Auction Houses that accept PayPal and/or credit cards

[4815162342]

How is giving a discount for other forms of payment besides PayPal/cc any different than raising the price for accepting PayPal/cc?

[bnorth]

Originally Posted by 4815162342

How is giving a discount for other forms of payment besides PayPal/cc any different than raising the price for accepting PayPal/cc?

In reality there is no difference but it makes it legal. There are a few places around here that only accept a CC if you spend over $20. Most hate it but as a business owner I understand, those small purchases will kill your profit margin after CC fees.

[Leon]

Paypal or CC charge about 3% to take their service. In my small auction company we only charge a total of 12.5% fees. If we took those payment options it would take up to 25% of our profit. That is the main reason we don't take it. The other is charge backs.....That/they would really suck.

As someone who took credit cards for the last 9 yrs, to the tune of about 700k per year in cc's, I can tell you that those services rape you and they suck bad to deal with. As a consumer I love them...but as a merchant, no way.

If I was in a business that had to take them I would......but did I mention I hate Merchant Services (the cc part of companies)....?

[4815162342]

Understandable Leon. What if you could raise the BP to 16% for PayPal/cc customers, and keep it at 12.5 for check/money order customers? Or is the hassle (chargebacks, etc) just too much?

[D. Bergin]

I can understand auction houses working on a commission, not wanting to take CC's for fear of chargebacks.

Especially since, a chargeback would usually happen after a consignor has already been paid.

Take Leon for example, with his 12.5% buyers premium. He sells a $500 card at auction. He collects $562.50 from the buyer. He pays the consignor their 500 bucks. Two months later he gets a chargeback for the full $562.50 amount.

He's now out $1062.50. That's a rough cost of doing business.

I just got chargeback notice from Paypal for an Ebay sale from 2 months ago, for about $36 bucks. Item shows delivered on November 29th. They went through their credit card company and claimed "Unauthorized Use".

If it holds up, they don't even need to send the item back. Just claim somebody else used their card, even though it was delivered to their Paypal address.

[Leon]

Originally Posted by 4815162342

Understandable Leon. What if you could raise the BP to 16% for PayPal/cc customers, and keep it at 12.5 for check/money order customers? Or is the hassle (chargebacks, etc) just too much?

I am a partner in a company and my partner is more against raising any fees than I am "for" taking other payment options. I admit I like paying with Paypal....but given a choice of paypal or saving 3%, just tell me where to send the check . There are a few reasons we don't take those pay options and I think I stated them pretty well, but it's a fair question to ask.

In our new world of instant gratification we are still old school and happy. We have discussed it many times but never came to the conclusion of doing it.

[vintagetoppsguy]

Originally Posted by Leon

I am a partner in a company and my partner is more against raising any fees than I am "for" taking other payment options. I admit I like paying with Paypal....but given a choice of paypal or saving 3%, just tell me where to send the check . There are a few reasons we don't take those pay options and I think I stated them pretty well, but it's a fair question to ask.

In our new world of instant gratification we are still old school and happy. We have discussed it many times but never came to the conclusion of doing it.

If you could only get rid of that sales tax for us Texas residents.

[Leon]

Originally Posted by vintagetoppsguy

If you could only get rid of that sales tax for us Texas residents.

On a big enough item a cousin could buy it from out of state....if they collected those kind of items of course . It would only make sense on a larger ticket item though..

[I Only Smoke 4 the Cards]

Originally Posted by bnorth

In reality there is no difference but it makes it legal. There are a few places around here that only accept a CC if you spend over $20.

CC companies generally prohibit this discrimination. However, what I find it funny is that my card works just fine when I tell them that's all I have and start to walk out.

[bnorth]

Originally Posted by I Only Smoke 4 the Cards

CC companies generally prohibit this discrimination. However, what I find it funny is that my card works just fine when I tell them that's all I have and start to walk out.

That is because the person behind the counter is being nice to you. They are just an employee and losing money on your small purchase means nothing to them.

[I Only Smoke 4 the Cards]

Originally Posted by bnorth

That is because the person behind the counter is being nice to you. They are just an employee and losing money on your small purchase means nothing to them.

The store doesn't lose money on the transaction, it just makes less of a profit. Profit margins on a CC purchase may be smaller than with cash but it is larger than no sale at all.

Let me give an example to illustrate the point. My wife and I walked over to a local Chinese restaurant to get some take out. The meal my wanted came with shrimp fried rice but she prefers chicken fried rice. The store refused to substitute despite the fact that I offered to pay more to do so. I explained to the manager that we were about to order $30 worth of food. However, if they would not work with me on the substitution, for which I would pay more, then I was going to cancel my order and leave. They stuck by their guns and I went elsewhere.

As a pragmatist I don't understand their decision. They gave away a sale despite the fact that I was willing to pay more. The profit margin of 0 was worth more than a smaller (but not really) one.

[honus94566]

It's definitely the risk of chargebacks. There are way too many shady people in this hobby, that's just a fact.

When a person charges back a transaction, the original seller will lose. It is that simple. They may have to show tracking that the item was returned, but the credit card companies ALWAYS side with the buyers. PayPal is a bit better, as their seller protection is significantly more than credit card companies offer directly.

As a merchant (in a different industry) that accepts credit cards, paypal, and is intimately acquainted with disputes and chargebacks, I do not blame these auction houses one bit for not accepting cards or paypal.

Factoring in what they have to "gain" by offering it as a payment method, and what they potentially have to "lose", it's a sound business decision.

That being said, I love how LOTG accepts paypal.

[Leon]

Originally Posted by honus94566

It's definitely the risk of chargebacks. There are way too many shady people in this hobby, that's just a fact.

When a person charges back a transaction, the original seller will lose. It is that simple. They may have to show tracking that the item was returned, but the credit card companies ALWAYS side with the buyers. PayPal is a bit better, as their seller protection is significantly more than credit card companies offer directly.

As a merchant (in a different industry) that accepts credit cards, paypal, and is intimately acquainted with disputes and chargebacks, I do not blame these auction houses one bit for not accepting cards or paypal.

Factoring in what they have to "gain" by offering it as a payment method, and what they potentially have to "lose", it's a sound business decision.

That being said, I love how LOTG accepts paypal.

Obviously someone who has dealt with Merchant Services. Have I said recently how much I hate CC companies?

That aside, the story of not losing money on a sale by taking a credit card isn't quite correct. Simple business math says if you make less than 3% GP on a sale AND you take a credit card, you are taking money out of your pocket to pay. That would be a big fat LOSS. And in some businesses, margins can be that slim. If you don't think so just ask a C-Store owner who sells gas.....

Last year, after I sold my restaurants, two months later I got a charge back from Mastercard for almost $80. It came straight out of my bank account because they had a tie in to the account (as is very customary). My restaurants average tab was about $8.25 (cheap food). The next day I closed my bank account and opened a new one. I also had a few other small gotchas too. But after closing it and opening a new one, Since then not one MF'er has taken money out of my account. Live and learn.