Email from PayPal: Notice of Policy Updates

[hang1945]

HI all,

Please express your thoughts regarding the updated paypal policy regarding refunds for commercial transactions as advised in an email from paypal this morning.

Secifically: 

The main changes to our agreement and policies relate to the following fees:

	We will start to retain the fixed fee portion of the Commercial Transaction fee. We’ve added examples to help you understand the change; and
	We will be increasing the cap for receiving eCheque payments based on payment currency.

It has always been my view that PayPal who provide there service under an Australian Financial Services Licence but do not provide the same priviledges that are provided by other Australian Financial Services - that is to pass the Merchant Fee for Credit Card Transactions onto the customers unfair.

I understand that offering a Merchant Facility for businesses is a business expense and factored into the pricing of a businesses items.  Ebay and the auction format is slightly different and at times items can and do sell for below cost or below what a seller hopes or expects to get - many sellers aren't businesses but individuals trying to sell items that they have at home. 

As Ebay requires a "safe" form of payment and considers PayPal one of them - effectively forcing everyone to offer the option to pay via paypal I'd like to see the option in my PayPal account to tick a box that passes the PayPay Fee onto the customer.

To now know that not only can we not do this PayPal is going to KEEP THE FEE IF A TRANSACTION IS REFUNDED......... this is more unrealistic and I wonder if it breaches any conditions governed by the Financial Services Ombusman?  As I know with Merchant Facilities provided by a BANK - if the transaction is refunded (reversed) so are the fees...

Cheers Melissa

The PayPal service is provided by PayPal Australia Pty Limited (ABN 93 111 195 389) which holds an Australian Financial Services Licence, number 304962. Before deciding to sign-up for or use the PayPal service you should consider the Combined Financial Services Guide and Product Disclosure Statement, available at www.paypal.com.au.

[putney32]

As Ebay requires a "safe" form of payment and considers PayPal one of them - effectively forcing everyone to offer the option to pay via paypal I'd like to see the option in my PayPal account to tick a box that passes the PayPay Fee onto the customer.

No, you are not forced to offer paypal

as a seller you can offer Paymate or your own credit card merchant facility if you have one.

Paypal are a payment facilitator, not a credit provider, which is why you cannot pass on the fees.

from my reading of the new agreement it is only the fixed fee portion paypal will be retainng, ie. the .30cents.

[digital*ghost]

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@hang1945 wrote:

Ebay and the auction format is slightly different and at times items can and do sell for below cost or below what a seller hopes or expects to get - many sellers aren't businesses but individuals trying to sell items that they have at home. 

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To be honest, I don't think that's a good enough reason for the fees to be passed on to the buyer (or more specifically - I assume - for them to be paid on top of the purchase price during checkout).

I consider myself a business seller now, but I definitely didn't start out that way, and I learned from my first listings that auctions don't always achieve the prices you expect, most buyers pay by PayPal, and that PayPal fees can mean taking a loss (or more of one), so my first reaction was well, I better adjust how I list my items and my opening prices. That is an option that is available to all sellers, all the time (taking the costs of the services they use into consideration when they list).

As a business seller, the risk of a loss on individual items listed at auction, or as loss leaders, are still taken into consideration when I price and list something, but it's not profit / loss on an individual item that determines overall success / profit / loss.

I think it's worthwhile thinking about some of the benefits of the fees being on the seller's side of the transaction; more specifically the fact that there is nothing further to calculate when a buyer looks at an item. How would the bidding process be affected if people had to add the (potential but unknown) price, plus postage, plus a variable fee? Those that take a moment to work out the max they're prepared to pay (inclucing postage and fees), will bid the amount minus those fees so the seller is likely to wind up in much the same position anyway - possibly worse because people have a tendency to be a bit more conservative when they know the final price isn't going to be the final price. 

Or, if eBay displayed the total cost during the bidding process, including the fees that will be charged on top of the end price, people would still only bid up to the maximum they're prepared to pay, so again I doubt the seller would be any better off. (Same principle can be applied to business sellers and/or BIN items - total displayed being total the buyer pays - same calculation, same amount of money goes to the seller, just a slightly different way of breaking it up). 

The other thought is that if it is optional, in my opinion anyone who ticks the option to pass fees on to buyers would be doing a favour to anyone who doesn't, because impressions can make a difference, even if nothing else about two listings is different.   

PayPal has its benefits - I certainly don't think it's perfect, and I don't exactly welcome the change regarding the transaction fee (I was expecting it, though, it's been that way in other countries for a long time), but by keeping things simple for the buyer, I think the benefits outweigh the drawbacks overall.

[phorum_junkie*]

Way back in the mists of time in the UK you were allowed to pass on the Paypal fees, guess what happened? Sensible sellers writ large in their descriptions that they did NOT pass on the fees and which sellers do you think did the best?