posted on February 24, 2003 07:59:33 PM new
Learning a lot here and just curious if anyone has or will be dropping paypal because it's just getting too risky (not sure if that is the right choice of words). Perhaps complicated is what I am thinking.
posted on February 24, 2003 08:04:27 PM new
unfortunately its so easy to use compare to all the other alternatives out there...
easy for the buyers so... and most buyers use that... about 70% of my sales are from paypal, rough guesstimate.
just gotta becareful using it I guess... chargeback is a regular issue with all merchant accounts, its just paypal kind of handles it worse.
for what I'm selling, I'm pretty safe from fraud, but yeah.
I also dont keep any balance in my paypal account at all. its not a bank, and I will NOT use it like one. (ie: sign up for its debit card, and have the money market account)
posted on February 24, 2003 08:46:45 PM new
same as capyoda. Not much of a chance of a charge back in what I sell and most of my sales are PayPal. I never leave a balance and I have a separate checking accout for ebay to transfer to then I transfer from that to my regular account. The two accounts are not connected.
posted on February 25, 2003 01:46:50 AM new
I continue to use Paypal and use the Debit card on a regular basis. I do not keep a large balance in Paypal (just enough to cover ebay and AW fees). The rest of the balance is quickly withdrawn using the debit card or for purchases.
posted on February 25, 2003 06:00:34 AM new
90% of my sales are from PP. Dropping PP would be shooting myself in the foot. No doubt sales would be lost by buyers preferring the convenience of PP.
posted on February 25, 2003 06:30:41 AM new
I think a big part depends on what you sell, and how you ship your merchandise. For example... I sell mostly small-ticket items (avg sale price around $10.00 + 2.50 s/h). If I was to take Paypal... my costs would skyrocket. I'd first have to factor in the Paypal fees (around $0.66 per sale). Then, because most of these items are shipped via first-class mail... I'd have to have them insured (since delivery confirmation isn't available and you need a tracking number w/ Paypal for any sense of seller protection). That would tack on an extra $1.30. So... by accepting Paypal, it would cost me almost an extra $2.00 per sale. (or a 16% total increase!) Since I wouldn't eat that cost myself... I'd have to pass it on to the bidders. By not taking Paypal, I am able to keep my costs lower and underbid my competitors while making more profit.
Now... if you're selling high-ticket items and/or shipping via UPS, or via USPS parcel-post or priority mail (with delivery confirmation available) Paypal might be a different story. Your overall percentage increase would be much lower. You really just need to break down the necessary expenses and figure it out for yourself. If it's costing you more than an extra 10% to take Paypal... I would seriously reconsider taking it. You're likely to retain (or even increase) your customer base if you drop Paypal AND lower your prices by 10%.
posted on February 25, 2003 08:22:21 AM new
eauctionmgnt - You are not thinking this through. First, I use electronic DC on first class mail, and the cost is 13 cents. I've purchased bubble envelopes online for 16 cents each, and use those (as there is a thickness issue for the package) - Even if you were to charge insurance, you don't need to pay for that, and in any case, that would not even qualify since insurance under $50 is not trackable. The question really becomes how many problems do you experience right now with misdirected packages. Even before I started using eDC on everything, it was a very, very small percent. On top of that, if your average sale is $10 or under, the loss would be very small. How much does it cost if you get a bounced check?
I would never consider dropping paypal, too many people pay that way, and enough would probably not bid. As a bidder, I hate writing checks. As a seller, I like the instant payment, and since I accept traditional credit cards via a merchant account, the fees are comparable. It's the cost of doing business...
posted on February 25, 2003 08:33:43 AM new
We accept Paypal and love it. Sure it adds to the cost, but I'd rather lose a little then have to store items in my house for an extra two weeks. I also will purchase items off of eBay only if they accept Paypal, it is the quickest way for me to get WHAT I WANT!
I truly have thought this through quite a bit... although you did bring to light some information I was not aware of. I also use inexpensive bubble mailers. But, my $2.50 s/h charge is quite reasonable and covers other expensives beyond postage and mailers. It is good to know that delivery confirmation is available on first-class parcels. But, I would not be using the on-line postage and electronic confirmation (any perceived savings are off-set by cost of ink and labels). So, it would cost me $0.55 to get the delivery confirmation. This would still bring my additional costs to accept Paypal up to an extra $1.25 or so per item. In my opinion 12.5 % is way too much to pass on to my customers. I did take Paypal in the early stage and noticed no drop in sales when I stopped using their service. I doubt they would bring in any extra revenue.
As for taking checks and not Paypal... well, I've had only 5 bounced checks in my 6+ years on eBay. All of them were made good, plus paid extra for my bank fees. And yes... if I DID take Paypal, I would insist on my bidders paying for tracking. I'm not willing to eat even a $10.00 sale if it is avoidable. (besides $10.00 is my average... I have many items selling for $5.00... and a few sell over $50.00)
I'm not saying that no one should take Paypal... but I am saying you should know your own business and understand the role that Paypal fees play in the inflation of your merchandise price. If you really want some strong data... try doing some test auctions. Run a week worth of your normal inventory WITHOUT accepting Paypal. Lower your prices to reflect the absence of Paypal fees. Then, try running a week WITH accepting Paypal at your normal prices. Compare the differences. It should give you a general indication as to what your market demands (low price vs. fast payment). My market perfers low price. (plus I find that I prefer the mentality of bidders that send a check... people who send Paypal payments seem to be too impatient and expect their item to arrive the day after their payment was sent). Just my thoughts on the subject!
posted on February 25, 2003 11:46:29 AM new
i dont sell alot (yet) but on the lower volume of sales i do i include the cost of DC via usps and its well worth it, its not an evil addition, its an expected perk from most buyers too, if you use fedex or ups its automatic but the small .55 additional is 'insurance' of a sort for both parties and i think there are few buyers who dont expect and realize that...
dc is available on every kind of usps service i have used... priority, parcel post, first class and even media mail.
posted on February 25, 2003 11:57:14 AM new
I mean if you charge insurance, you can require your customers to pay for it. I don't agree that insurance has to come out of the pocket of the seller.
posted on February 25, 2003 12:27:13 PM new
I don't think sellers that sell low-priced items need to worry about tracking. About 95% of my sales are under $20 and I rarely get DC on them. According to PayPal I've had 1131 verified buyers and, I'd guess that less than 1% had tracking and I haven't had a problem yet.
As far as the PayPal fees go I just bumped up my S&H by 50c.
I haven't found that PayPal payers are impatient. If I do get a where's-my-item email, it's because the post office is slow. If the buyer is impatient, it doesn't seem to matter whether he paid by PayPal or by check.
posted on February 25, 2003 12:48:06 PM new
If I knew I wouldn't lose some bids or sales I'd drop money orders and checks. Yeah PayPal takes a percentage, but it's so much easier and faster to deal with electronic money.
posted on February 25, 2003 12:51:58 PM new
bkmonroe... not providing tracking on ANY item that was paid for through Paypal is just asking for trouble. Any dishonest bidder could notice that tracking wasn't provided, do a chargeback through paypal, and would end up with your item and their money. Meanwhile, you'd be out your item, your money and all the auction fees.
You're also losing money on Paypal fees if you only increased your s/h costs by $0.50. Only items with total payments (bid + s/h) of $7.00 or less would have that low of a Paypal fee. An additional $1.00 charge would most likely be more appropriate.
Granted... you can get impatient customers no matter how they pay. I just feel that the Paypal mentality is (normally) that of instant gratification. They want it fast, fast, fast.
posted on February 25, 2003 01:19:40 PM newnot providing tracking on ANY item that was paid for through Paypal is just asking for trouble
If you're selling $100 items yes, but what if you're selling $10.00 (or less) items. All business play the odds. It's less costly to issue a refund on one in 1,000 shipments instead of purchasing tracking on 1,000 shipments. Does every mail order/internet purchase come to you with a tracking number?
They want it fast, fast, fast.
Yeah, that's why electronic payments are here to stay.
posted on February 25, 2003 02:25:36 PM newbkmonroe... not providing tracking on ANY item that was paid for through Paypal is just asking for trouble. Any dishonest bidder could notice that tracking wasn't provided, do a chargeback through paypal, and would end up with your item and their money. Meanwhile, you'd be out your item, your money and all the auction fees.
And what happens if a dishonest bidder sends you a bad check? You'd be out the item, the money, auctions fees and bank fees. So, why do you accept checks? Simple, because you looked at the risk and figured it was worth it. As did I. I've been selling on Ebay for 6 years, received 6 bad checks, was reimbursed for 5 including bank fees. The one check that I wasn't reimbursed for was for $40 plus $20 bank fees. So, my average yearly cost for check fraud is $10. A risk I'm willing to take in order to accept checks.
In the 3 years I've been accepting PayPal, I've received over 1200 good payments and 0 bad ones. So, my average yearly cost for PayPal fraud is $0. Definitely a risk I'm willing to take.
As a seller of low-priced, I figure I'm a low risk to be scammed. After all, why don't people counterfeit $1 bills? Because, the penalty is the same for making bad $100s. Likewise, why cheat me out of my $10 item when a scammer can just as easily cheat someone else out of their $50 item.
I realize sooner or later I'll be the victim of a petty scammer, but so what? I'll refund their money, be a little POed about it, but it's a risk I'm willing to take. Plus back in their early days PayPal gave me about $150 in referral money for signing up new customers. So, it will be a long while before scammers even cost me the referral money.
You're also losing money on Paypal fees if you only increased your s/h costs by $0.50. Only items with total payments (bid + s/h) of $7.00 or less would have that low of a Paypal fee. An additional $1.00 charge would most likely be more appropriate.
You're overlooking the fact that everybody pays the extra 50c regardless how they pay. So, if I sell 20 $10 items and receive 10 checks and 10 PayPal payments, I've received an extra $10 which works out to $1 per PayPal payment. Also, my original S&H was a little over my actual S&H costs, so that covers some of the PayPal fees. Plus, I think I've received extra bids because I accept PayPal. There's no way I can prove it, but I've passed on other seller's auctions because they don't accept PayPal, so it seems reasonable to assume that others would have passed on mine if I didn't accept PayPal.
Granted... you can get impatient customers no matter how they pay. I just feel that the Paypal mentality is (normally) that of instant gratification. They want it fast, fast, fast.
Maybe, but as I've said I haven't seen any evidence of it.
posted on February 25, 2003 03:11:44 PM new
I haven't dropped it but I did open another bank account just for PayPal. That way I can limit my freezeable funds. On line banking allows me to move the funds quickly from the PayPal only account to my regular one.
posted on February 25, 2003 03:19:00 PM new
bkmonroe,
I'm not trying to convince anyone else not to take Paypal... but it seems like you're not quite getting some of my posts.
1) If someone passes me a bad check, I CAN do something about it. It is a crime to pass bad checks, and police reports can be filed... as well as mail fraud charges pursued. Fortunately, I have not had to do any of those things. If someone does a charge back through Paypal... there is NOTHING a seller can do. (if they didn't get the tracking.... which is a main reason why costs go up if you accept Paypal and play by their rules)
2) You're right about looking at the ratio of Paypal payments vs. other forms of payments. That is a logical way of adjusting your total increases for s/h. But again... I doubt that $0.50 actually covers it. But, a good businessman will crunch the numbers and make sure.
3) I've never heard of a Paypal customer saying "feel free to wait to ship until my payment clears". I DO however get that all the time with my check payers (although I do not require that payment be held). I honestly just think there IS a different mentality.
Bottom line is that Paypal is a service that you pay for. You need to carefully scrutinize your business model, maker sure you are noting ALL the additional costs, and then make a decision as to whether or not it is beneficial. For me... it just isn't. My customers seem to agree. I've had a few contact me after the auction to see if I take Paypal... but when they find out I don't, I always get payment in another form. Many of those also become repeat customers. All I'm saying is build your business model to meet the demands of your clientel while ensuring a good return of investment for yourself.
posted on February 25, 2003 04:16:37 PM new1) If someone passes me a bad check, I CAN do something about it. It is a crime to pass bad checks, and police reports can be filed... as well as mail fraud charges pursued. Fortunately, I have not had to do any of those things. If someone does a charge back through Paypal... there is NOTHING a seller can do. (if they didn't get the tracking.... which is a main reason why costs go up if you accept Paypal and play by their rules)
Sure, you can do all that, but realistically how much effort are you or the police going to put into a $10 bad check. Basically, if someone scams you out of $10 whether by PayPal or by check, you're going to be out $10 plus various fees.
My experience shows that using PayPal without tracking for low-priced items isn't any riskier than accepting checks.
My customers seem to agree. I've had a few contact me after the auction to see if I take Paypal... but when they find out I don't, I always get payment in another form. Many of those also become repeat customers.
Sure, a lot of people who prefer to pay by PayPal will pay by an alternate means. I'm the same way in many cases. The more I want an item - the more hoops I'm willing to jump through to get it. But what about those borderline wants? How many people have passed on your auctions because you don't accept PayPal and didn't ask you about it?
posted on February 25, 2003 06:19:50 PM new
bkmunroe,
If Paypal works for you... Great! It just doesn't for me. I just hope that everyone is aware of the risks and costs associated with using Paypal. If you feel comfortable incorporating that into your business plan and feel that it will make you more money, you should certainly use their service. Me, I'll stick with convential methods that hold less risk and higher profits for my items.
posted on February 25, 2003 06:55:58 PM new
I LOVE P/P. I have used it since it started. I use the debit card for expenses directly attributed to my selling expenses. When it reaches $500.00 I transfer at least $400.00 to my business acct. I have never in 4 yrsa. had a problem with P/P. I will keep on using it as long as I get fair treatment from P/P.
posted on February 26, 2003 07:08:39 PM new
eauctionmgnt: You are incorrect. Delivery
Confirmation is available for Priority Mail
(which is First Class weighing 13.1 ounces
or more), First Class, Parcel Post and Media
Mail. I know, because I recently had to
raise my shipping charges to reflect DC on
all packages. 80% of my customers pay via
PayPal, so the other 20% are paying for a
service they don't need, but I couldn't do
it any other way (per eBay policies). I
have also always offered Insurance with a
Return Receipt (since insurance alone does
not require a signature) as an option.
ADDING: Also you need an ONLINE tracking
number and Insurance does NOT qualify! I
know because I called and talked to a PayPal
Supervisor to be sure. DC is the only
method the USPS provides that PayPal accepts!
---
"Cannot say. Saying, I would know. Do not
know, so cannot say". -- Zathras (Babylon 5)
[ edited by zathras11 on Feb 26, 2003 07:13 PM ]
posted on February 26, 2003 07:11:20 PM new
I heard that eDC is not viewed the same as
regular green slip DC by PayPal. Anyone?
It would be cheaper for my customers. I just
went and added $0.55 to each shipping charge
in my auction templates and said DC was now
included in the total. Free for Priority
Mail and $0.13 for all other methods would
cut $0.42 off those totals...
---
"Cannot say. Saying, I would know. Do not
know, so cannot say". -- Zathras (Babylon 5)
posted on February 28, 2003 08:53:17 AM new
I don't think the true cost of ink for printing one page and one label comes out to more than 42 cents - if it is, you need to do some shopping around for your office products.
I use the E/DC on all items that meet the 3/4" thick qualification - any items smaller than that, the risk of refund is small enough I don't bother.
Never had a chargeback or reversal in over 3 years.
E/DC has a 99% scan rate at delivery - for me, that's very good - and with a delivery scan, you've met the SPP requirements.
The only question that has never been resolved for me is if the item shows in the database as shipped, or received notice of shipment that I can back up with paper documentation from the PO, but no delivery scan, does it meet the requirement.
Eventually I'll have to have a "test case" I guess, to find out for sure.
