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Subject: Surcharge for online Paypal Debit purchases? What? rss

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Joseph
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Just purchased Fields of Fire from an online game store, and noticed a 3.9% surcharge for paying by Paypal via a debit account.

No surcharge if I'd already had the money in the Paypal account.

While I can certainly drop some money into the account to avoid this in the future, can anyone explain the story behind this surcharge? Is this due to a debit surcharge imposed on the vendor?


3.9% seems a bit onerous to me.

Clue me in people.

Falloutfan
 
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Andrew Tullsen
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Paypal charges fees for paying by credit card. And if the seller has a personal account at paypal, there are no fees for sending money from a paypal account to another.

I hope this answers your question.
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PayPal charges .30 per transaction and a max of 2.9% for the fee, less if the retailer reaches a high enough monthly volume.

Tom
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Dwayne Hendrickson
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I'm wanting to be sure I understand this. The buyer purchased online & paid via Paypal, funding with a debit card. The seller should be the one getting charged these fees, not the buyer, unless the buyer has some way to 'reverse the charges' and stick it to the buyer. Could someone post a link on Paypal showing that the buyer would be responsible for these charges?
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Andrew Tullsen
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The buyer is not responsible. But the seller can say that if the purchaser wants to pay with a credit card funded paypal account, then it's going to cost extra.
 
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Joseph
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Howitzer_120mm wrote:
Paypal charges fees for paying by credit card. And if the seller has a personal account at paypal, there are no fees for sending money from a paypal account to another.

I hope this answers your question.


That helps. While the 3.9% is only a couple of bucks, the wording seemed a bit odd to me. They do have two paypal accounts, one appears to be personal, and the other corporate. Here's the text:

*********

We accept any of the following four methods of payment:

1. Money Order (From U.S. Post Offices Only)
2. Cashiers Check drawn from a U.S. Bank or Credit Union
3. PayPal NOT funded by a Credit/Debit Card
4. PayPal funded by Credit/Debit Card (add 3.9%)

*** Posted BGG Game prices reflect a built-in 3.9% cash discount. The discount will remain in place for payment methods not involving credit or debit cards ***

*****

Customers are asked to forward to pay to one account for debit/credit funded, and the other account for non credit or debit funded. I guess the misfire on my part is that it seems a bit convoluted to me.

I suppose they use the two different e-mail addresses for their own administrative reasons.

Anyways - thanks for the input.

Falloutfan

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Chris Johnson
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Unless things have changed drastically when I wasn't looking, this is very much against PayPal's TOS.

They can lose their account if someone files a complaint.
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Andrew Tullsen
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fnord23 wrote:
Unless things have changed drastically when I wasn't looking, this is very much against PayPal's TOS.

They can lose their account if someone files a complaint.


I read paypal's user agreement and it says that you cannot have 2 accounts, and ask buyers to send to one or another one, based on how they are paying.
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Chris Johnson
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Heh.

That, too.

I was referring to the "cash discount" scam. While you can do that, PayPal requires that the published/posted price be the one that PayPal users pay; any cash discount must be separately figured.
 
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Dom L
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Howitzer_120mm wrote:
The buyer is not responsible. But the seller can say that if the purchaser wants to pay with a credit card funded paypal account, then it's going to cost extra.


They can't say that - they CAN say that it will cost less if you don't use a credit card. One way it's a surcharge, the other way it's a discount. Credit card surcharges are a no-no with Paypal, discounts are A-OK.

We've had some pretty long threads on this before, enough that I'm pretty sure I know exactly who the OP is talking about.
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Jim McMahon
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Not really. People cannot add in the cost of doing Paypal fees. People can however, give a discount for using cash. It's one of those loopholes.

Jim
 
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rocketkiwi wrote:
Howitzer_120mm wrote:
The buyer is not responsible. But the seller can say that if the purchaser wants to pay with a credit card funded paypal account, then it's going to cost extra.


They can't say that - they CAN say that it will cost less if you don't use a credit card. One way it's a surcharge, the other way it's a discount. Credit card surcharges are a no-no with Paypal, discounts are A-OK.

We've had some pretty long threads on this before, enough that I'm pretty sure I know exactly who the OP is talking about.


Discount = ok
Surcharge = not ok

Got it.
 
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Joseph
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rocketkiwi wrote:
Howitzer_120mm wrote:
The buyer is not responsible. But the seller can say that if the purchaser wants to pay with a credit card funded paypal account, then it's going to cost extra.


They can't say that - they CAN say that it will cost less if you don't use a credit card. One way it's a surcharge, the other way it's a discount. Credit card surcharges are a no-no with Paypal, discounts are A-OK.

We've had some pretty long threads on this before, enough that I'm pretty sure I know exactly who the OP is talking about.


I think you've hit on what seemed weird to me. What they're saying is "discount", but functionally it's more like a surcharge. They'd have to word it differently by saying something like: "The price is $50, or $48 if you pay from a non debit/credit card funded account".

It's only $2.00 or whatever, but it still sounds weird and they should change that. It also feels weird when they ask you to send payment to one of two accounts, based on how much you're paying and wether it's debit or the cash equivilent.

The seller has a sterling marketplace reputation on BGG, but the choice of terminology here is poor.
 
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Alex Treacher
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Not that I expect the situation to change any time soon, but I feel that this manner of using "weasel words" to make an unacceptable action acceptable is abhorrent. (EDIT: In this I don't mean specifically Paypal, but all instances of this.)

All businesses pay for credit card merchant accounts, and for a small business the sum can seem quite considerable. If they need to charge a small surcharge on credit card payments to recoup this, and say so clearly, then that's just fine.

However...

If there's a policy that states that no surcharge may be levied, trying to get around that by raising prices and offering a discount for non-credit-card payments is frankly cheating and I would consider just as much in breach of the policy as if a surcharge had been added.


As an aside, it's not just Paypal and/or their clients where this kind of thing is seen. In the UK, it's affected the government too. Over here when parking or traffic fines were issued the recipient would be given 14 days to pay, and if not paid within that period the fine doubled. (If it went beyond 28 days, it would go to court.)

However, that's changed... Since the 1998 Human Rights Act was introduced and some test cases were put forward the government and local councils now used the same weaselly "discount" wording to achieve the same ends. The fine would be £100 for example if paid within 28 days, but discounted down to £50 if paid within 14 days. The reason being that one of the Articles within the Act prohibits a government/state from threatening its citizens...
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Scott Bartel
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Prodromoi wrote:
I feel that this manner of using "weasel words" to make an unacceptable action acceptable is abhorrent.


That's exactly why I don't order from this guy anymore. That and his shipping rates are ridiculous.
 
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Will
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Prodromoi wrote:
All businesses pay for credit card merchant accounts, and for a small business the sum can seem quite considerable. If they need to charge a small surcharge on credit card payments to recoup this, and say so clearly, then that's just fine.

Visa and mastercard are pretty clear on this. They can't add surcharge to use credit cards. But as previously mentioned they can offer a cash discount.
Similarly there can't be any minimum purchase nessasary to use a credit card (even though seller will lose money on small transactions because of credit card fees)

Its understandable why they have those policies, it would discourage use of credit cards if they didn't. People would more often pay with cash or check to avoid a surcharge. So it makes good business sense from visa/mastercard perspective.

So unfortunately it's not fine. They can lose thier merchant account doing what you mentioned. (If you meant that its fine with you personally, than my apologies).

I've seen some small shops put signs up about this, they probably don't realize it is violating policy, and I've never felt like getting the shop in trouble.
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Alex Treacher
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Yargo wrote:
Visa and mastercard are pretty clear on this. They can't add surcharge to use credit cards. But as previously mentioned they can offer a cash discount.
Similarly there can't be any minimum purchase nessasary to use a credit card (even though seller will lose money on small transactions because of credit card fees)

One lives and learns - I wasn't aware of that restriction. I wonder whether that's global or only part of US-based merchant accounts... Over here it's quite common to see the surcharge or minimum purchase requirement (usually in relation to small shops) - and I'd feel a higher percentage than simply out of ignorance.
 
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Bob Flaherty
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This is nothing new and has been happening for years. Gas stations are notorious for offering a "cash" discount - which is the same thing. I have noticed more and more ebay auctions with the listing of a "cash" discount. Credit card fees can become a significant portion of the income flow and small businesses feel they need to pass that on to the customer. We have a local grocery chain that will not accept credit cards because of the fees - this helps keep their prices a little lower.

Now, to the point of a surcharge being against PayPal's TOS, that is a different matter. Changing the wording of the payment terms to fit within the TOS but still meaning the same thing (discount vs surcharge) may be semantics but works in all other businesses as well. I am sure Visa or MC do not allow merchants to pass on the surcharge to their customer, but offering a "cash" discount is semantically, psychologically and legally a different issue.

Bob
 
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Lo Ma
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If you're selling a lot of stuff and getting paid via PayPal, the 3-3.9% charge from PayPal can really eat into your ability to break even, let alone make any profit. A lot of the online boardgame vendors are pretty much shoestring operations who give deep discounts for a higher volume business. This means they don;t make much profit on a game sale. Many vendors also subsidize the shipping costs which also eats into their profit margin.

I want these businesses to remain viable. Cash discounts seem reasonable to me if it helps these fine companies stay afloat.

And yes, cash discounts comply with PayPal's requirements..
 
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Darren Dew
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LoMa wrote:
If you're selling a lot of stuff and getting paid via PayPal, the 3-3.9% charge from PayPal can really eat into your ability to break even, let alone make any profit.


Then they should find some other business to run, or run it in some other venue. This whole idea that "its so hard" is not an valid excuse just because fandom is invloved. Thousands of businesses adn startups and online venues FAIL every year, and I bet their bottom line was narrow, too. If you can't do it, get into some business where you can, or work for someone else un til you learn how.
A great example of this is the stringency and cost of American Express. While AmEx has clout, they are strict and charge a little more. I know a TON of businesses who chose not to take the Amex card, basically because its not the same cost-effectiveness as Visa/MC. Fine decision, but don't tell the Amex people they have to spend $500 or they are going to be charged a premium. You're pissing off your customers.

LoMa wrote:
This means they don;t make much profit on a game sale. Many vendors also subsidize the shipping costs which also eats into their profit margin. I want these businesses to remain viable. Cash discounts seem reasonable to me if it helps these fine companies stay afloat.


Sure, but it needs to remain aboveboard. There are PLENTY of online and eBay retailers who practice clear and honest policy WITH deep discounting.

LoMa wrote:
And yes, cash discounts comply with PayPal's requirements..


Yes, but what is described in the OP is not "cash discounts".
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I understand the seller's problem.

The reason they list the "cash price" is because their prices would be higher than other retailers that don't have a "cash price".

If they listed the price including the 3.9% (which still seems high to me), then they would no longer be competing on price.

Tom

Edit: I did just remember something else...the 2.9% is for PayPal Premier/Business members. I have been offered a 3.9% charge to get a credit card payment through my personal account which does not normally allow credit card payments. So the fee may actually be what the seller is paying.

But it still means they are circumventing the rules.
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LoMa wrote:
If you're selling a lot of stuff and getting paid via PayPal, the 3-3.9% charge from PayPal can really eat into your ability to break even, let alone make any profit. A lot of the online boardgame vendors are pretty much shoestring operations who give deep discounts for a higher volume business. This means they don;t make much profit on a game sale. Many vendors also subsidize the shipping costs which also eats into their profit margin.

I want these businesses to remain viable. Cash discounts seem reasonable to me if it helps these fine companies stay afloat.

And yes, cash discounts comply with PayPal's requirements..

Then they shouldn't take credit card payments at all, which would eliminate the entire problem.

"We take cash, check or PayPal from a bank account or PayPal balance. Sorry, we cannot take credit card payments."

Tom
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tim
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There are lots of threads on this, many about this particular seller. The seller is CLSgames, bgg id rsolow. I'm not sure why people are refraining from calling him out. I have gone round and round with him debating his business practices. He has even banned me from placing orders with him because of my questioning this. He claims his sales go up every time I debate him about this here in the forums so I'm not really sure why he felt the need to ban me from buying from him.

In the past his listings didn't specify the cash discount and it wasn't until he provided payment information that he sprung the cc surcharge on you. It was at that time that I started questioning his business practices.

Offering a cash discount is valid. This is not what he is doing. This is what I have debated with him ad-nauseoum. Listing the cash discount price and then putting in the fine print that its 3.9% more for CC is charging a surcharge. That's a violation of paypal policies.

I've also debated his math about his fee and he's charging more than what paypal is charging him. So not only is he charging more for credit cards he is making a profit on it. Charging a fee is against paypal policy, profiting from it is more than a small business trying to recoup expenses to stay afloat.

Having multiple paypal accounts to avoid paying fees is also a violation of paypal policies.

I don't have a vendetta against CLS games. I have been tempted to buy from him (at least till I was banned) but his cc surcharge and excessive shipping charges held me back each time.
 
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BoardsAndBits wrote:

Then they shouldn't take credit card payments at all, which would eliminate the entire problem.

"We take cash, check or PayPal from a bank account or PayPal balance. Sorry, we cannot take credit card payments."

Tom


The problem is that Paypal doesn't allow that in their TOS either - it's everything or nothing. What they need is some decent competition. While it may not be popular with some, I have no problem rules-lawyering Paypal. Does any one of you think for one moment that they wouldn't try to screw you out of another dime if they thought they could find a way? As long as you play by the letter of the law.
 
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eightbit wrote:
There are lots of threads on this, many about this particular seller.

Until this point I had no idea about who the "centre of attention" of this thread had been. It wasn't (and isn't) important to me, since the topic prompted me to reply about a increasingly common general situation, not this particular one.

Surely if this seller is upsetting you by breaching the stated policies of Paypal, why not report said infractions to Paypal and have done with it?

[Edited for typo.]
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