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"Hidden" PayPal Fees Inciting Community Unrest 309

Posted by ScuttleMonkey
from the everyone-wants-a-cut dept.
Several sites are reporting on the addition of extra fees to PayPal that are just starting to become common knowledge. While PayPal has certainly had their fair share of controversy, the new "transaction fees" that promise to affect the entire customer base are already well on their way to becoming another. "For example, a personal account sending another personal account money for a one-time payment for, say, mowing your lawn was not previously charged any fees on either side, but is now charged the usual transaction fee (the sender gets to decide who pays). The only way to avoid this is by selecting 'gift' when making the transfer — something you can't do if you're following through on a purchase or invoice from someone. And, if you fall into this category (which many people do), it's likely that you had no idea about the changes until just now."
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"Hidden" PayPal Fees Inciting Community Unrest

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  • by Shakrai (717556) on Wednesday August 19, 2009 @04:25PM (#29124583) Journal

    ... when is /. going to re-enable the direct credit card payment option for those who want to subscribe? I was a subscriber for the longest time until this option went away. Not everybody is willing to do business with Paypal or has the ability to do so.

  • Still Cheaper... (Score:5, Interesting)

    by TheKidWho (705796) on Wednesday August 19, 2009 @04:25PM (#29124587)

    ...than using a credit card.

  • Oh yeah... (Score:4, Interesting)

    by Seakip18 (1106315) on Wednesday August 19, 2009 @04:29PM (#29124657) Journal

    I had this problem a few weeks ago.

    If I remember correctly, you have to switch to the personal tab and make sure the source is a paypal balance or a bank account

    They even tell you what costs what when you send the money and click "When fees apply" link.
    Here's the excerpt from Paypal:

    Personal transfers to friends and family

            * Fully funded by:
            * PayPal balance
            * Bank account

            Free Free

            * Fully or partially funded with:
            * Credit card
            * Debit card
            * PayPal credit

    2.9% + $0.30 per transaction
    Fee is paid by the sender or recipient-sender decides.

    I used my bank account to pay a friend, so it was free. Though, if it were anything more serious, I would be leery since I can't do charge back or other convenient stuff.

    The writer does NOT mention that in the article what source the money came from.

    Perhaps another person could say why the bank account/paypal is free and the other stuff costs money.

  • Screw em (Score:4, Interesting)

    by TheRealMindChild (743925) on Wednesday August 19, 2009 @04:31PM (#29124687) Homepage Journal
    Between Ebay and Paypal fees, I can't sell anything for $10 and still break even (meaning I get nothing out of selling the merchandise). So I said screw em and now anything that needs sold goes on Craigslist.
  • by Shakrai (717556) on Wednesday August 19, 2009 @04:35PM (#29124763) Journal

    I think I'm just going to close my Paypal now

    My account was closed for me when I sold an item to someone on eBay who later claimed that he never received the item. Paypal locked my account over this dispute and claimed that I needed to provide them with a tracking number to get the block removed. I did so and then the buyer changed his story from "I never received it" to "he sent me an empty box"

    In spite of the fact that his story changed once confronted with the tracking number they still sided with the him and permanently blocked my account until I "repay" them for the money they reimbursed him. If I hadn't already transferred the funds into my checking account I would have lost them and the item I was selling.

    As far as I'm concerned Paypal can burn in hell.

  • by jeffb (2.718) (1189693) on Wednesday August 19, 2009 @04:35PM (#29124771)

    I sold an expensive (~$1800) camera package for a friend on eBay. Got an instant PayPal payment, with a confirmed shipping address, but no other communication from the buyer.

    Shipped the package to the Texas address via UPS Ground. Followed the tracking info as it hit various points, and eventually made it to the destination...

    ...where it bounced, launching an exception that the "recipient had moved", and that it was being "redirected to the new address". An address which happened to be within 50 miles of my own address. The "buyer" continued to ignore emails.

    Called up PayPal, explained that I'd shipped the package to a confirmed address. They said, "Yes, you should be covered under Seller Protection." I then explained that it had been bounced to an unconfirmed address, without any action or agreement on my part. "Oh," they said. "If you can't provide proof that the package has been delivered to a confirmed address, you aren't protected."

    "So," I ask, "you mean that I can send a package using your approved shipper, with your approved tracking, to an address that you've confirmed -- and if the "recipient" redirects the shipment somewhere else, they can then claim that they never received the package, and I'll lose my payment with no recourse?"

    "Well, I'm afraid so."

    "So I guess I'd better recall the shipment and eat the shipping fee." "Yes, if I were you, that's what I'd do."

    And that's why my eBay/PayPal annual sales volume has gone from five figures to one figure (0).

  • by clang_jangle (975789) on Wednesday August 19, 2009 @04:40PM (#29124845) Journal
    I had a bad experience with PayPal from the opposite direction. They sided with a dishonest eBay seller and facilitated him ripping me off, at which point I quickly deleted my eBay account. PayPal has many issues for sure, but this article is just "ZOMFG they're actually CHARGING me for a service!!!". Lame.
  • by scharkalvin (72228) on Wednesday August 19, 2009 @04:41PM (#29124863) Homepage

    The ONLY way I pay though PayPal is via my American Express card.
    One time I had a problem and PayPal was zero help. So I directed my
    complaint through Amex. Good old American Express came down like a ton
    of bricks on PayPal and REVERSED the transfer, which got PayPals attention quick!
    All of a sudden, PayPal was in my court and got the seller to fix things.

  • Re:Still Cheaper... (Score:3, Interesting)

    by Shakrai (717556) on Wednesday August 19, 2009 @04:54PM (#29125049) Journal

    I did use a credit card. Unfortunately, I used the "Paypal"-branded credit card issued by GE Money Bank. They have in their fine print that any charge on the card through Paypal has to be resolved through paypal. They will just give you the run-around otherwise.

    That's pretty shitty but not at all surprising coming from Paypal. I would have gotten screwed out of $800 by them if I had waited an extra day to transfer the money out of Paypal and into my checking account. Now they just refuse to do business with me until I "reimburse" them. To hell with them :)

  • Re:Mod parent up (Score:3, Interesting)

    by The Living Fractal (162153) <`banantarr' `at' `'> on Wednesday August 19, 2009 @05:15PM (#29125373) Homepage

    This is the cost of doing business with eBay, and is a major reason why eBay is on the decline. The future of online auctioning and payment is decentralized and dynamic. eBay is trying to stay afloat in a medium that is losing specific gravity -- it's GOING to sink eventually.

  • by Peet42 (904274) <Peet42@Ne[ ] ['tsc' in gap]> on Wednesday August 19, 2009 @05:22PM (#29125455)

    I made an eBay sale recently. The charges, when I placed the auction, amounted to 50p, but by the time Paypal took them from my bank account they had quadrupled to £2. On an item that only sold for £15 this amounts to a 10% surcharge. But who is getting the extra £1.50?

    eBay say that the discrepancy is down to Paypal, Paypal say they're just passing on eBay's charges. Yet, as far as I can gather, they are the same company?!?

    I get the feeling they are "bouncing" small amounts like this back and forth between the two divisions in the hope that nobody will notice, or at least that we can't be bothered chasing it up.

    I wish more sites accepted Google Checkout.

  • Re:Mod parent up (Score:5, Interesting)

    by 0100010001010011 (652467) on Wednesday August 19, 2009 @05:30PM (#29125567)

    Only if you explicitly say "Google Checkout", I put in my auctions That I DO NOT accept paypal but have 'my own' credit card processor. Of course all I do is send them a Google Checkout invoice via e-mail and they pay it.

    I'm sure if I started selling to someone that worked for paypal/ebay I might get caught but 99.9% of people out there don't give a damn.

  • by SydShamino (547793) on Wednesday August 19, 2009 @05:32PM (#29125609)

    How do you know they didn't tell the buyer to fuck off as well, and then try to just pocket the money?

    Since I see just as many stories of them siding with bad sellers as I do bad buyers, I'd bet that they use any dispute as an excuse to just keep the cash.

  • by aero6dof (415422) <> on Wednesday August 19, 2009 @05:49PM (#29125839) Homepage

    Of course, like most companies, they aren't looking to the future at all. They aren't trying to change things to sustain their business.

    This is what makes me laugh when you hear about eBay's CEO thinking of a run for CA governor and the blurbs introducing the candidate as CEO fortune whatever company eBay... Of course, that prolly guarantees she'll be our next governor.

  • Not only in the UK (Score:2, Interesting)

    by watergeus (877271) <> on Wednesday August 19, 2009 @06:02PM (#29126029) Homepage

    As out of first hand experience I can say that it is like that in the Netherlands, probably in EC as a whole.
    Also in Latin-America. I know this immediate transfer to another bank-account is also possible in Chile, probably in Argentina and Brazil too.

    Each land has so its own little banking-tradition, as if money is not international.
    For example in Chile you can not open a useful bank-account (cuenta corriente) the first year of your legal stay. Even if you own a registered Chilean Company.

    Pricing strategies vary from country to country, even when you deal with the same bank.

    It is still a mess, not only how they invest, but also how they deal with customers.

  • by JesseMcDonald (536341) on Wednesday August 19, 2009 @06:02PM (#29126033) Homepage

    This seems to be a common complaint, but it's hardly specific to PayPal. Merchants accepting credit cards get stuck with charge-backs all the time, and from what I can tell (from second-hand reports, anyway) the credit-card dispute resolution process isn't much better for sellers than PayPal's.

    The simple fact is that PayPal has no way of knowing which side is in the right. Maybe you did send an empty box, and the apparent change in story was just a misunderstanding. After all, the buyer did consistently claim not to have received the item; perhaps they simply didn't consider an empty box worth mentioning until you brought up the tracking number. The only way to avoid this sort of issue is to have a mutually-trusted third-party mediate the transaction rather than dealing directly with the buyer/seller. Unfortunately, that's only a practical solution for relatively expensive items. For everything else, well--sellers are fewer in number, deal in higher volumes, and are generally regarded as being more capable of absorbing the cost of proving their side of the dispute, or otherwise taking the occasional loss. This isn't a great solution, but it's the best available at present.

  • Re:Still Cheaper... (Score:3, Interesting)

    by petermgreen (876956) <> on Wednesday August 19, 2009 @06:12PM (#29126143) Homepage

    Infinitely more expensive than doing a simple free bank to bank payment online.
    Depends on where you live and where the recipiant lives. I looked into transferring money from my UK bank account to an ebay seller in germany that didn't take paypal (yes I know I should check before bidding and usually I do but when you are dealing with multiple auctions of the same product it's easy to get confused). It would have cost me more than the value of the transaction. Ended up sending cash through the post to settle the transaction .

    Yes paypals fees are annoying but for small international transactions what better alternatives are there?

    Also I worry about giving my bank details out, sure there are supposed to be safegaurds on direct debits but i'd still rather not have to deal with a fraudulant one if I can help it (you could get arround this to some extent though by using a savings account that doesn't allow direct debit)

  • Re:Mod parent up (Score:3, Interesting)

    by Mitreya (579078) <mitreya&gmail,com> on Wednesday August 19, 2009 @06:22PM (#29126267)
    This is the cost of doing business with eBay, and is a major reason why eBay is on the decline.

    eBay is on decline? Has netcraft confirmed it? If you are selling something you basically have two venues to do so -- eBay or Amazon. That's where people go first and that's what google returns. Where do you buy things -- craigslist?? I don't like eBay, but it is both cheaper to buy there and there is plenty of stuff simply unavailable outside of eBay. And once you are stuck with eBay you are stuck with paypal which is now fully integrated.

  • by GumphMaster (772693) on Wednesday August 19, 2009 @06:27PM (#29126327)

    My high 5-figure online business recently ditched PayPal because despite the various fees and commissions a bricks and mortar bank merchant facility was marginally cheaper and, here's the big one, they never reject a valid credit card. They also don't require nineteen types of personal information to process a simple, small payment. In the name of security PayPal occasionally would reject perfectly valid cards from customers with a good trading history (in one case several of the customer's cards were rejected). PayPal would not talk to the merchant about the customer's card, and the customer's time is better spent buying elsewhere rather than fighting to pay through the PayPal "Customer Service*" call centre in downtown Calcutta (that's what it sounds like).

    * Just who is PayPal's customer anyway? Is it the merchant or the buyer, or is it whoever gives PP the easiest option/biggest profit?

  • by ACMENEWSLLC (940904) on Wednesday August 19, 2009 @06:28PM (#29126335) Homepage

    I quit doing business with PayPal, and thus eBay, after they wanted direct access to my checking account to do any further business.

    What they really need to do is create an escrow service where I send PayPal my $, the seller sends them the goods. Goods are verified by paypal as best as possible with perhaps pictures sent to me. As the buyer, if I'm okay with that verification then they release both the goods and the funds.

    A decent fee should be associated with it, even if rejected by buyer. Perhaps arbitration fees for deciding who is at fault for rejection.

    This would not be something everyone would use, but when you are dealing with very expensive merchandise that is small such as computer devices it would be nice. A high MP photo of that Cisco management blade that costs over $10,000 would have revealed it was a clone built in China and not authentic.

    My thoughts.

  • Re:Still Cheaper... (Score:5, Interesting)

    by adisakp (705706) on Wednesday August 19, 2009 @06:46PM (#29126555) Journal

    So wait, you got screwed by PayPal, so at the first available opportunity, you gave them your credit card details so you could continue to use their service?

    Unfortunately, Paypal has become a necessary evil if you want to use E-Bay. I try to avoid it if at all possible but many sellers (at least 30-40%) on E-Bay only take Paypal for electronic payments.

    And yes, I'm trying to avoid E-Bay too but for hard-to-find or used items, you can't always find the stuff online or on Craigslist.

    Sigh... basically, that's a problem of dealing with monopolies -- which is what Paypal and E-Bay are for all practical intents and purposes.

  • by Mursk (928595) on Wednesday August 19, 2009 @07:03PM (#29126707)
    I have a hunch that they figure out who to side with based on how valuable either party is to them. If you're an infrequent buyer screwed by a big-time seller, kiss your money goodbye, and vice versa. If both parties are frequent users, maybe they just take the hit. If both parties are infrequent users, it wouldn't surprise me to hear that they do what you describe above. If X is less than the cost of a recall, we don't do one (oops, wrong shady business on that last one).
  • Re:Screw em (Score:3, Interesting)

    by TheSpoom (715771) * <slashdot@ u b e r> on Wednesday August 19, 2009 @07:34PM (#29126971) Homepage Journal

    eBay's Craigslist is actually Kijiji []. Thankfully, they haven't fucked with it too much since acquiring it... yet.

  • by Grishnakh (216268) on Wednesday August 19, 2009 @07:49PM (#29127111)

    I did so and then the buyer changed his story from "I never received it" to "he sent me an empty box"

    Damn, maybe I should have tried that. I bought an item on Ebay, which was shipped by DHL. DHL claimed it was delivered, but it was not; I was at home the day they claimed it to be delivered, and looking out my window at the front door for the delivery truck. No truck, no package. I tried to file claims, but DHL wouldn't allow me to since I wasn't the shipper, and the shipper supposedly filed a claim but withdrew it when I filed a claim with Paypal and he became rude and profane with me. Paypal and Ebay both refused to help me because DHL claimed it was delivered, so I was out $100.

    Personally, I think the DHL driver either stole it or misdelivered it, but I had zero recourse.

  • by justin12345 (846440) on Wednesday August 19, 2009 @08:53PM (#29127605)
    That begs the question, what isn't a scam? I've worked with Paypal as well as several different major Visa, AMEX, and Discover merchant providers and they all do things I don't like (I've even had to file several lawsuits). I'm not going to say that Paypal is perfect, but I don't see them as any worse then anyone else in the field.
  • by Lumpy (12016) on Wednesday August 19, 2009 @09:20PM (#29127821) Homepage

    I call BS.

    The tracking number when pulled up on UPS's website shows the UPS recorded weight of the box.

    Paypal will look that info up on a transaction. If you send a empty box, they will see that it was empty when you pull up the info.

    I had this happen, I pointed out the tracking number, AND the UPS recorded weight and asked how the hell did I send a 22 pound empty box?

    I won that dispute.

  • Re:unlicensed (Score:1, Interesting)

    by Anonymous Coward on Wednesday August 19, 2009 @09:33PM (#29127935)

    Paypal Europe actually is registered as a licensed bank in Luxembourg.

  • by timftbf (48204) on Thursday August 20, 2009 @08:44AM (#29131607)

    In an unexpected outbreak of common sense, this is not the case in the UK (and I believe the EU as a whole), where PayPal have been successfully duck-typed and do now have to operate as a financial institution.

  • Mail fraud (Score:3, Interesting)

    by schmiddy (599730) on Thursday August 20, 2009 @09:21AM (#29131945) Homepage Journal

    it's still mail fraud even if you don't use a money order.

    You're correct, assuming you ship USPS -- hadn't thought of that. And the USPS does provide a mail fraud complaint form [] online which includes both "Failure to Pay" and "Failure to Provide". Has anyone actually successfully had the USPS investigate cases of eBay fraud (e.g. buyer falsely claiming non-receipt) for non-gigantic dollar amounts, though? I googled for a bit and found people who contacted the USPS about eBay fraud, but no indications of whether USPS actually followed up.

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