Paypal Fees / Hidden fees - learning the hard way

Thread: Paypal Fees / Hidden fees - learning the hard way

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  1. #1
    Member mikeukrainetz's Avatar
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    Paypal Fees / Hidden fees - learning the hard way

    So I just sold three watches and accepted paypal as I have done multiple other times.

    This is the first time my receipt of payment has been over $200.

    I understand paypals fee structure and dont mind eating the cost and not passing it along to the buyer.

    What I didnt understand is having a negative echange going from US dollars to Canadian. I was getting less Canadian dollars than US even though the US dollar is worth more.
    I was baffled to the point I called them this am - WTF?

    Could be the fact Im sick and not thinking straight but I cant find mention on paypal of them adding 2% to the bank rate on currency exchange. "thats what credit cards do" I was told.

    So to make a long story short I priced low for the benefit of others and not sit on them for a long time but in the end I got killed by paypal.

    Between paypal and shipping im out 12% lol.

    Ive never been able to justify passing along the fees but now understand why its done on purchases where they would be significant.

    Lesson learned.

    Thinking maybe my paypal days are numbered.

  2. #2
    Member enkidu's Avatar
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    Re: Paypal Fees / Hidden fees - learning the hard way

    Quote Originally Posted by mikeukrainetz View Post
    Could be the fact Im sick and not thinking straight but I cant find mention on paypal of them adding 2% to the bank rate on currency exchange. "thats what credit cards do" I was told.
    Not sure where you can go to get the interbank exchange rate anywhere. AFAIK, every retail financial institution charges their retail customers this amount to convert currencies; many credit cards charge more. If you do a lot of buying and selling, I'd advise you to carry a usd balance, that way you can purchase something using usd without any of the exchange rate nonsense.

    The convenience, speed, and (marginal) additional security of using PayPal makes them a worthy partner in my book.
    Last edited by enkidu; November 26th, 2010 at 09:11. Reason: Spelling correction s/inteerbank/interbank/
    Nomos Orion Anthracite; Destro watches: Ω "Great White" GMT, MKII Blackwater, Sinn EZM1 LE, IWC 3536-001, MKII Kingston, Precista Speedbird I, Casio MR-G120, Casio GW-5000, Sinn EZM2; Former Watches: Corvus Bradley

  3. #3
    Moderator sixtysix's Avatar
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    Re: Paypal Fees / Hidden fees - learning the hard way

    I noticed that PayPal has a higher exchange for international deals a while back......you can add 10% for international deals to make up the difference.
    Later, Gary




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  5. #4
    Member Sodiac's Avatar
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    Re: Paypal Fees / Hidden fees - learning the hard way

    When an buyer outside the U.S. where I live makes an offer, I first carefully weigh the package and check postage rates, then calculate PayPal fees and currency differences and fees, then quote a price. I subtract out what it would have cost to ship it inside the U.S., so I think that's about as fair as can get.

    However, I always make them pay via PayPal in USD so they have the burden of the exchange rates, not me, did you do that?
    Last edited by Sodiac; November 25th, 2010 at 21:50.

    Sodiac
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  6. #5
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    Re: Paypal Fees / Hidden fees - learning the hard way

    It's pretty standard anywhere you go to buy or sell foreign currency they will add a few "pip points" as they are called to the conversion rate, usually about a 2-3% premium. I worked at a bank and they have an employee rate for buying/selling USD and its about a 3 cent difference per dollar from the customer rate.

  7. #6
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    Re: Paypal Fees / Hidden fees - learning the hard way

    That's why a lot of guys sell pay pal and shipping included in their own country (typically conus) and negotiate everywhere else. It's fair and easy.

  8. #7
    Member hpark21's Avatar
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    Re: Paypal Fees / Hidden fees - learning the hard way

    Interest rate that you see quoted on Yahoo and others are for someone who is converting upwards of Millions of $$.
    Retail customers get charged few % points higher.

    However, as a seller, you should have demanded to be paid on USD though that way, the buyer will eat the conversion fee.
    Chronic flipper...


  9. #8
    Omega Forum Moderator emmanuelgoldstein's Avatar
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    Re: Paypal Fees / Hidden fees - learning the hard way

    I seem to be a minority on the forums. I've had nothing but great transactions with PayPal. I wouldn't do an online transaction any other way. I stick to what Sodiac said when I am selling outside the country. I haven't run into any losses that I haven't calculated. I usually note in my sales posts that transactions outside the US will be a bit more.
    “Education is the inculcation of the incomprehensible into the indifferent by the incompetent”

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  10. #9
    Moderator Public Forum John MS's Avatar
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    Re: Paypal Fees / Hidden fees - learning the hard way

    Quote Originally Posted by mikeukrainetz View Post
    So I just sold three watches and accepted paypal as I have done multiple other times.

    This is the first time my receipt of payment has been over $200.

    I understand paypals fee structure and dont mind eating the cost and not passing it along to the buyer.

    What I didnt understand is having a negative echange going from US dollars to Canadian. I was getting less Canadian dollars than US even though the US dollar is worth more.
    I was baffled to the point I called them this am - WTF?

    Could be the fact Im sick and not thinking straight but I cant find mention on paypal of them adding 2% to the bank rate on currency exchange. "thats what credit cards do" I was told.

    So to make a long story short I priced low for the benefit of others and not sit on them for a long time but in the end I got killed by paypal.

    Between paypal and shipping im out 12% lol.

    Ive never been able to justify passing along the fees but now understand why its done on purchases where they would be significant.

    Lesson learned.

    Thinking maybe my paypal days are numbered.
    I don't understand the "negative" rate you mention. You are paying whatever the going exchange rate is through paypal. If the is of concern then you have two choices:
    1. Continue to price your items in USD but factor in the exchange rate.
    2. Price your watches in canadian dollars.

  11. #10
    Member lysanderxiii's Avatar
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    Re: Paypal Fees / Hidden fees - learning the hard way

    Hidden? I don't think so.

    You could actually read the user agreement and the page on fees....
    familiaritas parit contemptum; raritate admiratione wins.- Lucius Apuleius
    est necessry, accurate ad secundo? - Lysander magna
    iustum est horologium - Obscurus Genius

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