Ron Schenone

PayPal Increased Fees Hoping No One Would Notice

Posted by on Aug 21, 2009 | One Comment

It seems that PayPal has quietly increased their fees in order to increase their revenue flow. The added fee hikes took place in June, but were not immediately known until after PayPal starting charging for the increase. But according to this article there is more to this besides higher fees.

Over at ars technica they state the following information:

What PayPal failed to do was inform users of the fact that any transfer having to do with goods or services will be charged the 3¢ + 2.9 percent fee no matter who or where it’s coming from. This includes payments sent from personal accounts as well as payments made after someone has sent you a request for payment (even if that request has nothing to do with goods or services).

For example, a personal account sending another personal account money for a one-time payment for, say, mowing your lawn was not previously charged any fees on either side, but is now charged the usual transaction fee (the sender gets to decide who pays). The only way to avoid this is by selecting “gift” when making the transfer—something you can’t do if you’re following through on a purchase or invoice from someone. And, if you fall into this category (which many people do), it’s likely that you had no idea about the changes until just now.

Well, it appears as if the lack of a “huge formal communication” has now begun to anger users, as it comes off as a shady way to hide the addition of fees to mass numbers of transactions. Sure, users would have been irritated either way, but doesn’t PayPal know that the way to handle bad PR is to be the first one to control the message? People value openness and transparency—especially when bad news is involved. Now, those controlling the message are other, ticked off users, and that won’t be an easy one to clean up after.

It is interesting how PayPal thought that no one would notice. In this day and age when corporate America is coming under fire for incompetence, it is good to see that PayPal is playing follow the leader. LOL

Comments welcome.

Source.

  • Carl

    Starting August 2010
    • A chargeback will cost $20. (It was $10.) If you’re in our PayPal Preferred program, you won’t pay chargeback fees for your eBay transactions.
    • For full refunds, we’ll continue to refund the percentage (e.g. 2.9%) on each transaction but we’ll retain the fixed transaction fee. (Typically $0.30.) Pricing for partial refunds is not changing.

    This is the first time we’ve increased fees for these services, and our prices remain very competitive. You might see lower rates advertised elsewhere, but keep in mind that with PayPal, there are no extra costs, monthly minimums, downgrade penalties, or cancellation charges. To learn more about the hidden fees some companies charge, read this article from Inc. magazine.

    What does all this mean? For refund on someones purchase they still keep money?! That is wrong. I also hate the large fee to receive money for an item sold a 500 dallor item sold costed me $16 in paypal fees, add the ebay fee of about 12% and what is the use of using internet to sell things anymore, We need a new payment system without the greed