Don't be dumb, never pay for your coins using Paypal's gift payment

Umm... it only violates Paypal policies if you do it on eBay.

I suppose it's akin to how CC companies say it's a violation of the merchant agreement to have a minimum purchase or surcharge fee for use of a CC.

Personally, I don't use Paypal gift, as I *always* use a CC to fund my transactions on Paypal.

 

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I agree completely. In all of my post in the for sale section I always say I only take normal paypal and I'll pay the fee. It's easier, more secure, and I can easily print out a shipping label so both parties can see what's going on.

 

Not entirely true. I quoted section 4.2 which specifically mentions ebay. Further down are additional sections that do not specifically mention ebay.

Here's the link to the terms and conditions document I am using for reference.

https://www.paypal.com/webapps/mpp/ua/useragreement-full#4

 

umm... no.

 

It's not against the rules Josh...just highly ill advised.

Even though it's against the rules, it can often be hard to find someone willing to sell to you unless you accept this.

 

It is technically "illegal", or against their rules to charge extra to accept paypal, or to do a gift payment for goods, but this would be very hard for them to enforce unless you purchase using ebay. Is it the smartest thing to pay using gift option? No, but I really don't see it as unethical, unless you think driving 1 mph over the speed limit is unethical too. Basically, the fee paypal charges is for the protection they offer. You don't want to pay their fee, you get no protection.

 

Correct me if I'm wrong, but isn't the buyer paying the same 3% fee either way? Use Paypal gift, and buyer covers the fee - use Paypal goods/services, and seller covers the fee and adds a 3% surcharge. So there's no reason for buyers to ever pay by gift, as you automatically lose all protection.

 

Not exactly. Basically a coin could be $100 if you use the gift, but if you want to pay with invoice/goods, the seller might decide to add 3% to the total. If the seller is offering the same price both ways, go for the proper way obviously. But some sellers offer a discount to do gift payment, since they will not owe fees on the payment. With ebay purchases using paypal, you pretty much cannot tell the buyer there will be a surcharge.. you pay whatever the auction closed at.

 

What if PayPal decides to crack down on this issue? As mentioned earlier PayPal could target CoinTalk as people are listing here saying they will only accept Paypal gift. If you look at it from PayPal's perspective if there is an increase of complaints from people getting screwed since they paid using gift and Paypal can't help them it makes PayPal look bad even though it is clearly stated that this sort of thing is against the rules. It will damage their reputation so the executives may make the decision to take action on this issue and CoinTalk could become a place that PayPal would target. There could be a lot of issues if and when this does happen. If PayPal where to target CoinTalk along with many other sites they could do anything from demanding that Paypal gift can't be used as payment from transactions on this site and might request information such as every members email address so that they can add them to a list to keep an eye on in order to somewhat enforce this. But they might also demand that CoinTalk adds a PayPal express service to the website which would increase the cost to run coinTalk as such a service will take up a good amount of server space which will end up in adding more gigabytes to the servers that keep cointalk running which will then increase monthly overhead costs. Which then could have the possibility to force CoinTalk to shut down or downgrade in the event that the costs can't be covered by this new ad program, CT supporters, or by Peter's personal finances.

The likelihood of all of this happening is slim to none but it is a good idea to weigh every possibility. @Peter T Davis the risk as described above is very minimal but it would be in your best interest as the representative of CoinTalk to take action now and encourage the staff to stamp out PayPal Gift as an accepted form of payment on this site. This way if PayPal were to take action and contact you Peter about this issue you can simply state that The Staff here at CoinTalk are instructed to edit or even remove postings that lists PayPal Gift as an accepted form of payment. We cannot however make any attempts to monitor what happens between members using our Conversation service as CoinTalk is not liable in any shape or form for how Members decide to use our conversation service.

So that is what I suggest. Make a simple change now to avoid future frustrations.

 

"Target CoinTalk" with what? There is no "CoinTalk Checkout with PayPal" to complete these transactions. Do you really think the dozens of transactions that originate here would ever be enough to draw PayPal's attention, compared to the millions that originate on eBay, or Amazon, or Craigslist, or all the other actual commerce-oriented sites?

I suppose they could pull the plug on Peter's account, but that seems kind of ridiculous. Certainly, they could sanction the individuals who are doing it. But "targeting CoinTalk" seems incredibly farfetched.

 

Umm... yes. The surcharge (if applied) doesn't apply to Paypal transactions. It applies to non-gift Paypal transactions. Yes, that would go against 4.1, but 4.6 doesn't mean you can't charge a surcharge for Paypal gift; it means you can't charge a surcharge for Paypal, period.

Edit: Beyond that, the workaround would be the same used by many auction houses: Offer a discount for using a non-CC/non-PP payment method.

 

This is making a mountain out of a molehill. If you want to sell a coin on CT via Paypal, the math is easy.

1. Take your cost of the coin.
2. Add the amount of profit you want to make.
3. Add the s/h cost.
4. Calculate 3% of that sum and add it in.
5. "This coin is selling for x dollars shipped." Done. No mention of surcharge.

 

that was my point

 

All of your examples of what they might do are pretty much impossible. It is still a free country, and they can not force cointalk to hand over email addresses, etc.

 

All the free country etc goes out the door when someone with a big bank account and a nasty attorney threatens you with a long and costly lawsuit.

 

The issue is...CT has nothing to do with any of these transactions. Any sales done through this site are done privately, CT has absolutely nothing to do with them. There is no way paypal would "target" this site. What could happen is...someone complains that a seller (here or anywhere) forced them to use gift in a purchase. If paypal wanted to crack down (which is doubtful because they are still making money off the transaction)...they would simply stop working with that seller per their user agreement. Meaning, that seller would be kicked out of the "paypal club."

You are making this a MUCH bigger deal than they are.

 

It's a simple process to avoid even the hint of an issue down the road though.

 

Yeah, this is getting overly complicated. Clif notes version:

It is against PayPal policies for sellers to include text similar to any of the following (both on and off ebay):

Pay via PayPal Gift

or

Cash price: $100
PayPal price: $103

or

Price: $103 (with PayPal being an accepted payment method)
Cash/PayPal Gift Discounted price: $100

or

Price: $100
Add 3% for PayPal.

or

PayPal Price: $103
$3 discount for using PayPal Gift

or

PayPal gift price: $100
Normal PayPal: $103

In all of these examples, no matter how they are worded, the end result is that you are either requesting payment for goods via PayPal Gift, or you are charging more for using PayPal. Both are a violation of their terms of service.

It is not against PayPal policies to calculate PayPal fees and add them into a single price:

Price: $103
Pay via PayPal.

I see people breaking their ToS all the time and I've even seen people doing it on ebay, but that doesn't mean they are in compliance with PayPal's policies. It just means they haven't been caught yet.

PayPal policies are not the law. If a web site administrator like Peter chooses not to police PayPal's policies on his web site, PayPal isn't going to come after him with the big stick. Heck, I would hope most courts wouldn't allow such a lawsuit to go forward even if Peter was encouraging people to violate PayPal's policies, as long as his doing so wasn't actually unlawful.

They will go after the individual sellers who are violating their policies and disable their accounts. I've had it happen in the past for accepting payment for prohibited items (ammo). I had to call PayPal and reaffirm my understanding of their policies and promise not to violate them again or risk permanently losing my PayPal account.

All that being said, it's important to understand the intent of sending funds via PayPal gift as opposed to sending payments via PayPal. The gift option is offered as a convenience to PayPal users to send money to another entity with no strings attached. When you send money via the gift option, you have ZERO recourse through PayPal to recover those funds. Your only options are with the seller, law enforcement, and our civil court system. Good luck!

The 3% fee added onto the normal payment option is of course how PayPal earns money, but it also funds your buyer protection insurance. If you want PayPal to shoulder the risk of an Internet purchase, then use the normal PayPal option and stay away from PayPal gift.

 

Sadly, what this does for consumers is raise most prices by around 3% because PayPal isn't the only payment service doing this. Credit card processors do it too. Most vendors who follow the rules of their payment processors simply set their price to account for the highest fee they could encounter during a sale, and people paying cash pay a higher price to accommodate credit card fees.

Here's one possible solution, at least at some small businesses where the owner or cashiers might still have some flexibility. While it is typically a violation of the ToS of payment processors for a merchant to advertise a discount for cash, or add a surcharge for credit cards, a customer can always ask for a cash discount. I don't think obliging the customer in this way violates the ToS of most payment processors, but I could be wrong.

Example: Both of my local coin stores accept credit cards. Neither of them expressly add a surcharge for doing so or advertise a cash discount. However, both of them will give a cash discount if the customer asks, even on bullion sales.

 

The U.S. Post Office does take claims exceptionally serious. I had a case a year or so back when I was running an eBay store for a LCS (only use eBay occasionally now). I was having several items "disappearing" at a rate of around 20% as I was shipping a dozen items a day. I was using tracking and there would be no more tracking updates after a certain facility. It was showing dispatched from the local sorting facility, and that's it on all of the missing items. The return address was our business (LCS) address. I reported it to the post office I dropped the packages off at, and I was contacted immediately by their manager. They set up cameras secretly, scanned pictures of my packages without other employees knowledge (only management and myself), and the investigator also checked in between shifts to see at what point my packages were switching bins, moving, etc (to see who was handling them). This was in addition to narrowing it down by employee shifts during the time they were being scanned as dispatched. Long story short(er), the issue was resolved. Pretty serious charges resulted from something as minimal as stealing a few ASE's. I was very happy with the level of effort and seriousness they took.[/QUOTE]