How Paypal charges fees, and how to calculate them easily

Discussion in 'Items For Sale or Trade' started by Roger Semerad, Jul 28, 2012.

  1. Roger Semerad

    Roger Semerad TFW2005 Supporter

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    When using Paypal, a lot of people like to use the “gift” option to circumvent their fees, and that’s fine, but doing this takes away your ability to make a claim with Paypal. This is one of the best reasons to use them in the first place. There is a problem with calculating the fees, but this post will tell you how to do that easily.

    When you pay someone with Paypal, it is the seller, not you, who gets charged. You can find the current rates here Paypal fees. Note that the fee is higher for foreign transactions. As of 7/28/12 the fees are 2.9% + 0.30 cents for domestic transactions, and 3.9% + 0.30 cents for foreign transactions.

    If you want to pay the seller enough money to cover the fee, you can’t simply take the percentage rate and add 30 cents to it however. Because Paypal’s fee will now take the percentage off of the now higher sum. The difference will not be high, but the seller would have every right to be upset over getting short-changed. Especially if they’re selling at cost.

    That is what this app is for: Paypal fee calculator

    A lot of what you see you won’t need to bother with. Here is what you do, under options put in your country of origin, the currency that you have and the currency that you want to pay the seller, and in “type of payment” put in either “purchase payment domestic” for transactions in your own country and “purchase payment cross-borders” for everywhere else. Skip the parts called “your monthly sales volume”, that’s for businesses that have a large volume of sales. If you qualified for that, you probably wouldn’t need this thread.

    Then in the part called “Reverse Paypal fee calculator” in “to receive this amount after fees” put in the amount the seller is asking for. Note that you can do this as a seller in order to come up with the right amount to charge someone in order to get the amount you really want (just make sure the buyer is aware of what your doing and they label the transaction as a purchase in paypal).

    There you go. An easy way to pay someone with Paypal correctly.


     
  2. Autobot City Comics 2008

    Autobot City Comics 2008 Drama Geek

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    do u have anything for sell or trade if not then u posted this in the wrong place
     
  3. Roger Semerad

    Roger Semerad TFW2005 Supporter

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    Being tips for buying/selling, this seems to be the most relevant place. It's also consistent with the sticky Postal tips (I don't think this will be useful enough to sticky, but still).

    The only other place I can think to put it would be Non-transformers General.
     
    Last edited: Jul 28, 2012
  4. Autobot Optimus

    Autobot Optimus Autobot Commander

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    I think this is a very helpful post and may very well deserve to be sticky-fied! Maybe even in both For Sale and Trade AND in Wants!
     
  5. daimchoc

    daimchoc Well-Known Member

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  6. Roger Semerad

    Roger Semerad TFW2005 Supporter

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  7. FCatCH76

    FCatCH76 Autobot

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    either way, thanks for taking the time to explain this! I go through this with buyers frequently.
     
  8. jjtitus

    jjtitus Well-Known Member

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    Your calculations are wrong. All you have to do is take 100.30*1.029 which equals 103.20. There's no reason to divide, it gives you a slightly off answer.
     
  9. Roger Semerad

    Roger Semerad TFW2005 Supporter

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    103.2 x .029 = 2.99
    2.99 + .3 = 3.29
    103.2 - 3.29 = 99.91

    nope, you underpaid by 9 cents
     
  10. reflector7

    reflector7 Banned

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    Paypal fees are not complicated. It is simply the buying price times .029, then add the buying price back to the total. Ex. $15 x .029 = .44+15.00= 15.44 + .30= 15.74

    I think the formula above is way too complicated. Mine is alot simpler.

    And some of you are factoring the .30 in with the .029 rate and that is not how it works. You add the .30 after the % multipler.
     
  11. trdkamuri51o

    trdkamuri51o Well-Known Member

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    please sticky this.. though it should simply be about 3.3 percent overall for PP fees just making the effort for the forum is worth while..

    thanks OP... would Thumb up if they had it on this forum
     
  12. Roger Semerad

    Roger Semerad TFW2005 Supporter

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    15.74 * .029 = .46
    .46 + .3 = .76
    15.74 - .76 = 14.98
     
  13. jjtitus

    jjtitus Well-Known Member

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    Well, I was using what the op said about adding the $0.39 before calculating. You just have to take the selling price times 1.029 which automatically adds the selling price back in. Multiplying by 1.033 will get what the original post got. I'm a bit confused now whether it's 2.9% or 3.3%?
     
  14. TrueNomadSkies

    TrueNomadSkies Airachnid's ratservant

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    Roger Semerad is an amazing person for taking the time to figure this out, but its still much too complicated for me to understand or really even follow haha.

    That's why as a seller, I simply calculate my immediate expense first, which is basically what I paid for the toy including tax. After that, I'll figure out roughly what I'll lose on fees by subtracking 3% of that amount & then subtracting 30 cents from the new amount. Once I do that, I can add a couple of bucks to my asking price to account for the Paypal related expenses I'm expecting to have taken & I'm good to go. When it comes to overhead such as packing materials (tape, bubblewrap, etc), I tend to spread that out evenly over everything or mentally take note of something I make 5 bucks on being an even break in the end couse I'm lazy in the accounting department. Tape is like 5 bucks for a few rolls that last a few sales, half the bubblewrap I have is from things I've revived, news paper is free, and so are boxes because I get cardboard from dollar stores & make whatever size I need if I don't get lucky with selection.

    Also, and while gas is usually a factor for people, it really isn't something I think about when it comes to toy sales because my postal outlet is only about 10 minutes away & because I usually go grocery shopping after dropping things off. Also, even if I need to pick something up in the city, I can usually do that on my way home from work which I spend quite a bit of gas going, so I consider that as a work/commute expense more than anything.



    ... then as a buyer, I honestly don't feel that its my responsibility to do all the heavy math for the seller's expenses unless I'm buying stuff at cost, so I'll either pay the amount I'm quoted &/or add a little extra to cover fees if I know that I'm getting a good deal or whatever. If I end up overpaying by a few cents then I just chalk it up to middlemen taking their sneaky cut, and if we make a mistake & the person ends up losing money, then we can always adjust afterwards.
     
  15. reflector7

    reflector7 Banned

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    What? No, its not. The formula is 2.9% of the buying price plus a .30 transaction fee. The .30 is not added to the purchase price because it is a different class of fee. A 1.00 transaction would have a .03 percentage fee plus .30, so 1.33 total. A $100 transaction would have 2.90 fee plus .30 so $103.20 total. The formula is expressed as this (pp*.029)+.30=total, NOT (pp+.30).029

    Copied from paypal below

    Small Fee - PayPal fees mainly apply to sellers, who pay a 2.9% transaction fee on the total sale amount plus a $0.30 fee per transaction. There are some exceptions, listed below. If you have a business, see PayPal Merchant Fees for discounted rates and other pricing info.
     
  16. jbz

    jbz Well-Known Member

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    why not just send as "gift" and then no fees for either side? well, no fees if your (sender) PayPal account is funded or attached to your bank account. Gifting from a credit card will have fees of course
     
  17. daimchoc

    daimchoc Well-Known Member

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    True. Though if you really want to be safe, in case the buyer or the seller stiffs you, then you have a recourse.
     
  18. bigkid24

    bigkid24 Well-Known Member

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    Sale price plus .30 then divide by .971 to get to the amount needed to cover fees.

    Its simple algebra.
     
  19. jbz

    jbz Well-Known Member

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    ah yes. That is a good point. Gift = no protection....
     
  20. trdkamuri51o

    trdkamuri51o Well-Known Member

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    thats why i try to deal with people who have decent ratings.. its a gamble but i try to think MOST people are good people here and arent here to screw someone (or in my case i try to buy locally)
     

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