Can a business charge me 3-4% for using my CC through PayPal?

nolamar
Contributor
Contributor

I've been working with a general contractor to remodel my home. He accepts VISA and MC but uses PayPal. In his latest quote to me, he added this note: "All credit card payments will be made through PayPal and have a 3-4% markup fee."

 

Last week he complained that he lost about $80 or so because I wasn't told this upfront before paying the invoices. One invoice was for $1000 USD and the other was for $1755 USD. He said he'd have to eat it because I wasn't told upfront and it wasn't my fault. I know there are fees, but I thought he had already done one of two things: either figured the markup in the other quotes that I paid through PayPal OR he just uses those fees as a tax deduction.

 

So, is it okay that the contractor added the above notation in his latest quote to me? Excuse me if this is a very basic question. I've never had anyone outright tell me they were charging me for the PayPal fees. This is not an eBay-relatedtransaction.

 

Thank you for any input!

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sandypurins
Advisor
Advisor

Your contractor is in violation of PayPal's User Agreement.  Here's the applicable text and link to the policy...

 

4.5 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://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=ua/UserAgreement_full&...

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sandypurins
Advisor
Advisor

Your contractor is in violation of PayPal's User Agreement.  Here's the applicable text and link to the policy...

 

4.5 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://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=ua/UserAgreement_full&...

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nolamar
Contributor
Contributor

Thank you Sandy, for the verification. I had viewed the user agreement and had printed it out last year, so I knew something was amiss. I believe that the contractor just lost a $5800 bath remodel! I have a couple other folks lined up to quote on the work. If/when he asks me why I didn't go with him, I will be honest. That's an expensive violation on his part and I wonder how many other people he's done this to. Hmmm. Smiley Surprised

 

Much appreciated.

 

Mary

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boxman
New Community Member

while you think its terrible,

everyone who accepts paypal charges for the fee paypal imposses on the person thats accepting the funds,

its just plain curtousy to reimburse them for the cost that paypal charges to accept a payment,

 

frekain paypal charges outrageous fees for takign payments threu them

 

and i would never take a large payemnt thru them if the person wasnt willing to pay the fee's

 

what?

you expect them to work for free?

your the one wanting to pay thru paypal, you should pay the fee,

the profit margin in construction is very small,

and if he had to pay the fee, he would be workgin for you for free,

basicly PAYING YOU or paypal to do your bathroom for you,

thats crap,

 

im sure he didnt want your business anyway if he was going to loose money on the job,

 

if you must use a credit card, go get a cash advance, and pay cash,

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nolamar
Contributor
Contributor

Well boxman, I do respect your opinion on the matter and I won't do a back-and-forth with you beyond this one reply. Smiley Indifferent

 

However, the fees are tax deductible for the company if they choose to do so. Also, it is a violation of the User Agreement, as was verified in this thread. While I want to do business with them because they do wonderful work, I will only do so if they remove the clause to add an additional 3-4% on top of an already large sum.

 

I surely don't expect the company to work for free, and I don't understand how you would get that impression. I gave them close to $3000 USD in December for other work and have no problem with their current quoted price for the WORK they would be doing. I merely take issue with the 3-4% markup. I already pay interest (fees) to my own CC company and no one is responsible for that besides me.

 

Remember, it is they who accept CC through PayPal and that is not my problem as I didn't set up their business model. Thanks for your input and have a wonderful weekend! Smiley Very Happy

 

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JunkmanJim
Contributor
Contributor

    For all interested parties, the correct way to stay within credit card rules is to discount for cash. It all amounts to the same total at the end of the day but how you phrase it really matters. The complaint here is strictly semantic, you can call it a "fee" then you are up in arms or call it a discount for cash and it seems "fair". The contractor has costs and quotes jobs based on those costs. He got caught out & paid the fee the first time, then asked for compensation the second time when he knew about the fee. 

    I believe lawmakers are looking into these laws again and may allow merchants to charge more for credit cards (the merchant agreement is based on the law). The original intent of the law was to prevent companies from exploiting consumers by charging more for a financed item than a cash one but doesn't make allowances on costs for a company that has expenses but no profit from the financing. This is a particular issue for large grocery stores where a net profit of 1% is considered good.

    You may not realize what a good contractor you had, he was honest and upfront & completed the work, finding a good contractor is difficult. This guy is doing jobs for a thousand dollars, it is hard to turn a profit on jobs that small. You should be worrying about the guy who isn't sweating the 3% charge. I suspect you will shop around until you find the contractor you deserve.

 

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nolamar
Contributor
Contributor

Douglas 1911 wrote: "PP policy is absurd and only protects their greedy fee collections."

How does the PP policy protect the fee collections? Either way, PP gets their fee, whether paid by Seller or Buyer.

 

The fees are Tax Deductible.

 

Junkman Jim: The contractor does not do $1000 jobs, that was half down on a kitchen floor install (I provided the tile). I don't have to provide the e-n-t-i-r-e story on this board to get an answer to a PP question. You don't need to know the specifics of my situation, and things I have had to do to keep a renovation going on a home that my now dead brother (at 38 y.o.) lived in. My god man, you want my whole life story so it fits into your small view of my world based on one question!

 

If all of you Sellers hate PayPal so much, then use other options! I can't believe the negativity and hatred toward a company that you chose to use to accept your payments as part of your doing business. Open a real merchant account and see if people would be willing to then pay your merchant account fees. I'll bet not.

 

As far as I'm concerned, mark up your product/service to account for both profit and fees and quit whining about a 2.9% fee to collect on your product/service, and if that 2.9% is going to cut into profit, well figure it out so it doesn't, without violating the User Agreement.

 

I am SO sorry I ever joined this forum and asked a question. You all are a bunch of negative whiners over a company that you CHOOSE to do business with. It's hard for those of us who can't stand your attitudes. It's sickening here. I'm outtie. Smiley Sad

 

Have fun.

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Douglas1911
Member
Member

Anyone paying me through PayPal has offerred to pay the fee.  There is no reason the contractor should eat 3%.  On GunBroker.com all  Selles charge 3% for credit cards.    My car parts place gives a 3% discount for not using a credit card.  So it is a common practice. PP policy is absurd and only protects their greedy fee collections.  It would be a great service if the fees were not so high.

 

I am trying to do a $!4,000 transaction and I certainly am not going to eat 3%.  Would you?

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chiliweinei
Contributor
Contributor

This is an outrage that your contactor was allowed to pass on the fees without telling you.  He should have included or stated ALL fees in his proposal; then later, back-out the fees if you didn't want to use them,  though I am sure they would have said nothing unless they are a really honest contractor. 

 

Yes, there are a still few out there.  

 

Though keep in mind this is a very pissy thing to be crying about when this was only a $5800. Full remodel job!....Sounds like you beat him to death on the price, because of the economy and perhaps this was the only money he/she was making on the deal. 

 

No including NYC; which I swear is running on a total different currency other than the rest of us,  realize their is normally a 10%-15% adjustment variance depending where you live, but where we live; Most FULL remodels typically cost on avg. about $20k at the bare minimum.     

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PayPal_Adrian
PayPal Employee
PayPal Employee

Hi everyone!  I am going to lock this thread.  It has gotten off topic with interpersonal disputes.  Please refer to the Forum Decorum thread for posting expectations.

 

Adrian

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