Why does PayPal take a cut of the shipping portion of the payment?

[TRAILDUSTER]

I can't understand why PayPal is taking a cut of the shipping portion of the payment sent to me for an Ebay item I sold. It is fair to take a cut of the purchase price but taking a portion of the shipping is stealing from me. It is costing me over $500 to ship an item to Norway and Paypal has taken over 30$ from the total payment I received. What is up with this?

[PayPal_Adrian]

Welcome to the boards!

The PayPal fee represents the cost to move the funds in their entirety - for which PayPal itself must pay a processing fee. 

The processing fees that PayPal is charged are based upon the amount of the payment moved plus a base fee.  This is reflected in the fees that you, as the seller, pay to have the funds processed for you by PayPal. 

As the fees are based on the payment amount that is moved, not how the purchase is broken down (purchase price/shipping/tax/insurance), the payment fee that PayPal charges is also based upon the amount of funds that are moved.

Hope this helps,

Adrian

[frankmarson]

Maybe you should note that in the beginning, Paypal did not charge a fee for shipping, only on the product price for something on Ebay.  Also if everyone really looks at it they are being charged the fees 2 times (3 if you look deeply into the transaction).  Here is the breakdown of duplication of fee services and remember Paypal and Ebay are the same thing, Ebay owns both:

1.  Fee #1: Ebay takes a listing fee for putting the item on Ebay

2.  Ebay charges a transaction fee.  Currently it is 9%.  When Ebay first started I believe the final transaction fee was 2.25%

3.  Paypal then takes a transaction fee which is 2.9% of the total and a $.30 cent fee per transaction. 

4.  Add these all up 11.9% + $.30 cents + and your  Ebay listing fee. 

5.  In the past you never needed Paypal because a buyer could send the seller a check or money order.  However, as a means to increase profits, Ebay forced sellers to use their secondary ccompany Paypal.  Which in the free market a seller should be able to dictate what form they want their payment to be in:  Cash, Check, Money Order or Paypal

[PayPal_Adrian]

frankmarson,

There definitely are opportunity costs for selling in any market or any medium, whether via eBay, your own website, or another venue.  In many instances, the costs of eBay and/or PayPal fees, in comparison with the numerous benefits, make the cost highly competitive against traditional storefronts or other payment processors. 

While I can't necessarily speak on eBay fees, I can tell you that eBay does not require sellers to accept PayPal - although they do rule out cash, check or money order.  eBay lists more information on accepted payment methods here.

Hope this helps,

Adrian

[sandypurins]

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@frankmarson wrote:

Maybe you should note that in the beginning, Paypal did not charge a fee for shipping, only on the product price for something on Ebay.

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Hi frankmarson,

In the beginning, PayPal didn't charge a payment receiving fee.  When PayPal started charging a fee, the fee was based on the total payment amount received... item price plus shipping charge.

Sandy