Knife Payment Question

Joined
Oct 28, 1999
Messages
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Hey guys....I once heard that it was illegal to specifically request a buyer to cover credit card or Paypal fees (3 or 4%...whatever it is now)....

Is this true?.....specifically for Paypal?
 
Greg, I have heard the same, and the "fix" is to add the surcharge into the going price and offer a discount for cash or check instead.
 
Can't speak for Paypal but the credit card issuers get upset if you tell the customer that you are adding the transaction fees onto the purchase price, in fact specifically prohibit it in the credit card agreement.
 
That's another one of my little bitches. I never ask for that to be covered by the customer. If I do that my pricing becomes inconsistant. I have overseas customers that can either pay the outragous cost of money conversion or have me eat the Paypal charge. I eat it but think 4% is too high. I would be happy to pay something closer to 2% but 4% is a little bit of a rape to me.

The last thing I want to do is get started again. I am happy.

RL
 
Check out the cost of getting set up so you can process credit cards yourself.
Pay pal isn't to bad.
TJ
 
Another way to have the customer use credit,but not have to have an account yourself ( and give the bank 3-4% ) ,is to request a credit card check from them.This takes a little mail time,but the customer is still charging it on his card.You deposit the check like any other.I don't think it is illegal to request a surcharge,you won't go to jail,but your account can be closed if you are caught.by the credit companies.The best way if you do mostly charge and paypal is to offer a discount for cash,like Fitzo said.
 
It's not illegal but it is a violation of your agreement with the card issuers.
The way I get around it is to charge everyone a 3.5% handling charge and waive it for certain types of payments.

The waiver is for cash, check or certified funds. That way I can leave it in place for both CC and customers that want terms. It is non-discriminatory that way and you can thumb your nose at the CC company if they say something.

To be honest, I've never known another company that has been challenged on it.
 
Maybe another way is to just build it into your pricing. If a fourth of your customers use PayPal, add 1% to your price and let everyone pay part of it. You pay for the losses caused by a few in all your loan interest.
 
I have a guy trying to charge me the 3% on an Ebay sale. After a bit of research, I finally found out that it is against the user agreement with Paypal:

No Surcharges. Under Visa, MasterCard, Discover and American Express regulations and the laws of several states, including California, merchants may not charge a fee to the buyer for accepting credit card payments (often called a "surcharge"). You agree that you will not impose a surcharge or any other fee for accepting PayPal as payment. This restriction does not prevent you from imposing a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge (in other words, the handling fee for transactions paid through PayPal may not be higher than the handling fee for transactions paid through other payment methods).
 
TJ Smith said:
Check out the cost of getting set up so you can process credit cards yourself.
Pay pal isn't to bad.
TJ

You've got that right. Setting up a merchant account sucks, as not many banks will talk to you unless you do a lot of business with them. Then there's the issues of charge-backs. This can run into many dollars lost, cancellation by the bank, etc. Doesn't happen with me using PayPal. I could be wrong, though.

Howie
 
howiesatwork said:
You've got that right. Setting up a merchant account sucks, as not many banks will talk to you unless you do a lot of business with them. Then there's the issues of charge-backs. This can run into many dollars lost, cancellation by the bank, etc. Doesn't happen with me using PayPal. I could be wrong, though.

Hmm ... some reading on the issue of chargebacks & Paypal: http://www.paypalsucks.com/

(Yes, i realize the website name doesn't look very objective but i found that the name is the worst part of the website, everything else is information presented in clear and concise manner)

To me it seems you've been uite lucky so far.
 
You ever think about this? When you go into a restaraunt, you are paying with a couple of twenties, and you're paying the fees for the guy next to you who is paying by credit card. As a merchant account holder, I know that typical merchant accounts charge 4-10% of the purchase to the merchant, usually around 7%! So, of course, the merchant has control over his prices, so he raises his prices overall, to cover those charges. But if you're paying by check, cash, or money order, YOU are paying for the guy who whips out his card. If you try to charge a fee for CC use, clients are disgusted and say: "They don't do that at other businesses!"
The dirty little secret is out. If you pay by cash, check, or MO, you are helping out the merchant to pay his fees. Not fair.
It seems to me that the only fair way is to set your prices with the fee figured in, then give a cash, check, or money order discount to the client.
It doesn't hurt to offer a break if a client purchases multiple knives at once, too!

Just a thought,
Jay
 
That's exactly what we do Jay. We have been able to turn this to our benefit by giving the customers the discount. They love it. It also encourges them to pay by cash or check. AM EX is the worst. Almost all major businesses use them and they charge more than MC or Visa.

It also takes on the average, 2 days longer for them to hit our account.
 
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