Paypal For Payments..what Are The Fees?

Business By Kiddiekakes Updated 25 Dec 2010 , 5:58pm by Lcubed82

Kiddiekakes Posted 23 Dec 2010 , 5:58pm
post #1 of 11

I have a Paypal account I have used for years for Ebay and online shopping.I though it might be another option to offer my customers to pay in advance but I don't want to be giving my profits to Paypal..Does anyone know the percentage they charge? Is it a flat rate or does it depend on the price...How would I pass that fee onto the cusomer or just suck it up for the service and convenience???

What about taxes..Does the tax dept moniter online payment or do they care?

Any advice would be welcome... thumbs_up.gif

Merry Christmas everyone!!!

Laurel icon_smile.gif

10 replies
jason_kraft Posted 23 Dec 2010 , 6:35pm
post #2 of 11

PayPal charges 2.9% + $0.30 per payment (the percentage fee drops slightly as volume increases). Personally I prefer to stick to cash or checks for payment, except for situations where the customer is in another country -- in those cases, I pass the added cost on to the customer.

You owe income tax on all your net income, regardless of how you receive it (PayPal, cash, trade of services, etc.).

Kiddiekakes Posted 23 Dec 2010 , 6:53pm
post #3 of 11

Thanks Jasonkraft...Merry Christmas!!

leily Posted 23 Dec 2010 , 7:09pm
post #4 of 11

Jason covered the charges, i just wanted to mention that i do charge for them to pay me by paypal.

Since I know what the fee is on the last two i sent I made a line item that was "paypal" fee. I lost a couple of cents b/c i just did the easy math of the 2.3%+.30 on their total, not the total that i invoiced on Paypal (does this make sense?) So in the end it's not costing me more than acouple of penneys of they want to use paypal, but i do prefer cash or check (with enough time of course)

But for out of town people paypal works nicely! or the last minute orders and i need my payment.

sweetcakes Posted 23 Dec 2010 , 8:26pm
post #5 of 11

heres some fees i have paid on various priced cakes.
cake $110 fee $3.49
cake$130 fee $4.07
cake $95 fee $3.06
cake $55 fee $1.90
cake $80 fee $2.62
cake $150 fee $4.65

i absorb these fees, i find that i have had more customers because they could pay online, i dont have to worry about cheques being bad, or running to the bank to get it deposited ontime. Its 12 miles to my bank so i only go when im going to town. and i believe in the Paypals conditions you are not to charge these fees to your customers and could possibly loose your account with them. Its very easy to transfer your balance to your bank account or to pay using your balance if you buy something on line.

Kiddiekakes Posted 23 Dec 2010 , 10:47pm
post #6 of 11

Thnaks sweetcakes...That helps me alot to decide if I want to absorb a few dollars.

mrsbriggs06 Posted 23 Dec 2010 , 11:56pm
post #7 of 11

just wanted to add-- i allow people to send the payment via paypal as well.. and yes, i've heard it's in the terms that you can't pass the fees on, but as far as i'm concerned-- paypal payments are to make things easy on the BUYER. they either pay for that, or they book far enough in advance that there is time for checks to be mailed etc. Paypal isn't making their cake, so i'll be derned if i'm losing money for that. Even if you 'pad' their total, you're still having the buyer pay it, so you may as well tell them there's an additional charge.

if paypal is getting their fees, i don't know why they care who is on the paying end of 'em.

also-- what i really started to say--
was that you can get a paypal debit card. you earn 1% on all purchases ran as 'credit' when you use it. it also allows for easy access to funds you are paid via PP icon_wink.gif

jonahsmom Posted 25 Dec 2010 , 3:59pm
post #8 of 11

I think it's actually illegal to pass the fees on to the customer. That's what my FIL was told by credit card processing co. regarding his business.

jason_kraft Posted 25 Dec 2010 , 4:09pm
post #9 of 11
Originally Posted by jonahsmom

I think it's actually illegal to pass the fees on to the customer. That's what my FIL was told by credit card processing co. regarding his business.

Most credit card companies have clauses in the contract that say you can't do this, but it is done all the time, and the only penalty if you are caught enough times is losing the ability to process credit cards.

Ironically, in most credit card processing contracts it is perfectly OK to have a regular price and a "discount" for cash, which is functionally identical to passing credit card fees on to the customer.

gr8yf Posted 25 Dec 2010 , 4:13pm
post #10 of 11

Gas company allow fuel sur charges to be passed on but credit card processing co. say eat it. Something screwy cash is king.

Lcubed82 Posted 25 Dec 2010 , 5:58pm
post #11 of 11

Rather than have a separate charge, just raise your price by that amount (figure how many cents that adds because of the higher price.) At craft shows, etc, many sellers have a flat price that includes tax. You just have to pull the tax amount out when you do the bookkeeping. Same could work with other charges.

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