Print On Demand Designers Feel Fees of PayPal Pinch

Posted by Mongo Friday, December 16, 2011

As a designer, I love getting those little emails that say, “Congratulations!  You just sold a design on XXXXXX”.  That “DoNotReply” form letter is a welcome sight in the world of email.  It means that I produced something that someone else found to be good enough to buy.  It’s a validation of my efforts at being an entrepreneur. 

Even more welcoming is the email from PayPal that states I’ve received payment from the Print On Demand company I’ve been using to sell my works.  That means I’ve made enough to get paid for my efforts.   While the individual sale is a validation for my art.  The payment email is a validation of my business model and my ability to continue doing the work I love.

Quite recently, though, I was greeted with my usual email about payment and went skipping and “tra la la la”-ing into my PayPal account to see the payment applied to my balance.  Unfortunately, something didn’t add up.  One of the companies I use, had issued a payment and PayPal issued a fee on top of it to the tune of 2.9% plus $0.30 of the payment. 

I had never seen a fee tacked onto one of my commission checks and wasn’t sure if this was PayPal mucking something up or a new policy I was unaware of being instituted.  

I contacted the company and asked if they had seen this before from any other designers.  They informed me that 'Yes, unfortunately, PayPal had started requiring them to issue commissions as a purchase of services, instead of a personal payment.'   Seems rather silly since the company did not actually purchase any service from me.  I guess you could say that, as a designer, they are purchasing my design at the cost of their base pricing on apparel or products.  Still, they are not the ones purchasing the service, the customer who buys my work is paying for a service and I am splitting the cost of the item with the Print On Demand company.   PayPal looks to be tacking on fees to just be… tacky.

So far, this is the only company that has been told by PayPal to do business this way.  I will know more once I receive payments from the other Print On Demand publishers I use.   The company that provides 50% of my commissions states on their website that PayPal doesn’t charge fees for payments.  This may change or this may be a case of them being a bigger player in the Print on Demand services industry and that keeps them exempt from this ‘fee’ that PayPal levies against the smaller guy.   I am currently investigating with PayPal as to why this fee is now appearing and calling somewhat of a shenanigans on their practice of not requiring a fee with payments from other sites.  As an update, I submitted a request for verification on December 1st and it's now December 16th.  Great customer service you got there PayPal.

Of course, I could shoot myself in the foot with this and it could cause PayPal to start charging fees on all site payments.  If this is the case, I will decide on whether or not I will keep using PayPal as a payment service.  

The argument against physical checks
It sucks for me, the artist, because I am at the mercy of the mail service and have to be mindful of where the mail ends up in my house as well as minding the amount of transactions I make in my account.  Luckily, I think I am OK in that area.  I very rarely deposit money or write checks, using the wonderful world of technology at my disposal.

It sucks for the Print On Demand company because I am burdening them with having to physically print out a check and pay postage, rather than direct deposit electronically into an account.  Now, in the case of my two biggest Print On Demand partners, I am not as concerned for them.  They are huge corporations that have means necessary to do this. 

However, I do use a couple of smaller businesses and I want them to do as well as possible.  Go Small Business!   The one in question did not seem to feel any more burdened by issuing me physical checks.  They only require minimum payment of $50 and issue a $2.00 check fee to send me one.  I would rather give them $2 for my check instead of giving PayPal 2.9% plus $0.30 on every payment amount.   I could receive a physical check for $500 and only have to pay $2.00 for it vs. paying $14.80 for it to be sent electronically. 

This is one of the reasons why I quit doing business over eBay.  The fees kill the ability to reasonably price anything.  In order to make a profit you need to account for listing and payment fees and that ends up pricing you out of a sale on some items.  Back in the days when I was skirting the edges of PayPal rules and did secret e-card auctions, I would end up losing a lot of money to fees for items that had multiple purchases at the tune of $1.00.   33% of my  efforts went to PayPal and an additional percentage went to the fees to list the items.

So, PayPal is nothing new in my world.  They're a business and will continue to do what it takes to make money for their service.  Of course, they can be a bit douchey when it comes to their fees.  Look at what happened with Regretsy, this year.  That doesn't mean we have to play their games.

Just recently, I was a part of a huge giveaway and thought it would be nice for us indie design brands to take up a collection to get something nice for our organizers.  I put out the call to the others to give what they could, without being too crazy... it is Christmas, after all...  we all have to take care of our own as well as each other.  Anyway, the money came flowing in and after doing some quick math, something wasn't adding up.  PayPal siphoned off a bit from a few of the payments because of the type of payment the issuer made. 

So, as a business owner, always pay attention to your account and always be careful when using those little radio buttons on the payment portion.


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