Pay Pal Charges And Your Customers

[rccolt45]

For those of you who take pay pal how do you handle their fees? I usually pass the fee on to the customer so if I charge say $100.00 I ask the customer to add an addition 2.9 percent puls.30 cents. I thought this would work until I realized paypal was figuring the 2.9 percent in the additional amount the customer was paying so I still end up on the short side. Not by much but it is playing hell with my books.

How do you all deal with this ?

[Ferg]

Figure a flat amount that is an average cost to you for your products.

Sure does simplify the books.

ferg

[veedub3]

All of your expenses should already be factored into the price of your product so their should never be a need to ask the customer to pay additional fees. Every processing company on the market charges for processing payments - that's the cost of doing business. Price your products accordingly so that you can still get a fair price for your goods after all the expenses.

[electrathon]

Yup, the fee is up to the seller to absorb.

Think of this sinerio. You go to a gun show and pay $150 for your booth. You think you will sell 10 items for the day. Would to tell the customer they have to pay an extra $15 for the privledge to buy from you at the show? I hope not, and it is the same thing.

Aaron

[Craig44]

As an individual, I don't mind paying a little extra to cover PayPal costs, as it is a convenience to both the buyer and the seller. Not to mention shipping quicker. If you're a professional or semi-professional maker, your costs should be factored in. Once you figure in the difference between getting your money instantly, directly deposited into your bank account versus driving to the bank, filling out deposit slips and waiting for checks to clear, that 3% will probably seem like a bargain. At my previous residence, I had to drive 25miles to the bank each way in a truck that gets 12mpg. At current gas prices, that's $14 just in gas.

[mncarpenter]

As an individual, I don't mind paying a little extra to cover PayPal costs, as it is a convenience to both the buyer and the seller. Not to mention shipping quicker. If you're a professional or semi-professional maker, your costs should be factored in. Once you figure in the difference between getting your money instantly, directly deposited into your bank account versus driving to the bank, filling out deposit slips and waiting for checks to clear, that 3% will probably seem like a bargain. At my previous residence, I had to drive 25miles to the bank each way in a truck that gets 12mpg. At current gas prices, that's $14 just in gas.

What Craig said. Also the instant gratification on the part of the buyer, being able to sneak that on to his credit card, whereas if he had to send you a check or MO, might not buy from you at all. All payment processing company charges you, if you had to deal strictly cash/check you wouldn't sell enough to eat at McDonalds once a month.

[chiefjason]

My prices figure in any fees and shipping. You want to pay cash and pick it up, we can talk about it.

It's like the guys on ebay that charge $12 to ship some little thing and they think they are getting away with something. Ebay figures the total price in for fees too.

[DHauser]

Good points

[rccolt45]

Ok all that makes sense but if you set your fee at X and this covers paypal fees doesn't the customer who does not pay by pay pal kind of get screwed becayse they are being charged for fees that don't apply?

[electrathon]

Here is another situation. You are making an item that uses $22 in materials. You have 6 hours of labor and you sell it for $75. You mess up and have to toss it, so you make another one, so now you have $44 in materials. Are you now going to sell it for $97? No, it sells for $75 still. You get another order for a very similar item, is it unfair that you charge $75 for the next one? You are making $22 more than the first one.

There are a number of situations that raise your profit up and down. You average the amount of profit over everything and in the end you make money or loose money.

[J Hayes]

Ok all that makes sense but if you set your fee at X and this covers paypal fees doesn't the customer who does not pay by pay pal kind of get screwed becayse they are being charged for fees that don't apply?

Just offer a cash and carry discount, any other payment takes time or has fees. You can take the cash straight to the grocery store no added time to go to the bank. I've had checks in my pocket for a month because I couldn't get to the bank.

[veedub3]

This is how I view it, if you go to Walmart and try to buy an item for $20, as soon as you get ready to swipe your debit/credit card, the cashier says, wait ...we have to add 2.9% to the price to cover the cost of our processing fees....what would you do? But if that cost is already built into the price and you pay the $20 you are a happy camper and none the wiser. Just think about everywhere you have shopped, the total cost is the same regardless of whether you pay cash, check or charge. So why would this be any different?

I have 9 businesses and I use Paypal and a Merchant account provided to me through my bank. Does not matter which company processes the payment, I am getting charged for it - which I have already factored into the cost of my product. Thirteen years in business and I do not accept checks for goods...period! I will for services rendered as in my Home Renovation Company, but never for goods purchased online or in one of my shops. You pay me with a check for a $75 product and the check bounces, what recourse do I have to recoup that? Sure I can go after you but it will cost me even more to do that, but with my Home Renovation Company and your check bounces, I place a lien on your home, notify your mortgage company of the lien, and they will pay off the encumbrance plus any filing and administration fees I incurred. I loose nothing!

The way I see it, my price is my price....does not matter if the person is paying cash, they are not getting screwed because they agreed to my price. They saw the item, they wanted the item, they paid for the item. If they paid cash, I get a couple dollars more, if they use their credit card, I get a couple dollars less. It all averages out in the end.

Karina

[Steven Kelley]

I accept paypal, credit cards, checks, cash, and possibly anything else of value. 99.9% of my customers use either paypal or a credit card. Credit card fees are almost the same as the paypal fee. I don't charge more when a customer uses paypal or a cc, and I don't charge less when one wants to send a check or if local, pay cash. The fees are one of many costs of doing business. The fees are a tax deduction at the end of the year. Price your products accordingly with the potential fees included in that price. I personally don't like it when I want to buy something and the seller wants to add another fee based on the payment method, so I don't like doing that to my customers.

[Cyberthrasher]

As a business owner, it's your responsibility to pay those fees, not your customers. I'm paying PayPal a percentage so that they can collect the money from my customer and process it through all the proper banks. I don't even consider charging that percentage onto my customers because it's not the customer's responsibility to pay for my convenience. As Karina said above, do you get charged the processing fees when you go to the store? No, you pay the same price regardless of payment method.

With all that in mind, is it really worth it to rub a customer the wrong way over a few bucks?

[camano ridge]

I figure paypal as part of doing business. I use only paypal. Because I don't have to deal with bank /credit card charges. Also to me paypal is a convenience and tracks what goes into my paypal account, it is easy to transfer to my bank account. Funny thing though I have had some customers send more money then agreed on, when I call those customers and tell them there was an error on the amount they sent me theysay they know paypal charges and they were including the charge. I usually throw in something extra with the order like a key fob or something.