PayPal Closes Loophole on Fee Avoidance

by: Bill

Well it looks like they are raising the fees for out of country transactions also.The only transactions that would be affected in the US will be for over $500.00

by: Old School Seller

This rule change doesn't go far enough.  Unscrupulous sellers don't sign up for ''business'' accounts through payment apps so unfortunately, the ''loophole'' will still exist.

by: The End

My heart leaped with happiness on the first 2 words :
"PayPal Closes....."
Just have to wait a little more......

by: railady

Honestly, I don't blame PP for ending the F&F - I have wondered all along how long they would allow it and have done my best to not violate rules. This is just like anything else - dishonest users spoil a very nice perk for the honest users. As has been said earlier, the dishonest will just use personal accounts.    

When the venue I sell on (since 2000, and I've been using PP for longer than that) began collecting sales tax they required me to change from a personal account to a business account, to continue offering customers the option to use PayPal.  Everything went smoothly then, and my PP account has been problem free not only since then, but for YEARS before that.  

NOW - out of the blue - PP has slapped HOLDS on two of my sales - claiming a ''sudden'' increase in my account - except nothing ''sudden'' has been happening!!!  Sales are down (I didn't sell on eBay mid-May - mid-June because that's been a bad time for me in the past) income piddling in, but no LARGE differences. Also, compared with others I am nickel and diming it. The vast majority of my sales are two figures.

I have NO CLUE what is going on.  I was able to eliminate one of the holds by sending PayPal the UPS tracking (''delivered''). The other hold (for a measly $90 sale) is still in effect because I haven't shipped the item yet. I am wondering if PP is doing like eBay and trying to somehow accumulate funds to claim profits or income?    

by: iheartjacksparrow

@Old School Seller - What PayPal needs to do is limit the number of Friends and Family payments you can receive in a calendar year, such as ten a year or one a month. Or else put in place a method to flag the account if a person is receiving payments from "friends" all over the country (or world) in unusual amounts (like $42.25, when an actual friend would send $50).  

by: railady

@The End - you must have had problems with them to want PP to close.  As for me, despite the current problem I just posted about what I believe are unwarranted holds, this is the first time I have ever had an account ''problem'' (other than the customer/purchaser whose account turned out to have been hacked back around 2005 or 2006, and PP fixed everything on my seller end).  

It would be terrific if they would address a few issues, but for me, PP has been incredibly helpful and easy to use. Any time I have a question, a phone call has quickly resolved it.  So far my most significant issue is that I got at least an hour of personal attention trying to recover postage I paid on a return, that the seller refused to refund. I am a small seller. Where else can I find this kind of service? I can't guarantee credit card issuers the minimum sales $ they need.  Use ''Square'' or one of those services? Way more complicated and what I've encountered is more costly.  

Just my 2 cents.    

by: railady

@iheartjacksparrow - Just caught your post!  Really good ideas! I'm also wondering if maybe they are using "mystery shoppers" already to catch the most flagrant ?  I can empathize - I have been paying $20 a month to my daughter-in-law for our share of the family phone plan; she pays my grandson for us and her family. This truly is a personal expense, and it's been so incredibly convenient, but I really don't want the aggravation of trying to open a personal account just for that.  

by: railady

WHOA and sincere apologies -- am I misinterpreting this ? Reading again, it looks like my business account can still SEND a F&F payment but not RECEIVE them (?) which is fine with me !!!

 

by: The End

Hi railady  :o)
I am Anti PayPal because of what they do to people.
If they do it to them, they would do it to me.
There are THOUSANDS of documented instances of PayPal abuse and grand theft.
That should never be rewarded.
PayPal is a LOSER.
Too many insider phishing emails.
Not gonna happen to me......
I use Stripe Payments (12years and running), never a hitch, and they are Super Secure AND a pleasure to do business with.
That's it.
Just want people to know which payment entity is The BEST > Stripe.

by: That Guy

I'm just surprised people are still using preypal.

by: Old School Seller

@iheartjacksparrow
Wholeheartedly agree, and I do believe these limits will happen eventually.  These limitations will need to be across the board though with ALL payment apps!  

by: Sierra

This may be the best thing I've heard all month! I ran across the same information earlier today on my own, after hearing rumors about PayPal changing its fee structure yet again.

When PayPal raised their fixed fee from $.30 to $.49, I started using Square for more invoices because their fees seem to be lower. Now that PayPal will be doing away with the fixed fee altogether, I can go back to using PayPal (except for the customers who don't like / trust PayPal).  

by: smallstuff

The change in rates will probably not affect me at all.  In most cases, I generate an invoice and the rate will stay at 3.49% plus the 49 cent transaction fee.  As I understand it, the only time the rate drops to 2.99% is if the other party just sends me the money.  Or if we are in the same place and I key in their credit card number or use the app to read the credit card.  I guess we'll have to see how this works out.

by: Lightning

''PayPal also revealed it will streamlining the Goods and Services seller fee to 2.99%, with no fixed fee, for customers in the U.S. PayPal's current Goods and Services fee is 2.89% + $0.49 USD.''

Within the last year, everyone was complaining about the 30 cent processing fee that eBay charged not being included in the refund, if one was made.  I pointed out that PayPal was charging 49 cents, and not refunding ANY part of the total fee paid when it came to refunds.  I also said that I wouldn't be surprised if the transmittal companies just dropped the processing fee part (.30 or .49) that everyone complains about, and raises rates to MORE than compensate.  And here we have the first entry in that race to our pockets.  More to follow, I'm sure.

The more you complain, the more vigorously and deviously they work around it, costing you more.  Because they can.

by: thebobman

>>friends" all over the country (or world) in unusual amounts (like $42.25, when an actual friend would send $50).  

Not really weird. Imagine a old friend flies into town from across the country, you go out to dinner and split the bill, total was like 84.50, or maybe they got 2 drinks instead of one, and they forgot their wallet in the hotel room. And then paid it when they got back home.

by: spooky

This is an example of why I am moving a large amount of my items to sites that sell locally for cash only. I am also putting carloads every week through a local auction sale. The 1099 is killing me, I am giving up 40% off the net. Can not run my business that way any longer.  

by: fusgeyer

I dont bother with PayPal Friends and Family payments. I use CashApp for that. No fees unless you take an immediate withdrawl of cash or to a credit/debit card. Don't like to keep all of my money in one basket. You can use CashApp for business too, if you want.

by: Working It

In the past, I have used my Business PayPal account to also receive payments from friends around the country for items we sourced locally for them.

What I mean by that is they were looking for something that we (or they) found at an auction local to us, they told us how much they were willing to pay, and we bought it, sent it to them, and let them know the total cost, including shipping. Since we were buying for ourselves, as well, it was not an inconvenience (other than shipping the items).

We never profited on these transactions, but now that they can't send FF payments, we will have processing fees to pass along to our friends, plus tax liability (or more paperwork) for helping out friends.

As usual, this situation is ALL because OTHER people cheat the system!  

by: Lightning

''The 1099 is killing me, I am giving up 40% off the net.''

Sounds like someone hasn't been reporting their sales.  

Now, when faced with actual accountability for sales, can no longer make tax-free profits.  No sympathy here.  

Report your sales, report your expenses, report your net.  Do it right, or don't do it at all.

by: Missingcord.com

So even less reason to use paypal at all. heh