http://www.paypal.com/cgi-bin/webscr?cmd=p...ayments-outside
Scroll down to V. No surcharges, note the piece in bold.
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). Nor does this restriction apply to Pound-denominated transactions by sellers residing in the United Kingdom listing items for sale on a UK-based website.
In effect if you are UK resident, with a UK-based website, selling in UKP, it is 100% legal to add a surcharge for paying by Paypal. Thats good news for UK shop owners.
Now all I need to do is update the Paypal IPN to add a % surcharge...
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22 replies to this topic
#2
Posted 27 February 2003, 15:38
Wow, now that's interesting.
If Paypal is saying that, maybe those normal Visa/MC/Discover/Amex network regulations don't hold water in the UK period, due to some overriding law? Meaning that a zone or curency, rather, based surcharge could be added to all credit card modules, too.
Not that I'm in the UK, but it's sort of fascinating to me, anyway, that any country would have laws that prevent corporate rules/regulation that side more than consumers than merchants. That's an interesting oddity. Either that, or Paypal is simply referring to their own electronic debit network (where they take money out of your bank), and not the CC payments side of their service.
If Paypal is saying that, maybe those normal Visa/MC/Discover/Amex network regulations don't hold water in the UK period, due to some overriding law? Meaning that a zone or curency, rather, based surcharge could be added to all credit card modules, too.
Not that I'm in the UK, but it's sort of fascinating to me, anyway, that any country would have laws that prevent corporate rules/regulation that side more than consumers than merchants. That's an interesting oddity. Either that, or Paypal is simply referring to their own electronic debit network (where they take money out of your bank), and not the CC payments side of their service.
#3
Posted 27 February 2003, 15:42
Indeed, I am positive that it is legal (at least in the UK) to surcharge for payment by any method. I'm trying to find out more, but it's heavy going with all the "legalese"...
If I do find out more, I'll post back.
If I do find out more, I'll post back.
#4
Posted 27 February 2003, 17:32
Quote
Under the terms of the Credit Cards (Price Discrimination) Order of 1990, you are entitled to add a surcharge up to the amount of any transaction made by credit card. However, if you decide to do so, you run the risk of being uncompetitive and upsetting your customers who will then be paying higher prices than those who pay with a debit card, or by cheque or cash.
Should you impose a surcharge, there are several procedures you must follow and a number of restrictions by which you must abide:
Under the terms of the Price Indications (Method of Payment) Regulations
1991, you must display at the entrance of your premises, and at the point of sale, how much extra you charge for payment by credit card. If you sell motor spirit, the regulations are contained in the Price Marking (Petrol)
(Amendment) Order 1991.
2. If you operate a mail, telephone or Internet order service, you must make certain that your customers are told of surcharges before they place the order. You must also ensure that your catalogues, advertisements, and the order form itself carry exact details of your intention to surcharge those customers who wish to pay by credit card.
Please remember
Price discrimination or surcharging is limited to credit cards - you may not
place a surcharge on the price you charge for payment by any other card, for example, debit cards such as Visa Debit, Visa Electron, Switch and Solo. The amount of the surcharge, which you may add to your normal cash price, must not exceed the amount of the merchant service charge that you will pay to Barclaycard Merchant Services. It is your responsibility to ensure that surcharges are only applied where permitted by legislation, even when the cardholder is not present.
Should you impose a surcharge, there are several procedures you must follow and a number of restrictions by which you must abide:
Under the terms of the Price Indications (Method of Payment) Regulations
1991, you must display at the entrance of your premises, and at the point of sale, how much extra you charge for payment by credit card. If you sell motor spirit, the regulations are contained in the Price Marking (Petrol)
(Amendment) Order 1991.
2. If you operate a mail, telephone or Internet order service, you must make certain that your customers are told of surcharges before they place the order. You must also ensure that your catalogues, advertisements, and the order form itself carry exact details of your intention to surcharge those customers who wish to pay by credit card.
Please remember
Price discrimination or surcharging is limited to credit cards - you may not
place a surcharge on the price you charge for payment by any other card, for example, debit cards such as Visa Debit, Visa Electron, Switch and Solo. The amount of the surcharge, which you may add to your normal cash price, must not exceed the amount of the merchant service charge that you will pay to Barclaycard Merchant Services. It is your responsibility to ensure that surcharges are only applied where permitted by legislation, even when the cardholder is not present.
I have contacted my local Trading Standards Office and left a phone message - hopefully they'll get back to me tomorrow, and I'll update the thread again.
#5
Posted 27 February 2003, 20:55
Quote
Now all I need to do is update the Paypal IPN to add a % surcharge...
if any store I shopped at tried to add on a surcharge for paying with paypal or credit card, I'd tell them right where they could shove their products... plenty of other stores being run by decent folk I can go to.
#7
Posted 27 February 2003, 22:38
Quote
Quote
Now all I need to do is update the Paypal IPN to add a % surcharge...
if any store I shopped at tried to add on a surcharge for paying with paypal or credit card, I'd tell them right where they could shove their products... plenty of other stores being run by decent folk I can go to.
Your point being ?
IMO, it's good to give UK shop owners the *choice* to surcharge (or not)...and it's the customers choice to shop at that store (or not)...Wheres the problem ? :roll:
#8
Posted 27 February 2003, 22:41
Just an alternative view Burt.
Why not use Attributes and allow them to choose the shipping options there...
...or simplify and get your surcharge from their intertia by not paying within the 7 days.
:?:
Why not use Attributes and allow them to choose the shipping options there...
...or simplify and get your surcharge from their intertia by not paying within the 7 days.
:?:
#9
Posted 27 February 2003, 22:59
Straight from the horses mouth.
So it appears that a UK based trader *can* surcharge. Whether he would want to or not is debatable, but this is good news as we in the UK (and Europe) often do not get as good deals as US based traders...
Interesting, eh ? Time to update all of the scripts to allow UK based shops to add on a surcharge then ?
Quote
Thank you for your inquiry to MasterCard International.
A surcharge cannot be added to the price of goods or services that you
purchase on your MasterCard card. To report a merchant in violation,
please visit our website at <url snipped>
The situation in the United Kingdom is different however, in that English
law allows merchants to surcharge. Because we can not supersede local
laws, merchants surcharging in the United Kingdom are not in violation of
our guidelines.
Best regards,
MasterCard International
Customer Service Center
A surcharge cannot be added to the price of goods or services that you
purchase on your MasterCard card. To report a merchant in violation,
please visit our website at <url snipped>
The situation in the United Kingdom is different however, in that English
law allows merchants to surcharge. Because we can not supersede local
laws, merchants surcharging in the United Kingdom are not in violation of
our guidelines.
Best regards,
MasterCard International
Customer Service Center
So it appears that a UK based trader *can* surcharge. Whether he would want to or not is debatable, but this is good news as we in the UK (and Europe) often do not get as good deals as US based traders...
Interesting, eh ? Time to update all of the scripts to allow UK based shops to add on a surcharge then ?
#10
Posted 27 February 2003, 23:16
Quote
Your point being ? IMO, it's good to give UK shop owners the *choice* to surcharge (or not)...and it's the customers choice to shop at that store (or not)...
Wheres the problem ? :roll:
IMO, it's good to give UK shop owners the *choice* to surcharge (or not)...and it's the customers choice to shop at that store (or not)...Wheres the problem ? :roll:
ps, that sounded a bit antsy, didn't mean it to be
#11
Posted 27 February 2003, 23:18
Quote
Why not use Attributes and allow them to choose the shipping options there...
...or simplify and get your surcharge from their intertia by not paying within the 7 days.
...or simplify and get your surcharge from their intertia by not paying within the 7 days.
Hmmn, I'm not understanding as the point is to surcharge people for paying by Credit Card, not any other method...I personally wouldn't/couldn't surcharge as I don't own any Osc shops, but I know some of my people that I admin Osc for would love to surcharge...
#12
Posted 28 February 2003, 03:57
Quote
Hmmn, I'm not understanding as the point is to surcharge people for paying by Credit Card, not any other method...I personally wouldn't/couldn't surcharge as I don't own any Osc shops, but I know some of my people that I admin Osc for would love to surcharge...
Probably because a lot of shop owners run a slim margin on their markups on products, then notice after a couple months or so that they are losing 15-25% of their gross due to credit card fees (gateway fees, merchant fees, discount rate, transaction fees, etc - they all add up).
If a person was selling an item for $100 which they bought for $90 (total cost including shipping, taxes, etc) they "assume" they are making $10. In actuality they are making ([$100 - 3.5%] - $0.35) for the average merchant account (including PayPal). This is $6.15 net (that's already 33% of the profit), from that you need to subtract your monthly hosting fees, gateway fees, merchant fees, misc fees, business costs, wages, etc. Lots of merchants also don't pay attention to taxes being pilfered by their merchant account - lots of people put through the total amount and get zinged on a % of the tax (which they have to pay in full anyway). Another place to lose money on a sale...
If you are making $100,000.00 net on your products in a year ($1,000,000.00 in sales / 10,000 sales = at $100.00 per sale, $10 gross profit per sale, with $3.85 in credit card fees per transaction), you'd lose $38,500.00 of that to credit card transactions with the above example. That's a lot of money, 38.5% of your net to be exact... You only "take home" $61,500 and you still haven't paid for your web hosting, merchant fees, gateway fees, etc.. Most people don't realise that before they start selling online.
You lose a bit less if your products are smaller $ amounts with smaller final profit values (lets say you sell $10 items and make $4 on each sale - that's $6 cost, 66% mark up) you pay $0.70 credit card fees for each transaction. If you sell 10,000 of these items, you've sold $100,000.00 worth of stuff, and you made $40,000 gross profit, but your credit card transactions cost you $7,000.00 (that's around 17.7% of your net gone out the door to credit card fees). Now from that remaining $33,000 you have to pay all your other business expenses. Makes it seem like an uphill battle to make decent money in online retail doesn't it? :wink:
Most buyers don't realise that when you pay with a credit card, it always costs the merchant a % of the total price. Bare minimum is 0.5% + $0.05 at even most large retail stores. Merchants also are not allowed to imply or even tell a customer that they lose money when a person uses a credit card (it's part of the merchant agreement - everywhere but the UK it appears). I always try to pay cash when I buy stuff from local retailers, they give me the best price they can do, I give them best profit margin on their minimal markup - better for me, better for them.
Thats my take on the whole deal anyway. Without the merchant account I wouldn't be able to make any sales in online retail - but you need to go into it with eyes wide open or you'll be out of business in no time wondering where all your profit went.
#13
Posted 28 February 2003, 04:37
Quote
If a person was selling an item for $100 which they bought for $90 (total cost including shipping, taxes, etc) they "assume" they are making $10.
Only one comment on this one. It takes a poor merchant to only realize a $10 profit on a $100 item. I personally won't touch anything I can't at least double my money on. I'm not interested in giving my stuff away. :wink:
#14
Posted 28 February 2003, 05:20
Quote
Quote
If a person was selling an item for $100 which they bought for $90 (total cost including shipping, taxes, etc) they "assume" they are making $10.
Only one comment on this one. It takes a poor merchant to only realize a $10 profit on a $100 item. I personally won't touch anything I can't at least double my money on. I'm not interested in giving my stuff away. :wink:
*shrug* don't go computer retail then.
If you bought an item for $50, sold it for $100, you still pay $3.85 on that sale - that's still more than 7% of your net. My original numbers were left 100's and 10's just to make it easy. Most people don't understand that a merchant rate of even 2% + $0.30 per transaction actually equals more like 4.5-15% of their net. That's all I was pointing out.
#15
Posted 02 March 2003, 13:13
Quote
Quote
If a person was selling an item for $100 which they bought for $90 (total cost including shipping, taxes, etc) they "assume" they are making $10.
Only one comment on this one. It takes a poor merchant to only realize a $10 profit on a $100 item. I personally won't touch anything I can't at least double my money on. I'm not interested in giving my stuff away. :wink:
you must not sell any highly competitve things like Electronics
Plus the avg, retail Markup (from dealer cost to MSRP) in the US for Electronics is 50%, the Avg "discount" selling price for most electronics is 30-35% markup, and online vendors avg 5-15% markup for electronics
the days of "doubling" your money in electronics are gone, the market is too competitve.
In myfeild (car audio) I avg 10%-20% on online sales
Michael
#16
Posted 31 March 2003, 04:18
I don't know if this belongs under this thread or not, but the PayPal UA doesn't appear to specifically target the 'surcharge and service fees that they charge on received money'.
For instance, if you don't have a merchant account, they charge 2.9% + $.30 on every transaction received. In order to compensate for this and not lose any money, you have to charge 3.0% + $.30 or you end up losing pennies on the dollar, but aside from that, do paypal fees count as credit card surcharges in this instance?
Are they saying "We're allowed to charge you money for our services, but you're not allowed to recompensate for that money lost"?
Just my 2 cents/1 pence worth (approximately).
For instance, if you don't have a merchant account, they charge 2.9% + $.30 on every transaction received. In order to compensate for this and not lose any money, you have to charge 3.0% + $.30 or you end up losing pennies on the dollar, but aside from that, do paypal fees count as credit card surcharges in this instance?
Are they saying "We're allowed to charge you money for our services, but you're not allowed to recompensate for that money lost"?
Just my 2 cents/1 pence worth (approximately).
#17
Posted 31 March 2003, 05:13
Quote
Quote
Quote
If a person was selling an item for $100 which they bought for $90 (total cost including shipping, taxes, etc) they "assume" they are making $10.
Only one comment on this one. It takes a poor merchant to only realize a $10 profit on a $100 item. I personally won't touch anything I can't at least double my money on. I'm not interested in giving my stuff away. :wink:
you must not sell any highly competitve things like Electronics
Plus the avg, retail Markup (from dealer cost to MSRP) in the US for Electronics is 50%, the Avg "discount" selling price for most electronics is 30-35% markup, and online vendors avg 5-15% markup for electronics
the days of "doubling" your money in electronics are gone, the market is too competitve.
In myfeild (car audio) I avg 10%-20% on online sales
I'll remember that and stick to gifts and novelties which can be marked up anywhere from 100% to 500% and still be competitive.
Wayne Luke
#18
Posted 15 May 2003, 16:30
Quote
http://www.paypal.com/cgi-bin/webscr?cmd=p...ayments-outside
Scroll down to V. No surcharges, note the piece in bold.
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). Nor does this restriction apply to Pound-denominated transactions by sellers residing in the United Kingdom listing items for sale on a UK-based website.
In effect if you are UK resident, with a UK-based website, selling in UKP, it is 100% legal to add a surcharge for paying by Paypal. Thats good news for UK shop owners.
Now all I need to do is update the Paypal IPN to add a % surcharge...
Scroll down to V. No surcharges, note the piece in bold.
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). Nor does this restriction apply to Pound-denominated transactions by sellers residing in the United Kingdom listing items for sale on a UK-based website.
In effect if you are UK resident, with a UK-based website, selling in UKP, it is 100% legal to add a surcharge for paying by Paypal. Thats good news for UK shop owners.
Now all I need to do is update the Paypal IPN to add a % surcharge...
Yes you are absaloutly correct about the UK surcharge however you have missed out one vital peice of information. You must by UK law State on your site in plain view that you infact impose a Surcharge.
#19
Posted 21 May 2003, 11:04
Well, there is no "problem" here. The only problem sems to be too critical thought about the subject.
I cannot see why any merchant would out an out say they are charging a surcharge for any reason. Nor can I see why they would charge a handling fee (separate from shipping). Sure, your base price looks smaller, but consumers are smarter than that.
To any buyer, this looks like an extra charge, A TAX, perhaps. Why not just call it "shipping and handling". One charge covers all and it is the absolute norm to do so.
COnsumers expect s&h, but not more taxes and/or a so-called surcharge. This would definitely turn many prospective buyers away. I am not sure how consumers in th UK think, but I know that is how consumers in the US think of it.
Just my 2 cents.
I cannot see why any merchant would out an out say they are charging a surcharge for any reason. Nor can I see why they would charge a handling fee (separate from shipping). Sure, your base price looks smaller, but consumers are smarter than that.
To any buyer, this looks like an extra charge, A TAX, perhaps. Why not just call it "shipping and handling". One charge covers all and it is the absolute norm to do so.
COnsumers expect s&h, but not more taxes and/or a so-called surcharge. This would definitely turn many prospective buyers away. I am not sure how consumers in th UK think, but I know that is how consumers in the US think of it.
Just my 2 cents.
#20
Posted 17 June 2003, 11:30
I agree with the principle that you make surcharges hidden, we accept paypal, stormpay, 2checkout etc, and charge say £100
but for western union payers we offer same items for £95
in USA western union can be done via internet, in Europe you cannot.
Also be aware of
http://www.wired.com/news/print/0,1294,52351,00.html
You will need to re-do your shopping carts and add
VAT: rate according to country
VAT Administration: 2.5%
The 2.5% maybe will cover you admin costs.
Otherwise, register offshore, with offshore company and put 20% of your income into e-gold until the tax man calls!
read
"the creature from jekyll island" isbn 0-912986-18-2 to understand why your freedom is none existant!
but for western union payers we offer same items for £95
in USA western union can be done via internet, in Europe you cannot.
Also be aware of
http://www.wired.com/news/print/0,1294,52351,00.html
You will need to re-do your shopping carts and add
VAT: rate according to country
VAT Administration: 2.5%
The 2.5% maybe will cover you admin costs.
Otherwise, register offshore, with offshore company and put 20% of your income into e-gold until the tax man calls!
read
"the creature from jekyll island" isbn 0-912986-18-2 to understand why your freedom is none existant!
