Did you know... no transaction surcharges allowed with PayPal, yet...

[PolurNET]

Hey guys,

It recently came to my attention that sellers of any kind are NOT allowed to impose a PayPal transaction fee surcharge according to their terms of service. Yet, this seems to be a practice used by major companies, such as Enom, BuyDomains and others.

https://www.paypal.com/cgi-bin/webscr?cmd=p/gen/ua/policy_payments-outside

4.6 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.

https://www.paypal.com/cgi-bin/webs...prior_transaction_id=15533&answer_id=16777218
https://www.paypal.com/cgi-bin/webs...prior_transaction_id=15533&answer_id=16777219

So, when I was in process of ordering a domain at BD today, it's quite a shock they apparently do use a PayPal surcharge:

A 4% PayPal charge (USD $xx.xxx) will be added to the cost of the domains
for TOTAL of $xxx.xx

I've contacted a BD rep to clarify why they do this, since obviously, their other payment methods do not charge such a fee, and there is no "handling fee" in terms of domain names.

Also, this appears to be a practice frequently applied by NamePros sellers themselves, so I think it's useful that everyone knows such a policy is disallowed, for example, if as a seller you want to avoid PayPal fees and try to pass it on to your customer; this is strictly prohibited by their TOS

As for Enom and others like Direct/Resellerclub resellers, I believe they charge a fee before depositing funds via PayPal, even though this should theoretically be disallowed as well. Perhaps this piece of information isn't as clear or visible as it should be, since it is important as a buyer to know such information. The same policy applies when using your Visa/Masercard/Amex, since each of those credit card companies have agreements that explicitly state no surcharge may be applied to any purchase if a buyer uses their credit card. Nevertheless, some mom&pop shops you may have encountered in your area tend to do so anyway...

Hope this info helps someone!

 

[RickM]

Hmm, interesting...I'll be contacting our ResellerClub rep in the morning to see what they have to say.

 

[angisson]

wow how odd, I never knew that

when buying and selling NP around in chat this is a normal thing, never knew it was not allowed

thanks for the heads up

 

[B33R]

Is this new?

Not as far as I know. There has always (for as long as I can remember) been this condition - it's especially well known in regard to Ebay.

That's why this seller <<<< never adds a PP surcharge and never deals with anyone who does either.

I think it may be time to start reporting some of these bigger companies. Show 'em who's boss (that would be Paypal by the way )

 

[PolurNET]

wow how odd, I never knew that

I felt the same way, when a customer of our domain registration division reported this rather unheard of policy. After further research, it turns out to be true, even with credit card companies, and especially for UK sellers/buyers, but applies to everyone. It's interesting that major companies as mentioned previously still are not aware of this, and of course, NPers who frequently surcharge a buyer when using PayPal payment method for larger transactions to offset fees.

The good news is that there is another 'secret' method I've revealed to some who I've transacted with in the past to substantially reduce PayPal fees (especially for large domain or other manual transactions). Read about "Mass Pay" and you'll be wondering why you've never used it before for your large transactions : it's only a $1 flat charge per transaction and the buyer pays the fee! And no, you don't necessarily have to pay more than one person, even if it's called "Mass Pay"

PS: If intending to post any of this thread's information elsewhere, please quote your source

 

[Skinny]

Thanks a lot for the info.

Skinny

 

[B33R]

The good news is that there is another 'secret' method I've revealed to some who I've transacted with in the past to substantially reduce PayPal fees (especially for large domain or other manual transactions). Read about "Mass Pay" and you'll be wondering why you've never used it before for your large transactions : it's only a $1 flat charge per transaction and the buyer pays the fee!

Namedrive uses Mass Pay. I'd never heard of it until they used it to pay me last month.

Are you allowed to only use it for one transaction? I thought the whole idea of Mass Pay is that you pay large numbers of people. Surely Paypal wouldn't allow it if people are using it to avoid PP fees....

I hope that doesn't come into common usage for small transactions, there's no way I'm paying the seller's fees for him/her when I buy something!

 

[PolurNET]

Yep, paying one person at a time via Mass Pay is allowed, there is nothing that indicates otherwise. It's odd there would be a loophole for avoiding large fees for the bigger transactions, but I guess it isn't advertised much to cause any significant problems.

Certainly, it isn't beneficial, nor should it be encouraged for smaller transactions. But say you buy a $1000 domain, and the seller is frustrated he can no longer mark up the price with a 3% transaction fee and thus refuses to accept PayPal, tell him/her you will cover all the fees yourself with this 'secret' method :wave:

 

[B33R]

It's a very nice loophole. Thanks for posting it.

 

[Joey]

Thanks for posting that information, Anand! I myself don't add a surcharge, but I didn't know it was disallowed

 

[bigturnip]

Just thought I'd point out, as there a number of responses from the UK here, this policy presumably only applies in the US. I can't speak for the other countries in the UK, but in England and Wales this is covered by the Price Discrimination Order 1990. If PayPal's TOS prevent English and Welsh companies from adding a surcharge they are in direct contradiction of English and Welsh Law and therefore that section of the TOS would be deemed unlawful.

 

[DJ]

Thanks for this info, both the policy and mass pay!

Just thought I'd point out, as there a number of responses from the UK here, this policy presumably only applies in the US. I can't speak for the other countries in the UK, but in England and Wales this is covered by the Price Discrimination Order 1990. If PayPal's TOS prevent English and Welsh companies from adding a surcharge they are in direct contradiction of English and Welsh Law and therefore that section of the TOS would be deemed unlawful.

seems paypal disagrees :

No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as payment on eBay.co.uk. This is in accordance with eBay UK's surcharging policy which states: "Sellers who accept electronic money services as a means of payment for an item purchased on eBay may not impose a surcharge.
PayPal is an electronic money payment system. When you accept a PayPal payment, you are accepting e-money. You are not accepting a debit or credit card payment, even where the sender may have funded his or her PayPal account with a debit or credit card in order to fund the transaction with you. Nothing in this policy is intended to affect the legal right of a merchant in the UK to impose a surcharge for a debit or credit card transaction under the Credit Cards (Price Discrimination) Order 1990.
https://www.paypal.com/uk/cgi-bin/webscr?cmd=p/gen/ua/policy_payments-outside

 

[PolurNET]

No problem, glad to help!

Yes, as DJ pointed out, it specifically applies to the UK, but the other countries are the ones that are not explicitly pointed out; however, the agreement is still similar with credit card companies, so I think it's an universal rule if you use PayPal.

As for NP transactions, I recommend anyone who notices a member charging extra PP fees to be directed to this thread for their information

 

[NineSpoons]

Really...I've seen this around on a lot of sites, good to know now I can make them get rid of it and save some money :D

 

[dhscott]

Maybe the NP rules should be updated, it still has information on PayPal fees:

http://www.namepros.com/domains-for-sale-fixed-price-announcements.html

 

[bigturnip]

No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as payment on eBay.co.uk. This is in accordance with eBay UK's surcharging policy which states: "Sellers who accept electronic money services as a means of payment for an item purchased on eBay may not impose a surcharge.
PayPal is an electronic money payment system. When you accept a PayPal payment, you are accepting e-money. You are not accepting a debit or credit card payment, even where the sender may have funded his or her PayPal account with a debit or credit card in order to fund the transaction with you. Nothing in this policy is intended to affect the legal right of a merchant in the UK to impose a surcharge for a debit or credit card transaction under the Credit Cards (Price Discrimination) Order 1990.
https://www.paypal.com/uk/cgi-bin/webscr?cmd=p/gen/ua/policy_payments-outside

This only seems to cover transactions on ebay.co.uk, not elsewhere. Maybe because both ebay and paypal are american companies the can stipulate this, but they can't where a UK company is involved.

 

[PolurNET]

https://www.paypal.com/cgi-bin/webs...prior_transaction_id=15533&answer_id=16777219

^ I posted this in the initial post as the third link

 

[bigturnip]

https://www.paypal.com/cgi-bin/webs...prior_transaction_id=15533&answer_id=16777219

^ I posted this in the initial post as the third link

Makes sense now, as long as buyer and seller are in the UK they can make a surcharge.

Note to self: Read threads properly

 

[labrocca]

Yeah this is how Paypal has always been. The rule is there to prevent sellers from making paypal look like the scapegoat for higher fees. I know some registrars that tack on a paypal fee but it's against the TOS of paypal. I am not sure if paypal will do anything about it with large companies though.

 

[identity_00]

I think this is true for all CC processing. You cant charge an extra fee to the customer for using Visa, Mastercard ect..