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artists_beware
EDIT: Haha, I almost forgot that I posted this! I actually got some advice before this actually appeared on A_B, but I think everyone gave really great answers! Thank you! I'm sure you guys know that I would never charge such things maliciously. I just was not fully aware of how the fees worked (I originally thought it was standard to charge the fees (no matter what you call it). But now I think I know what to do! Thanks again! :)
I reeeaaally should have posted here before I posted on my art sites (because I think I got people unnerved).
Anyway, so I've discovered recently that if too many "gifts" are sent through Paypal, my account can lock down. That's how I've done my commissions for the longest time, but now since I get a lot more than usual, I feel the need to implement the fees.
I kinda announced it on my sites, but I don't think I'm getting that much of a good response out of it. Some are suggesting that I figure it into my prices, but I have too many prices to list (like...I have my base prices, but the price differs depending on what each individual wants). I mean, the best I can do is figure it after I find the total for that individual client.
Did I change my policy too quickly? Again, I'm not doing this just to get more money out of the client (and that fee money doesn't go to me anyway), I just don't wanna get in trouble. HALP.
I reeeaaally should have posted here before I posted on my art sites (because I think I got people unnerved).
Anyway, so I've discovered recently that if too many "gifts" are sent through Paypal, my account can lock down. That's how I've done my commissions for the longest time, but now since I get a lot more than usual, I feel the need to implement the fees.
I kinda announced it on my sites, but I don't think I'm getting that much of a good response out of it. Some are suggesting that I figure it into my prices, but I have too many prices to list (like...I have my base prices, but the price differs depending on what each individual wants). I mean, the best I can do is figure it after I find the total for that individual client.
Did I change my policy too quickly? Again, I'm not doing this just to get more money out of the client (and that fee money doesn't go to me anyway), I just don't wanna get in trouble. HALP.
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no subject
Date: 2011-03-01 03:45 pm (UTC)If I'm not mistaken, Paypal is like Visa/MC where the contract you signed with Paypal states you can't include a "Paypal fee."
People get around this type of statement by offering a "cash discount," however in your case just mark up prices accordingly. You'll have to state a higher price according to your items.
no subject
Date: 2011-03-01 03:47 pm (UTC)no subject
Date: 2011-03-01 04:01 pm (UTC)Apparently I was wrong!No I wasn't. That was silly.no subject
Date: 2011-03-01 04:09 pm (UTC)Someone already covered that marking as gifts is really only an issue because of the ability to dispute a payment, but since you are using it as a business that's a pretty big issue.
The long and the short of it regarding fees is that it's probably safest not to CALL them paypal fees. Just tack it on, or call it a convenience fee, or figure it into shipping.
no subject
Date: 2011-03-01 04:13 pm (UTC)https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=ua/UserAgreement_full&locale.x=en_US#7.%20Closing%20Your%20Account.
"For PayPal Business Payments, the PayPal Business Payment fee is paid by the recipient unless it is disclosed to you before you send the payment that you, the sender, must pay this fee."
I'm really liking Paypal if there are no further rules regarding who pays fees. For any new commissions, you can simply state, "The price is XX + the PayPal fee."
Here is an official email reply I got once upon a memory.
Date: 2011-03-01 04:45 pm (UTC)PayPal offers our members access to the world's leading online payment service. As our network of members has grown, an increasing number of sellers of goods and services are accepting payments through PayPal.
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').
· In order to comply with these laws and regulations, sellers may not charge a fee for accepting PayPal
· This limitation does not prevent sellers 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)
· Sellers residing in the United Kingdom and listing items for sale on a UK-based website may impose a surcharge, but only under the following conditions:
1. Both the buyer and seller reside in the United Kingdom;
2. The purchase price is paid in pounds sterling;
3. The surcharge imposed by the seller is no greater than is necessary to recover the receiving fees incurred by the seller;
4. The seller clearly indicates to the buyer prior to the buyer's submission of a bid or (in non-auction transactions) prior to completion of the purchase that a surcharge will be incurred and the amount of the surcharge
Thank you for being part of the PayPal community.
Sincerely,
David
PayPal Global Services
PayPal, an eBay Company
Here is the TOS on 'Personal Payments'
Date: 2011-03-01 04:54 pm (UTC)(To find this yourself, click “Legal Agreements” at the bottom of any PayPal page.)
4. Receiving Money.
4.1 Receiving Personal Payments.
If you are selling goods or services, you may not ask the buyer to send you a Personal Payment for the purchase. If you do so, PayPal may remove your ability to accept Personal Payments.
--
There is a monitoring team that watches accounts for this type of activity, and clear repeated use of the personal payments option for payment of goods can get you suspended.
no subject
Date: 2011-03-01 04:56 pm (UTC)Offer price ranges for your commission lists. For example, instead of charging "sketches $20", just say "sketches start around $20-25." Make it obvious that the prices listed are only estimates, and people will have to contact you for an exact quote. This gives you a little leeway.
You can use this calculator (http://www.rolbe.com/paypal.htm) or another similar calculator to figure out paypal fees and factor that into your final cost. Alternatively, you can use the calculator to "adjust" static prices if you'd really like to stick with them (so instead of listing sketches for $25, calculate the fees and round it off to charging $26 for sketches instead).
Most importantly, do not call them PayPal fees and equally as important, if you accept other payment methods from your online commissions you MUST charge the same amount. The rule is against fees for using PayPal specifically, so don't specifically CALL them PayPal fees and don't treat them as being specific to PayPal, either. If you charge that aforementioned $26 for sketches, you charge that $26 to people paying with PayPal, with a money order, or with any other payment methods you accept. No discounts or adjustments based on payment methods.
no subject
Date: 2011-03-01 05:01 pm (UTC)Also you get dinged 3.9% + C instead of 2.9% + C when an international customer sends money to you.
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Date: 2011-03-01 05:05 pm (UTC)no subject
Date: 2011-03-01 05:21 pm (UTC)no subject
Date: 2011-03-01 05:51 pm (UTC)I highly recommend you stop considering charging a "paypal fee", and getting around it as a "gift" is something I will never do when I send payment, no matter what. I am buying goods, i will mark it as goods so I get my tiny shred of buyer protection. Just price your pieces appropriately, don't undercharge yourself, and you won't be worrying about "fees" which scare off buyers like me.
I usually add on a small extra amount to cover when I choose to, I prefer it to be choice under my own power and not under the influence of the seller. Seriously this is an issue that makes me so frustrated when artists flat out require it. I simply just don't commission them, and I am POSITIVE that there are others out there who feel this way.
Bottom line, Just figure it into your prices, round up so it doesn't look like you're trying to be shady. And accept that being a seller using PayPal involves an Overhead to be able to process those convenience payments. It is YOUR fee, not MY fee if I am the buyer.
*frustrated with how common this issue is*
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Date: 2011-03-01 05:53 pm (UTC)Er, that's what you're supposed to do? Price charts are for reference. They are guidelines. Just make that clear. Then, depending on what the client wants, you grant them a personalized quote. Up all your base prices to factor in fees. If an individual wants a more or less complex piece depending on their situation, charge them more or less based on that.
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Date: 2011-03-01 05:55 pm (UTC)And from what I have gathered, there are no repercussions to doing so.
no subject
Date: 2011-03-01 06:19 pm (UTC)If you are charging so low that a paypal fee is too much, it's time to raise prices.
no subject
Date: 2011-03-01 06:28 pm (UTC)Long answer: Businesses have overall expenses that should factor into their prices beyond the time+materials that should be in each individual product. These expenses are called overhead, and include everything from the wear on the pencil sharpener you use between commissions, electricity, heat/AC, website costs, advertising, basically all those materials that are not inherent to a single commission. This also includes transaction fees (IE Paypal and/or a credit card merchant account.) It's the cost of doing business, and a good business model will try to include it as part of the pricing. For example, if roughly 3/4ths of your customers use paypal, then calculate your prices as though each were being charged 3/4ths of a paypal fee.
If you cannot cover the fees yourself, then you need to relook at how you price your commissions. You cannot charge a separate fee for paypal usage, just as you won't be given a surcharge if you walk into your local grocery store and used a card.
Paypal fees may seem annoying to someone just starting out in business, but consider the fact that it's
A. convenient
B. more customers will use you because you take it
It's really a luxury that you pay for as a business owner that's well-worth the money. It's also MUCH less than a typical merchant account would cost you.
no subject
Date: 2011-03-01 06:31 pm (UTC)There are repercussions, someone running a business could get their account shut down.
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Date: 2011-03-01 06:46 pm (UTC)As has already been said, gifts as payment for goods is kind of bad juju.
no subject
Date: 2011-03-01 07:00 pm (UTC)no subject
Date: 2011-03-01 07:04 pm (UTC)no subject
Date: 2011-03-01 07:13 pm (UTC)no subject
Date: 2011-03-01 07:30 pm (UTC)Well, yeah, reporting income is good. I have to because I was self employed for so many years that if I stop the government will be all "WTF?' on my ass.
no subject
Date: 2011-03-01 07:44 pm (UTC)Always say it is a handling fee, which it really is in a sense. It is a fee for handling the payment through a payment service.
Here is the site I always use: http://www.rolbe.com/paypal.htm
no subject
Date: 2011-03-01 07:45 pm (UTC)Always stick with calling it a handling fee.
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Date: 2011-03-01 08:31 pm (UTC)no subject
Date: 2011-03-01 08:34 pm (UTC)My husband and I are part of a gaming clan, and one of the things we do with the leader is people donate money to our paypal, and when someone can't afford what ever game we are all playing, we dip into the funds. I also use this as my paypal for commissions. I accept payment normally, with fees and everything, but I was wondering, will the donating get our account shut down?
no subject
Date: 2011-03-01 08:48 pm (UTC)no subject
Date: 2011-03-01 09:20 pm (UTC)no subject
Date: 2011-03-01 09:45 pm (UTC)no subject
Date: 2011-03-01 10:48 pm (UTC)I get so annoyed when I see someone asking me to pay it. We're lucky to have such a service. There was once a world without internet or paypal. *shrug* to me paying the paypal fee is just a part of being a seller. You need to suck it up and just deal with it.
Raise your prices by a dollar if you have to. If I see someone charging $5.36 I'm also unlikely to commission them as it's obvious they want *me* who's already paying you to pay for their fees as well. If they charge $6? Not a problem. If they're doing what I want then I'll pay it.
It's just a pet peeve of mine. I know it doesn't bother some people but it does bug the hell out of me.
no subject
Date: 2011-03-02 05:16 am (UTC)no subject
Date: 2011-03-02 06:07 am (UTC)http://www.pcworld.com/article/125368/irs_can_ask_for_paypal_account_info_court_rules.html
Paypal's 1099 policy doesn't matter when the federal government can audit a person, and request documents related for discovery.
no subject
Date: 2011-03-02 08:31 am (UTC)And BTW - the IRS doesn't send out requests to every bank or payment processor like Paypal whenever they audit someone, if they did then these businesses wouldn't even be able to operate on a day to day basis, that's just ludicrous. Not to mention it's an invasion of privacy without Just Cause or a Court Order - an IRS audit doesn't merit that level of legal jurisdiction.
P.S. - Has anyone ever told you that you come off really insulting online?
no subject
Date: 2011-03-02 08:53 pm (UTC)no subject
Date: 2011-03-02 10:02 pm (UTC)