For a seller, how does PayPal (fees) work?

[Jason]

Hi guys,
I've not sold something on ebay for a very long time now, and thus not received funds by PayPal for ages. Can someone give a quick rundown of how PayPal works for eBay and non-eBay purchases, in regards to fees? For example, if an item is sold outside eBay for $100, and that amount is transferred to the seller, PP obviously will want their cut, and take some of that $100, yes?

The reason I ask is that I've purchased something outside of eBay, and the guy asked for the funds to be sent as a 'gift' rather than for goods, otherwise - it was claimed - PP would take a larger percentage of the funds transferred. Since I've dealt with him a few times before, and he has been helpful in the past, I agreed to this. In hindsight, that may not be the brightest idea... perhaps I should have offered to cover his PP fees and paid for as 'goods'.

Unfortunately trouble is brewing over this transaction, since he spun a story that he sent the parcel with tracking, but refused to give tracking number, then claimed USPS returned the package as 'address not known' (he'd sent three previous packages to the very same address... and returned in a week? It wouldn't have even left the USA within that time, how would USPS know within that timeframe that an address in Australia is invalid?) - and has now clammed up, no communication other than a quick "bad snow storms here, too busy to do anything". Giving him the benefit of the doubt for the moment, but I do find the pattern of events suspicious...

 

[ciddu]

My experience is about how it works here, on PP/ebay Italy, but the rules should be the same everywhere.
As far as I remember, PP works the same way and takes the same fee/percentage for ebay or not-ebay sales, which should be like 3,5% plus a fixed fee for every transaction (maybe the % is higher if it requires to convert money to a different currency ).
The difference between sales and gifts, at least here, is that gifts are almost free of charge - or with a lower fee - within the same state or currency... and sending money as "gift" don't get e you any buyer protection , since you're not buying anything.
You may want to check Paypal website about all the kind of protection you can have in such a situation, like chrgebacks or something... I never sent money as "gift", so I really don't know all the details about it..
Let's hope everything will turn out alright!

 

[Peter Graham]

Jason. I hope this works out for you but it doesn't sound good. The fact that he refused to give a tracking number is very ominous. Did he give a reason for refusing ?

 

[ciddu]

I just checked - PP fees on money transfer to different countries seem to be actually higher than the fees for sales payments.
This definitely doesn't sound good. Let's hope for the best.

 

[Jeff M]

I've had a couple of sellers tell me to send them PayPal payments as "gifts" to avoid the PayPal fees.
That does not get rid of the fees.
What PayPal does is it charges the fee to the BUYER rather than the seller.

 

[Skip]

Definately something screwy going on, might be worth advising pp of what has happened or if they can stop the payment due to suspicious circumstances

 

[asiamiles]

I've had a couple of sellers tell me to send them PayPal payments as "gifts" to avoid the PayPal fees.
That does not get rid of the fees.
What PayPal does is it charges the fee to the BUYER rather than the seller.

This is NOT correct. The fee for sending money as a gift is minimal, say $1 rather than $15 (depending on the amount sent), and may be paid by either party. I often request this if the buyer has purchased from me before and therefore trusts me.

If you've dealt with the guy before and he's come through, then it sounds like that for some reason (he forgot, couldn't find a suitable box, couldn't be bothered to make a long trip to the PO in bad weather etc.) he hasn't shipped your jacket and didn't want to admit it, rather than he's trying to rip you off.

 

[bretron]

Hey Miles, welcome back!

 

[bretron]

eBay fees 10% Paypal fees 4% if you get someone to send you a gift payment and they are sending money from their bank account or pp balance 0% otherwise the 4% fee goes to the guy receiving the "gift"

I'll tell ya, as a buyer that 4% buys a hell of a lot of piece of mind... That said I have been successful as a buyer to convince Paypal to open a dispute against a seller even though I sent the money as a gift. Sometimes persistence pays off, but it can be exhausting as s#!t

 

[Rutger]

Outside of ebay I pay as a gift all the time. Buyer receives the exact amount agreed upon at the time of sale, I swallow the extra costs of paypal, which, as mentioned before, is a much lower percentage than the percentage for a pay pal sale.
I always insist on have the expensive shipments sent registered and trackable, even if I always ask them to undervalue the goods for customs charge purposes. The insurance risk I consider acceptable, I sure as hell want to be able to track at any given moment the whereabouts of that what I paid for.
The first time I sold something and was paid through paypal I got hit big time, because the buyer didn't pay the costs and sent the money as a payment for goods, it was a 450 GBP deal, and exchange rates are not favourable either. Lesson learnt the hard way.

 

[Jason]

A happy ending to this saga, the article arrived the other day so I guess the sender had just forgotten to post it initially and spun a yarn to cover the delay. Thanks everyone for the explanations.