However, I never ever charged my clients for the fees and any extra stuff. In my opinion, its not about the few dollars (in most cases). Its about the experience of your client, the experience of satisfaction and working with you.

Just my two cents…

In the UK although against eBay rules it is allowed for other transactions:

4.5 Non discouragement. In representations to your customers or in public communications, you agree not to mischaracterise or disparage PayPal as a payment method. You agree that you will only surcharge for the use of PayPal in compliance with any law applicable to you. You further agree that if you do charge a buyer any form of surcharge that you, and not PayPal, will inform the buyer of the requested charge. PayPal has no liability to any buyer where you have failed to inform the buyer of any surcharge. You acknowledge that if you are permitted to surcharge and your further fail to disclose any form of surcharge to a buyer this may constitute a criminal offence by you.

However, I wanted to point out that no matter how you want to handle credit fees, checks can sometimes be much worse. My company has had clients write large checks that bounced. When you factor in NSF fees, the cost of business delays while waiting to collect, and depending on the client the cost of collecting on a bad check, the 3.9% can start to look very appealing.

What exactly can I call the fee to make it legal? Can I say a “processing fee” for all online payments? My partner seems to think factoring the percentage in would be “hiding” the fees from the client, but I really disagree. Insight anyone?

However, depending on the client and the project, I will calculate what the fee would be and if it is more than a certain amount then I will absorb the cost into my quote. I do not discourage clients from using paypal in any way, which is the point being made in the TOS.

I know this is a slightly older post but I felt compelled to respond since I very recently found myself in the exact situation.

I usually do not accept credit cards for payment. I have several reasons, but they are irrelevant to this post.

But recently I had a client who was overdue for a payment. I had become more than a bit agitated and it was a large sum, which I was specifically counting on for the holidays to buy for my family.

Upon giving her my ultimatum, I caved in and said I’d accept a PayPal payment because I thought this would be an incentive if she could just charge it to her credit card and get it taken care of. She agreed to do it.

When I factored in PayPal’s fees, they were quite high, and that was going to come right out of the money I was already owed. It just didn’t seem right.

So I told her I would need to charge a 3% fee if she wanted to pay by PayPal. Otherwise, she could just send a check, as I’d asked her to do originally.

She actually paid the 3% fee and didn’t even say a word about it.

So in my opinion, it’s completely fair to charge a fee for credit cards because I am providing a convenience to them. If clients want to avoid fees, they can send a check.

Here is another way I’ve rationalized this:

If you’ve ever tried to pay your mortgage with a debit card, or your electric bill with a credit card, you were probably hit with a “transaction fee” for using plastic. Why? Because these companies are doing a service for you and now you owe them money. The pressure is on you to pay up.

On the flip side, if you go to a store and buy a new shirt, you can use plastic and they won’t charge a penny. Why? Because the ball is in your court and they’re trying to make a sell. Besides, the prices are already marked up and that covers the credit card fees. Come on, that shirt didn’t really cost $50 to make.

So when you’re the one providing the service, the ball is in your court and it’s completely fair to charge a fee to accept credit card payments. Remember, you offered the chance to pay by check for free. It’s their choice if they want to use plastic.

Thanks for letting me share my input on this. I’m glad you brought up this topic.

just thought I would throw my hat in and mention Google Checkout…..its much cheaper than paypal and only acts as a transaction handler, i.e the money goes straight from the clients account into yours. The fee starts at 1% (so you could easily absorb the cost) – I see no problem for charging this to the customer, however, its incredibly common amongst most medium to small businesses, heck, most resteraunts, corner shops etc charge for credit card transactions, I agree that the client can choose how to pay, and yes whilst its more convenient for us, its also convenient for them else they wouldnt choose to pay that way?, I gladly pay transaction fees if it means i will get product quicker or can settle a debt asap.

Just a warning, paypal is not covered by full UK (and many other coutries) financial laws as it is not counted as a financial institution like a bank etc and so they can do what they want when the want with your money, even deduct huge sums without telling you why!

check out http://www.paypalsucks.com to read horror stories! (not scare mongering but just want to let you guys know that paypal is far from being an ethical and morally sound company).

Take it easy.

Brad

Originally, before posting this article I used to include 3.5% in the quote / invoice however after reading the feedback left in this article, I have chosen not to show this fee (as it is against PayPal’s TOS) but rather include it into the price as a ‘hidden’ cost – aka just another cost of doing business. I also agree that round numbers look better rather than say $2120.55.

Sean,
Thank you for the link and clarifying PayPal’s TOS.

But if I’m concerned about the fees I’ll just up the invoice a percent or two. Client doesn’t have to know its for the PayPal fees and at the same time it helps me absorb costs.