Fiverr no longer $5?

[timmbbo]

Are gigs now costing 50 cents extra?



I just purchased my 740th gig, through Paypal. I noticed, for the first time, that there is a 50 cent processing fee. I use paypal for my own merchant payment, so I understand how unpleasant Paypal rates are, but still, I eat this as a cost of business. Questions:

1. The processing fee is 10% of the cost of the gig, which is pretty steep. Even high-end credit cards charge around 4-5%. How is this 10% surcharged justified?
   
   
2. Are the gig sellers getting any part of this 10% surcharge, or is it all going to Fiverr?
   
   
   
3. Is this processing fee allowed by Paypal’s Terms of Service? In my layman’s knowledge of Paypal, merchants are not allowed to add a surcharge onto their regular prices for transactions through Paypal’s system.
   
   
   
4. How are gig buyers warned of this processing fee? I didn’t see it until I had already purchased the gig and was committed.
   
   
   
   Somebody at Fiverr (err, make that Fiverr fifty-center) has some explaining to do…
   

[timmbbo]

 

> 3) Is this processing fee allowed by Paypal's Terms of Service?

 

I can answer part of my own question. According to Paypal's User Agreement:

4.5 No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions.

So, it does appear that Fiverr is operating outside of Paypal's User Agreement...

 

 

[steveeyes]

Reply to @timmbbo: Interesting. I wonder if Fiverr is even aware of this and when PayPal finds out, I wonder what they will do.



If Fiverr is smart business people, I would think they are already discussed with paypal before implementing it, but maybe not.

[fine_articles]

For the no 4 question, you are not warned in advance. I got to know this from one of my buyer recently who asked me about it. I think Fiverr need to explain that.

[inspiredtony]

i’m not aware of this new development…

[halasjesse]

I agree. Fiverr has some explaining to do.

This kind of thing is going to encourage buyers to go elsewhere.