Paypal Friends and Family

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RedRamen

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I apologize if this is in the wrong section. I wanted this to be seen by marketplace buyers/sellers.

I was looking to buy a new ukulele in the marketplace and noticed some ads want payment through friends and family in Paypal. This is not allowed if you are purchasing/selling goods through Paypal and some people have been fined because of this.

https://www.reddit.com/r/hardwareswap/comments/39uxc0/meta_if_you_accept_paypal_friends_family_as/

Also, under paypal's user guidellines (https://www.paypal.com/us/webapps/mpp/ua/useragreement-full):
You may not use the “send money to a friend or family member” feature in your PayPal account when you are paying for goods and services.

Also, under paypal's guidelines, friends and family is not protected (https://www.paypal.com/us/webapps/mpp/paypal-safety-and-security):
(Emphasis mine)
What’s not covered with PayPal Purchase Protection:
  • Real estate
  • Motorized vehicles
  • Custom-made goods that are significantly not as described
  • Industrial machinery
  • Prepaid cards
  • Items that violate our policies
  • Anything bought in person (not over the internet)
  • Send Money transactions to friends or family
  • Disputes filed more than 180 days after the purchase for item not received and significantly not as described claims
  • Unauthorized transaction claims reported more than 60 days after the transaction date of the transaction
  • Items that were described accurately by the seller

I also see some ads that say pay with friends or family, or else you will pay paypal fees. That is also not allowed in paypal. (https://www.paypal.com/us/webapps/mpp/ua/useragreement-full):
No surcharges

You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method.

I am a member of other music sites and other sites (like talkbass) prohibit asking for paypal friends and family in the classifieds guide. Maybe we should add this to our user guide as well? It ensures that sellers/buyers are protected.

----------------

I am editing this post so that people who are reading this for the first time will understand why I decided to close this thread.

My original intention really was like, "As buyers, please be careful using friends and family because you will not be protected. And as sellers, please be careful using friends and family because you can get a $2500 fine. And maybe we should post a rule so that people are aware of this rule and buyers and sellers can be protected. You know. Cos a lot of people don't read all of the user agreement."

I never imagined people would read it as "You are violating the rules you unethical bastard and you should go to jail and you can rot in hell" or "I am the here to make sure everyone is following the rules or you will feel the wrath of the ukulele gods" or "Ukulele Underground should post the rules and police them so that there are just rules on this forum and no fun. No fun for you!"

So I guess its one of those intent vs reality things.

I just wanted people to understand what it actually means to use the friends and family option and what the consequences of those actions are. And maybe have some language in the suggestions/rules in the marketplace FAQs to help people make their own decisions. Because like other people said, it is not up to me whether you follow the rules or not. I would just hate someone to be scammed as a buyer or have to pay a fee as a seller just because they didn't know. Knowledge is power, and all that.
 
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Booli

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I cannot speak for others, but when I've bought here on UU, I have asked for 'Goods & Services' and added the approx 3% to the price and sent it to the seller.

It is easy to see what the PayPal fees would be via http://thefeecalculator.com/

Maybe folks don't know or don't care to learn about PayPal's policies, many of which are hostile to both buyer and seller.
 

buddhuu

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Interesting point. Thanks for posting.

We'll mull it over and, if it seems appropriate, we may post a formal rule or notice. This isn't something I decide alone so please bear with us.
 

mikelz777

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If I were to purchase a uke from someone I would never send funds via friends and family just so the seller can dodge the fees. If something were to go wrong or the item didn't live up to expectations then I would be without recourse if the seller didn't want to cooperate. It's a gamble for the buyer and a shifty dodge for the seller.
 

Jddewitt81

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Doesn’t matter if someone wants to pay friends or family or pay extra to me. I have sold and bought from many ppl that I knew through friends and family. Never had one issue. However if someone wants me to mark up the price I will.. Of course I would never send friends and family unless I knew the person but in those case that I know them I like to give them an option to save a few bucks on the fee too. For me it’s more of passing along the best deal possible and do not require anyone to go that route.. I have known some of these ppl a while and those that I have bought and sold to I trust. I will keep an eye on this so I can figure on marking things up to acomodate the fee.
 

Telperion

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I've used friends and family on numerous occasions for various items. That said, I have never requested/required anyone to pay that way. Typically, it's someone I've dealt with previously or someone I know well. Yes, the PayPal protections are forfeited in such a transaction, but I agree that PayPal's policies can be "hostile to both buyer and seller." And it's not just PayPal, but state revenue departments. I live in MA, which now happens to be one of two states that requires PayPal to file a 1099K with the IRS if your payments received exceed $600 (federal threshold for PayPal is over 200 unique transactions totaling greater than $20K). I sold three ukuleles last year, all for a loss, but now I have to reconcile those sales for tax purposes. Only "goods and services" transactions are required to be reported while "friends and family" are not. I play ukes for fun and relaxation, not as a business for profit. Again, I'm losing money, so not evading taxes here either. Just trying to have a hobby and try new ukes. With these kinds of regulations though, on top of things like CITES, it's becoming too much hassle to buy and sell ukes.

-Steve
 

Booli

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One thing to consider regarding the PayPal protections -

Say the instrument is damaged in transit, or lost (yet shipped with insurance to cover the sale price)

and a claim needs to be filed with the shipping carrier.

They are going to want some proof of value or proof of sale to show value.

If your item was send via 'Friends & Family' payment, then there is no 'sale' as per PayPal, and you are giving the shipping carrier an easy excuse to deny the claim.

This is part of the 'protections' of simply having a 'Goods & Services' payment transaction (which PayPal also lets you generate both an 'invoice' and also a 'packing slip') which works in the favor of both buyer and seller as having documentation from PayPal to use when filing a claim with the shipping carrier.

Mind you, this is not an edge case, instruments are lost and damaged every day by UPS, FedEx and USPS here in the USA, and the fustercluck process of getting this resolved will eat weeks of your time.

So why not make it easier on each of us by having proper documentation and narrow down the room that the shipping carriers have to weasel out and denying the claim?
 
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Jerryc41

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Thanks for the explanation. I wondered what that phrase mean here in the Marketplace.
 

Jddewitt81

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I think it’s more a matter of using your best judgment. I don’t think most honest sellers require you to use family friends.. its more of an option to save the buyer some money. I think it’s good to be educated on the matter though. I once offered a return months later because the uke and buyer just were not clicking.. He paid family / friends. We are not all out to rip people off.
 

Croaky Keith

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I once tried to buy in the Market Place, the uke was advertised as a Paypal sale, but the seller insisted on Friends & Family, & that cost me money, (long story), so I don't really bother looking at items in there any more.

I have no intention of giving up my security of purchase protection, as that is exactly why I use Paypal.
 

Jddewitt81

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A seller should never require that. Unfortunately those types of sellers ruin it for the rest of us.
 

RedRamen

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When I posted this, I did not mean to imply that the people on the marketplace who ask for friends and family are scammers.

I just know that not a lot of people know the rules regarding friends and family. They don't realize that they are protected. They think that since they paid by Paypal, they are protected. If you google paypal friends and family scam, you will see lots of people who thought they were protected.

Also, I think people also did not realize that saying that a ukulele is $100 for a "friends and family" payment, but $103 if using regular paypal is not allowed. The paypal fees are fees that paypal charges the seller (not buyer) for using its service. If you don't want to pay the fee, don't use Paypal. Use money order or cash. But if you like the convenience of paypal, then you should pay the fee. I know a lot of people that mark up whatever they are selling to cover the fees, but that seems unfair to me. If the cost of what you are selling is $100, sell it for $100. Dont charge $103 because you don't agree with the fees, when you know what you are selling is $100. But that's just me. I am happy to pay paypal their 3% fee for using their service and convenience.
 

Ragtop232

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I speak from experience, if you think retailers EAT the percentage a CC company charges, you are wrong. While it is a convenience, this drastically effects the bottom line. Here's how most calculate, CC percentage fee x average percentage of gross sales paid with CC gets added to markup of all prices. Example, I have a standard 20% markup on an item that is $1000.00, which would be 1200.00. Now, 80% of my gross revenue is paid with CC @ 3% fee, so here I add 2.4% to every item available, so instead of my markup being 20%, it's now 22.4% on all items. Now the item is 1224.00. Remember, the retailer is not opening saying this is a CC surcharge, but this gets added to all products in markup.

I do think there's a legal element here that probably needs to be looked at a bit more in-depth concerning PayPal and openly declaring a 3% surcharge for using PayPal and also using Friends and Family to buy goods. Buyer and Seller beware and use your own conscience.

Jim
 

Rllink

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My own personal thoughts on the subject is that if someone wants to sell me something, then they need to make it easy for me to buy it. There are a lot of things I've passed over just because someone put a "friends or family" condition on it.
 

RedRamen

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I speak from experience, if you think retailers EAT the percentage a CC company charges, you are wrong. While it is a convenience, this drastically effects the bottom line. Here's how most calculate, CC percentage fee x average percentage of gross sales paid with CC gets added to markup of all prices. Example, I have a standard 20% markup on an item that is $1000.00, which would be 1200.00. Now, 80% of my gross revenue is paid with CC @ 3% fee, so here I add 2.4% to every item available, so instead of my markup being 20%, it's now 22.4% on all items. Now the item is 1224.00. Remember, the retailer is not opening saying this is a CC surcharge, but this gets added to all products in markup.

I do think there's a legal element here that probably needs to be looked at a bit more in-depth concerning PayPal and openly declaring a 3% surcharge for using PayPal and also using Friends and Family to buy goods. Buyer and Seller beware and use your own conscience.

Jim

Sorry if I made it seem like I thought retailers ate all the costs. I understand that stores mark up their products to cover their costs, which include credit card fees. But to me that is just a business figuring out profit vs costs. So they figure out how much to mark something up so that they make money and cover their costs. But a markup can cover anything from the any of the store’s costs like wages, insurance, remodeling, etc. it’s not a surcharge. They don’t say, for cash you pay this, but for credit cards you pay this. Because charging a surcharge for using a credit card is illegal.

Also, however retailers or sellers work, I am saying that I don’t feel good about passing the fee to buyers. But I don’t speak for others. And while some people are okay with it, I am not. I feel like I am cheating someone. If I know a ukulele is $100, the buyer shouldn’t pay more than that just to cover my fees of doing business. The fee is something that I am willing to pay to use PayPal, because I am using a service after all. And I don’t expect to use their or any service for free. PayPal needs to be able to pay its workers too. It’s a business after all and not a charity.
 

Jddewitt81

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Do you realize how much Paypal is worth? If I offer a friends / family option it is because I consider the person a friend. Would be no different than selling in person with no fee. Again I don’t require anyone to go this route but paying a fee on a $1000 ukulele that I already marked down seems unreasonable. That’s why the option is there; if someone doesn’t want to pay the fee then they do not need to buy. I personally have no problem paying the fee for something I want and am getting considerably less than retail if I do not know the person well. I have bought over 50 ukuleles and many have been family / friends and many have been goods / service. I don’t require a seller to eat all the cost though. It needs to be a good deal for the seller too.

Many ppl expect the seller to pay fees and shipping.. shipping a uke right isn’t cheap! I think if you are not ok with it then simply buy somewhere else at full retail or buy from someone who at least give you the option to pay goods / services.
 

Jddewitt81

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I would never buy if it said you must use family friends. That’s a red flag.. I say just use your best judgment.
 

Kevs-the-name

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I buy and sell using friends option regularly.

However, as already mentioned, I use best judgment.
If somebody I didn't know insisted on friends payment only, it would be a no go..similar to a Western Union payment!

Buyer and seller beware.
 

DPO

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Every instrument I sell is done using PayPal. I would never ever use friends and family, it is simply cheating paypal. If you want the benefit of paypal you you pay the fee.
 
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