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This is something I have been struggling with for a while and can't decide which is the right thing to do.
I'm sure many of us have customers who pay using paypal which is very convenient for both us and the customer, but, the charges for using paypal can be quite high.
I am wondering how others deal with those charges, do you take it as a loss on each bear or do you charge the customer a percentage for using paypal, example..add 4% to the total cost of the bear? (paypal charge 3-5%)
I worked out that on my average priced bear i am losing about £4 on each sale, I don't want to incorporate that into the initial price as it wouldn't be fair on those paying by other methods but on the same hand, i don't want to lose money on each bear sold 
I guess those who manage to get £100's for each bear the loss probably wouldn't be noticed so much but at a lower price it is.
I would love to hear your thoughts on this 
I just take it as a loss Wendi, as in any type of business there are always banking expenses, and for me this as one of them,...I plan once I become a registered business to account for this at end of year tax time, I am sure there is some kind of tax break for banking fees?
Hugs,
Krista
Hi Krista
Thanks for replying I registered as a business a while back but am not really sure how to incorporate this into a tax return, I just took it as a loss last year, these forms confuse the hell out of me anyway :crackup:
Real Deal BearsI do the same as Krista, though as I am a registered business I can claim the fees at tax time
if I earn enough to put in a tax clame that is 
As the only time I take Paypal is when I sell a bear through my website, I take this as a 'selling fee'. If bears are sold at a fair, then you have to cover the cost of the stall, etc., so to me the fees of paypal are the cost of selling through a website.
When you fill in your tax form, you should only be paying tax on your profit. Therefore, make sure you are only paying tax on the amount you got for the bear after paypal fees have been taken off. You do this by including the fees as a business expense. This doesn't get you your paypal fee back, it just means that you are only paying tax on your actual profit. Sorry - difficult to explain in writing, but I hope this makes sense!! (PM if you are not sure what I mean but would like to know!!! :lol:)
Hope this helps!! 
Creative Design Studio (RKR4CDS)Right, you are only 'losing' money if you had paid $100 on your COGS - cost of goods sold - and the selling price was also $100. Then you'd 'lose money'.
As we are all able to arbitrarily set the price of our products, and we all charge more than just the actual price of COGS, where does any actual 'loss' come in?
Well, if you were to sell the same bear to someone in person as you did online, the 'banking fees - (all of them) would have a different scale, because your CC company takes a cut, PP takes a cut, etc.
But on the balance sheet those are still small compared to the cost of travel & exhibiting at shows.
The ease of reaching thousands times more ppl online has it an extremely small percentage compared to travel. I've been across the States & Canada, into Asia and Europe: believe my - those are huge Expenses!!
I really cannot associate the small amount of fees we pay to list our work on eBay and using Paypal's service (usually lower than one's own CC merchant account would take in fees) to anything worth worrying about. We are exposing the world to our work for a few dollars per item. Even the purchases of the local currency type (in order to have cash when you're doing business there) has a huge bank exchange fee. You pay to 'buy' the other currencies and then pay again to transfer it back into your home currency. Paypal is MUCH less and it all happens seamlessly.
If one sells $10 items, the PP fees might add up to a smaller net profit, but there's no way we get off scot-free! That's just not doing business on a global scale!
Which brings up
I can claim the fees at tax time - if I earn enough to put in a tax claim, that is
In order to be able to use those fees as deductions, there must be income. If outgo is larger than income, it's a moot point!
I don't think I've ever, in 17 years, earned more than it has cost me to create my work. My losses are our deduction to lower our taxes due!
Also, it's illegal (in the US) to charge someone to use their CC for purchases. Paypal is the same I thinbk. One cannot add that fee to a CC purchase if the total is not the price/amount charged someone who pays by check or in cash.
Little Bear GuyI have to agree that the paypal fee's are just part of the cost of doing business, sometimes it's difficult to explain this to some people. I think Bobbie has explained it very well, and I only found out recently that it was illegal to make someone pay that fee.
We were very interested in a bear awhile ago and the artist quoted us a price but then stipulated if we wanted to pay using paypal then we would have to pay that cost as well. We decided not to buy the bear as I didn't feel we should have to pay that fee and explained to her that I felt it was just the cost of doing business. Again the fee was not substantial maybe 30-40.00 but it was the principal of the whole thing. Because of that she lost a sale and it has left a bitter taste in my mouth and I likely will never buy from her because of that one experience.
big hugs
Shane
Sunnie BearsPaypal DOES have a policy that you cannot charge the customer for the paypla fees.
I take it on the chin for all fees regarding the sale. I do build such things into the initial price so that I don't have to add anything other than postage on to the cost. The convenience of Paypal outweighs the cost of it in my opinion.
When I do my books this gets added into to my general bank charges and therefore is tax deductable. There would be no point in making bears if there were no profit so I do make sure that it's worth it...it's not just a hobby ...much as I love it I can't justify doing it just to give away my efforts and hard work to others. That may seem a harsh thing to say but the way I see it it is a skill that I have learned, and while my time may not be for as long as others have been doing it, some of the skills I employ are those which I have been using in my other job for 33 years..and those are unique and have taken a long time to perfect.
I have seen on some peoples websites that they add a percentage when credit cards and paypal are used, however I always get a bit annoyed at this as I do believe that it should be worked out to be part of the price. Holiday/travel/ booking companies do it all the time so it can't be illegal here in the UK...but it really annoys me.
To me the price is the price..and that is that...tough as it is I think it's worth the small fee to get the money in straightaway.
In South Africa, it is illegal to add on or charge your customer the % which credit card houses charge you, you have to build this into your own costings and it is out of your own pocket.
If it is found and proved that you charge your customers/clients the % you can have the facility withdrawn.
Thanks so much for all the replies they really helped
I think I was looking at it all wrong looking at it as a loss when it really isn't, thanks again for making it clearer for me 
