expressly that we had to accept their AMERICAN EXPRESS cards. For those who never HAD their own merchant account to accept Mastercard / Visa / Discover you are CLUELESS just how much an impact that had. When the fees thru my own Commercial Bank for those OTHER 3 was 3.3 percent the AMEX was fully an entire PERCENT higher. All I can say to anyone upset about a 0.7 percent increase is .. GET OVER IT.  For those 20 years... I would have LOVED to be getting only a 2.9 percent fee.... and considering how much business I did with JOE BLOW individuals AND out of state small businesses I dodged SEVERAL "bullets" by not seeing nearly so many Slooooow Pay buyers and ZERO returned check fees.  I talk with real world folks at garage and estate sales every weekend and I'm just flabbergasted how many of them don't GET what a benefit it is to receive instant payment.  



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