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%addition for Paypal & Credit Cards


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I am close to launching a new store and I am thinking about adding Paypal as well as credit cards. Accepting CC & PP costs me approximately 4% commission.

 

I also offer Nochex as a payment method which costs a maximum of 1%.

 

I don't have different prices for CC&PP payments but it occurs to me that I am overcharging people who pay by Nochex or send us cash or a cheque.

 

I am wondering what people think about charging an extra 3 or 4% for people who want to use PP or CC?

 

Does anyone on these forums make such and extra charge?

 

Does anyone know of a relatively simple way of adding a percentage to the final price if a certain payment method is chosen? I know it could be hard coded but I would prefer a more elegant solution if one exists.

 

I've searched the forums for the answer to this and didn't find anything - so if something exists please excuse me for not seeing it!!

 

What do you think about reducing prices overall and then adding a surcharge for certain types of payment?

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It used to be but it isn't prohibited by Paypal or the bank I use.

 

Having said that, Paypal are running a big campaign to get Ebay users not to add extra for using their service.

 

But as I said in the original post - why should people who are paying with a low cost method, subsidise the CC&PP users?

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Visa and Mastercard don't allow you to charge an additional fee to your customers for paying by that method... although they don't hesitate to charge you, and then gouge the consumer for interest (wish I owned a CC company, what a cash cow).

 

Paypal, to the best of my knowledge, do not have any issues with this.

 

An easy way around this is to add a 4% handling charge to each product... (I sell digital products, so now shipping, I just add the costs into my prices).

 

Just thought I'd offer up an idea.

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It isn't officially allowed by most credit cards. I told American Express on phone that I would add additional 1.5% to American Express orders unless they lowered their rates to Visa/MC/Discover level. The rep said that it would violate my agreement with them. So, I don't accept Amer Express now.

 

Chinese food places somehow get away with it by requiring $10 minimum order for credit card purchases. I believe that this violates agreement too.

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In the US it is illegal in most states to charge a surcharge for various types of payments.

 

I did run across a store that offered a "discount" to money order users. That doesn't not violate agreements, or laws. Like mentioned before, I added a 4% handling fee to cover it.

 

Personally I think the laws and the agreement not to charge extra is total crap. The CC companies know they people would pay via cash/check then. And the CC companies have manilupated laws in many states to support them.

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I don't think charging higher prices for certain payments is illegal by states/federal government. It is just a violation of agreement between credit card companies.

 

If more people want to use American express, I'll probably put in something where it automatically adds a handling fee or something for American Express orders. The chances of getting caught by them are probably pretty slim. However, if they do, they reserve the right to cancel service with them.

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Thanks for all the interesting thoughts.

 

Tommygunner's idea of offering a discount for non CC or PP payments is another way round the problem but it doesn't look as good when a customer looks the prices in your shop UNLESS there is a simple way of applying a discount that people can see easily when they look at each product.

 

The reason for the original question is that I am in an area where prices are cut throat - computer components.

 

I would like to be able to show the best possible price in my shop. Of course I could do this in the product description but 99% of customers will look at the front page dscription which shows only the product price, therefore I feel the %addition will show prices in the best light.

 

So my original question still stands - is there a way of adding a percentage to the price according to the payment method selected?

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