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Is there an option where Merchants invoice the Buyer merchant fees without Paypal overcharging?

New Community Member

Is there an option where Merchants invoice the Buyer merchant fees without Paypal overcharging?

We celebrated today a small business milestone -- our first full payment through PayPal from a buyer of services \o/!!!


However, we encountered one issue (as I will describe below) and we thank you in advance for your insight!

 

- Because our client preferred to pay by credit card (in lieu of cheque or electronic money transfer), we offered PayPal as a payment platform as long as they were aware that they will be responsible for the merchant fees.  Here in Canada, it is 2.9% of the total amount + $0.30 transaction fee.

 

- Based on $500, the merchant fee we calculated was $14.80 for a total of $514.80

- Upon payment by the client, PayPal deducted $15.23 merchant fees and our balance then was $499.57.

 

- When we spoke to PayPal's customer service, they mentioned that if we wanted to receive the amount closest to $500, we would have had to charge the client a higher amount.  For example, we calculated that if we charged the client $516, we would receive $500.74.  And herein lies the issue that we don't want to overcharge as $15+ in merchant fees is already a lot of money. 

 

- We felt is unfair for us and for the Buyer being overcharged, albeit the fact that we are talking about cents here.  Is there not a simpler way on the platform to prepare an invoice so that upon payment, Merchant received the exact amount ($500) and Buyer pays the exact amount ($500 + $14.80)?

 

 

1 REPLY
Anonymous_User
Not applicable

Re: Is there an option where Merchants invoice the Buyer merchant fees without Paypal overcharging?

As per the User Agreement, what is not permitted is to apply a Surcharge - meaning the client or customer pays the transaction processing fees.   Note, outside of PayPal, some credit card issuers do permit you to apply a Surcharge however, you're required to share that info upfront with the customer before they pay.  As for PayPal, there is a work around - you can charge the customer a "handling" fee  - best example I can think of is purchasing tickets for a show or event - some agencies will charge a handling fee in addition to the cost of ticket.  Per PayPal:  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.  And from experience, you should have an explanation of your fees outlined for your customers upfront so they understand their costs for your services.

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