PayPal send as gift option

[Mike Henderson]

If they send you the money as a gift and it's balance to balance, there are no fees.

Yep, I do it often. If they can take the money out of your bank account, there are no fees. If you use a credit card, PayPal has to pay a fee to the credit card company and they charge you a fee.

PayPal wants to be the primary way that people send money - they're competing with other systems including Google and Apple. If they charged to send money between friends, people wouldn't use it.

But don't feel bad for PayPal. They make money on the float. People keep money in their PayPal account and PayPal earns interest on all of that. When you have a lot of users, it adds up to a lot of money, and that adds up to a lot of interest. Similar to the way a bank makes money on the deposits that people have in their accounts.

They charge businesses a fee because the business would have to pay a fee to the credit card company if you used a credit card to make the transaction - they're just trying to be the "same" as a credit card to the business.

Mike

[Brian Elfert]

If they send you the money as a gift and it's balance to balance, there are no fees.

If I take a normal non-gift Paypal payment and the buyer uses their bank account I still get charged the same as a credit card payment.

[David Weaver]

If I take a normal non-gift Paypal payment and the buyer uses their bank account I still get charged the same as a credit card payment.

Yes. I'm sure paypal's take is that you are getting their buyer and seller protection on a transaction like that, but it's more like it's just good business to charge the same regardless so sellers have no preference about any type of transaction (plus they make more money).

Where they really nail you as a buyer is buying internationally in your home currency. If you buy in international currency with a credit card and let the card take care of the conversion, the price of the item is actually substantially lower. They say they're only making 2.5% or something, but that's bunk. They're making 2.5% on top of some arbitrary retail rate, which the credit card converts at wholesale and takes something like 2.5-2.9% and is a lot cheaper.

[Brian Elfert]

Yes. I'm sure paypal's take is that you are getting their buyer and seller protection on a transaction like that, but it's more like it's just good business to charge the same regardless so sellers have no preference about any type of transaction (plus they make more money).

Credit card processors charge a lot less for a debit card transaction because it costs less. Why shouldn't Paypal charge less? Paypal defaults every transaction to bank account and you have to specifically select a credit card to use one. I am almost certain they do this because they make a lot more money on a bank account transaction. An ACH debit is generally much less costly than credit card fees.

The last time I know that someone paid me with a bank account I don't think Paypal had all the protections they have today.

[Jim Rimmer]

I'll send money as a gift to reputable members of forums, like this one.
I can understand not wanting to give up 3% to PayPal.
Ebay and non-established members, not a chance.

Pay-pal is a business. They have to get paid for their services. Maybe 3% is debatable but that's their established rate. Cheating them out of that is unethical. If the rate is too high for you, find another way to send or receive payment.

[David Weaver]

I can't find a real problem with paypal, and sometimes I'm cheap. The credit card companies would get just as much out of me and it would be less convenient for me to sell stuff person to person.

I grew up with a lot of folks who had the attitude they weren't going to pay anything to anyone to do anything, but they didn't mind getting paid to do things. Everything that involved money was us vs. them mentality.

Now, giving ebay 10% on the other hand, I like that a lot less and I hope they're happy, because I will not sell anything on ebay unless it absolutely demands a large audience to sell. I used to sell everything there by default, and still would if they had reasonable fees (that being an opinion, of course...reasonable).

[Brian Elfert]

From 1996 to 2000 I ran a business selling Internet access. Most paid $18.95 a month. I preferred to get paid via credit card instead of sending a paper bill. It cost me 75 cents to a dollar to send a paper bill and 55 to 60 cents to process a credit card. Credit card customers were automatically charged every month while some other customers we had to chase down their money and sometimes just write off the amount owed. (We never would have used a collection agency.)

[Judson Green]

Merchants are no longer prohibited from charging a surcharge to take a credit cards. This changed as the result of a class action lawsuit settlement. There are some very specific rules about how they handle the surcharge. Visa/Mastercard have to be notified 30 days before a merchant starts charging a surcharge. The surcharge can only be the same percentage they pay for taking credit cards. Signs have to be posted.

I have not seen any business doing this yet, but I am sure some are.

Gas stations do this, especially ones located near freeways and trucking hubs.

[David Weaver]

I noticed the stations in NJ did it, but around here, they don't. It must vary by state. We used to have cash discount at stations around here, and then all of the sudden it disappeared. The cash discount is usually 2-3%. My credit card's rewards on gas is cash rewards in the amount of....drum roll....3%.

I'd rather just pay cash and get the discount without having to screw around, on principle. There was one last holdout cash only station near my parents in central PA, and they did have gas about 10 cents cheaper than anyone else. But they eventually gave up and they take cards and their price reflects it.

[Brian Elfert]

Gas stations do this, especially ones located near freeways and trucking hubs.

What gas stations I've been to do is offer a cash discount for using cash. It is not a surcharge for using a credit card. This got around the old rules where to take Mastercard and Visa you could not charge extra for a credit card. Many (maybe most?) truck stops give the cash price for credit at the auto pumps. The extra cost for credit cards is only at the truck pumps. I have a motorhome that takes diesel and I often fill at the auto pumps to avoid the extra cost for using a credit card.

Having you actually seen a gas station charging a percentage to take a credit card on top of the posted price? This is allowed now, but they have to charge the exact percentage they get charged, and they have to post pretty specific signs at the card reader.

[Moses Yoder]

I don't really see a cost of $3 to be too much to send $100 which is basically insured and guaranteed against anything that might happen with the exchange. I bought 3 large boxes of cross stitch patterns this summer at a garage sale for $20. My wife took out the ones she wanted and she is selling the rest via Facebook groups. We are channeling the money through my PayPal account, my wife does not have one, and I myself have found it to be extremely convenient. We have sold probably $200 worth of books now at $1 each, without a single glitch in the system.

[Jerome Stanek]

We have a very large lumber yard Keim lumber here that gives a discount for cash. Its real nice as their prices are better than most.

[Matt Meiser]

Having you actually seen a gas station charging a percentage to take a credit card on top of the posted price? This is allowed now, but they have to charge the exact percentage they get charged, and they have to post pretty specific signs at the card reader.

That varies by state. Here and in Ohio its allowable to advertise one price for cash, another for credit. IIRC there's some symptomatic to the wording with respect to whether its a surcharge or a discount, but in reality based on the nearby competition, most are charging a 10c premium for credit. I purposely avoid them.

[Judson Green]

What gas stations I've been to do is offer a cash discount for using cash. It is not a surcharge for using a credit card. This got around the old rules where to take Mastercard and Visa you could not charge extra for a credit card. Many (maybe most?) truck stops give the cash price for credit at the auto pumps. The extra cost for credit cards is only at the truck pumps. I have a motorhome that takes diesel and I often fill at the auto pumps to avoid the extra cost for using a credit card.

Having you actually seen a gas station charging a percentage to take a credit card on top of the posted price? This is allowed now, but they have to charge the exact percentage they get charged, and they have to post pretty specific signs at the card reader.

I think here in Wisconsin retailers can offer a discount for cash and also charge a counter or service charge for credit. The gas stations in question I've only noticed while driving on the freeway to Chicago from the Milwaukee area, I've never stopped and filled up.

Edit

The DMV is the only place I can recall that uses a counter fee for credit cards, they prefer cash or check.