Friday, December 19, 2008

PayPal

So I have been selling stuff that I have had in storage on ebay for the past couple of months. I have had such great success with buying off ebay for the past couple of years that I thought it would be fun and exciting to try my hand at selling. Wow! Did I create an uproar. The first month was fine and then the "Must Upgrade" emails started. I was not sure what was happening. I called PayPal....my trusted source for SO MANY purchases to ask what was going on and was told that it was ebay's policy that if I was going to sell on ebay, I needed to be able to accept ALL forms of payment. That didn't make sense to me....
I had already sold four items on ebay the previous month without "upgrading" anything....what the heck were they talking about???? You mean I wasn't accepting all forms of payment? I thought that was what my PayPal account was for? How am I to know either way... sellers do not receive buyers pay information other than PayPal's notation of cash payment or credit payment. I mean that's the whole draw of PayPal is that buyers can spend money securely. There's no REAL verification for sellers to have proof the credit card fee being charged is real. Wow! Was I confused. After receiving two emails entitled, "ebay Recurring Monthly Seller Fees" within a week of each other (and it was clear based on the amounts that these statements were not duplicates), I decided to give PayPal another call.

I explained to the PayPal representative (Shirvin?) everything that I understood...which wasn't much. I actually thought that a PayPal account was a PayPal account. I didn't know there were different fee structures for different "levels" of accounts. Below is what I learned, how I changed my listings on ebay as they stand now, and a little message that I'm hoping a "mucky-muck" at PayPal will read.
Ebay listing notation:

*** Please note that I have just downgraded my paypal account (12-19-08) to a personal account from a premier business account due to paypal fee structures. If your paypal account is set up to pay for items you are buying with a credit card, I will no longer accept this type of paypal transaction. I WILL, however, be able to accept a paypal payment if your paypal account is set up to pay for items you are purchasing with your bank account/cash transfer. Please be aware that when paying through paypal, both credit card and bank account information is never given to sellers. Your payment protection and all paypal guarantees are still in effect. If your paypal account is set up for credit card payment only, please contact me and we can make other payment arrangements to ensure speedy delivery of your purchase. I apologize for any inconvenience this may cause.

I just found out the following as it applies to sellers:

* Paypal Personal Account Holders: Cannot receive more than
$500/month revenue
Do not get charged for any
cash payments or money
transfers
*Paypal Premier Business Account Holders: Can receive unlimited
money revenue
Get charged the same rate
for EVERY transaction
regardless of type of
payment (cash, money
transfers & credit card).

For more information regarding my reasons for downgrading my paypal account, please visit my blog entitled Paypal at http://www.funandmentalchanges.com/.


My own observation: Paypal is shooting themselves in the foot! It seems that there is a greater income level with the premier account if EVERYONE were accepting credit card payments.... more opportunity to receive credit card transactions (and actually receive a "cut" of something big).... why would paypal charge for cash transactions on these accounts? I am NOT a businessperson and do not receive more than $500 of revenue/month. It makes sense to me NOT to accept credit card payments and save the transaction fee. Of course, because I downgraded due to this discriminatory practice, Paypal will make that much less from me. Because once I reach my $500 threshold for the month, I will just change the method of payment I accept for the rest of the month to money order. Sorry that you all are having to read this from my ebay listing....but this is the information that you WILL NOT get from the paypal.com website. They just tell you, "If you wanna sell on ebay, you need to accept ALL forms of payment." That is VERY shady in my book and I want others to know. While paypal provides an amazing service to consumers (I have LOVED it for years), they really should speak to an economist. Simple common sense tells you that "business owners" make up less than 10% and regular consumers make up the remaining 90%. But paypal does not charge the 90% for cash transactions, and DO charge the 10% causing the 10% to downgrade therefore losing a huge potential for revenue. Paypal: you should not charge transaction fees at all for cash transactions. By giving up this fee, you will make more money simply by design. With unlimited revenue potential on the premier business account, there is SURE to be FAR MORE credit card transactions and far less "downgrades". Simple math 10% getting charged 3.9% on 100% transactions or 100% getting charged 3.9% on credit card transactions only (plastic IS the preferred form of payment). Why not let FREE Cash Transactions be a "perk" for everyone? You will end up having FAR MORE people (like myself who are NOT business people... you know, the 90%) signing up for the Premier Business PayPal account opening up the posibility of a DOWNPOUR of credit card transactions and HUGE revenue for yourselves (even if EVERY person did only 1 credit card transaction, PayPal would capture the 90% AND the 10% business owners. Income for everyone would skyrocket and EVERYONE would be signing up for the PayPal Premier). I may not be a genius, but even I can clearly see how the current fee structure is hurting business mainly for PayPal. Seriously... I'm gonna stop babbling now. I hope you all understand about PayPal what took me days to understand. A special thanx to the PayPal representative Shirvin for helping me to understand after I called and said, "Someone needs to walk me through this and MAKE me understand."

A little side bar on the paypal premier business account: Transaction fees may be a "business deduction". Please speak with your tax attorney/tax accountant for eligibility. However, whether or not you are operating with the paypal premier business account doesn't determine a business qualification for such purposes. If you are not earning that $500 + per month, you may not be considered a business to deduct these expenses even IF you've been utilizing this (so called) upgraded business paypal account. I have finally figured out why I am not a millionaire yet.... I'm too smart. Apparently I need to work on being completely devoid of common sense then maybe, just maybe, I can be the one in charge. I DO look pretty snappy in my suit... I'm halfway there!

No comments: