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Recently, there's been a trend to send Personal Paypal payments as a gift to other CAGs for the purchase of items. This is done to prevent the charging of fees to the recipient for the Paypal payment. Unfortunately, this is against Paypal's User Agreement, in section 8, under Fees.

Paypal User Agreement:
https://cms.paypal.com/us/cgi-bin/?&...locale.x=en_US

Specifically:

Originally Posted by From Paypal UA on Fees Fees are based on whether you are making a Purchase Payment or a Personal Payment. A Purchase Payment is a payment received for any of the following: A sale of goods or services (a “Commercial Transaction”); A payment you received after using the “Request Money” tab on the PayPal website; A payment you received for a donation; or A payment that is sent to, or received by, a business or other commercial or non-profit entity. A Personal Payment is: Amounts sent to a friend or family member without a purchase. Personal Payments include, but are not limited to, sending a gift to a friend, or paying a friend back for your share of a lunch bill; and Personal Payments must be sent between two individual persons (not to or from a business). For Purchase Payments, the recipient of the payment will always pay the fee. For Personal Payments, the following applies: -The fee is based on the Payment Method, -It is free to send a Personal Payment to someone in the United States if you use your bank or balance as the exclusive Payment Method*. All other Personal Payments include a fee as noted below. -The fee is paid by either the sender or recipient. Not both. -The sender of the payment determines who pays the fee. At the time the sender is completing the payment, the sender is given the option to either pay the fee or have the recipient pay the fee. Additional fees apply if you are sending or receiving money to or from a country outside the United States, or transacting in a foreign currency. If you use your credit card as the Payment Method for a Personal Payment, you may be charged a cash-advance fee by your credit card company. *In some instances, Personal Payment pricing may not be available, the payment will be considered a Purchase Payment and the Purchase Payment fees shall apply. This may occur on non-PayPal websites that offer you the ability to send a payment from your PayPal account.

If you're making a purchase for an item, the payment has to be sent as a Purchase payment and not a Personal payment. If a payment is sent for a purchase as a Personal payment, Paypal won't do anything for dealing with a chargeback, so it's for the sender's protection to make sure payments are sent as Purchase payments. If you file a dispute with Paypal over a purchase and the payment is a Personal payment, they won't do anything to resolve it.

Paypal fees are easy to calculate, and there's a number of website that show both sides of the transactions for money sent and money received. One I used to frequently (http://www.rolbe.com/paypal.htm)is no longer online due to the owner passing away. Try using one of these instead:

http://thefeecalculator.com/
http://www.gregledet.net/ppfcm.html
http://salecalc.com/paypal

It shows how much needs to be sent to have the recipient receive a certain amount of money, as well as how much the recipient will receive and how much the Paypal fees are.

In the negotiations for the price of an item or items, please work out who should pay the Paypal fees in working out the terms of the deal, though Paypal obviously collects the fee off the recipient's side of the transaction. The Paypal calculator site above is very easy to see how much the sender should be sending to have the recipient net out an amount after fees.

There's also other payment methods that can be used in lieu of Paypal, as well.

EDIT:
As we've gone through the user agreement multiple on the Personal Payment issue, it was brought up again that the payee on Paypal payments can't surcharge for the use of Paypal fees on the payer. The payee pays the fees on Paypal for Purchase payments.

No surcharge section of the Paypal UA:

Originally Posted by Paypal UA 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.

You cannot explicitly charge Paypal fees as a surcharge for a transaction. If the price for the item is listed, it can't have Paypal fees added as a surcharge. Payees pay the fees with Paypal and it can't be explicitly added to a purchase cost.

EDIT - Addendum about Amazon Payments:

For people that would rather not deal with Paypal, Amazon offers a similar service with Amazon Payments:
https://payments.amazon.com/sdui/sdui/index.htm

EDIT - Addendum about Steam multi-packs and PSN gameshares:

Originally Posted by jp0213 I've contacted both Paypal and Steam about the gift payment and gifting of games (Steam has a thing about extra copies not being able to be sold). Paypal Steam

Originally Posted by shrike4242 Thank you for taking the time to check with Paypal and Steam, jp0213. Good fact to know that they consider Steam 4-packs to be worthy of Personal payments for "repayment" of the purchaser's copies of the game. I think gameshares would probably work the same way to Paypal, since it's the same analogy of the up-front purchase of an item and the "repayment" to cover the share of the item, like the "repayment of lunch debt" analogy Paypal themselves use.

Aww fo sho

Alright, I guess I'll be the one to ask: Why the sudden concern with this? I think most people understand the risks of gifting payments, and it's always by mutual consent. Was there some sort of complaint from paypal?

This is a bummer. I too am curious as to why this is now an issue. Seeing this I'll have to reprice some of my items since I was listing them with the assumption that it would be paid via a gift payment.

I only do gift as payment with CAGs that Im comfortable with and have high feedback.

Originally Posted by bvharris Alright, I guess I'll be the one to ask: Why the sudden concern with this? I think most people understand the risks of gifting payments, and it's always by mutual consent. Was there some sort of complaint from paypal?

Shrike left a message in my thread where I was asking for gift paypal for a PS3. Of course I would have accepted non-gift paypal and it would have only been 8 bucks more for a close to $300 purchase. I can see not doing gift for that purchase, but it's annoying for an item that might only cost a few bucks. Oh well, rules are rules I suppose.

Originally Posted by MikeBastard Shrike left a message in my thread where I was asking for gift paypal for a PS3. Of course I would have accepted non-gift paypal and it would have only been 8 bucks more for a close to $300 purchase. I can see not doing gift for that purchase, but it's annoying for an item that might only cost a few bucks. Oh well, rules are rules I suppose.

So we can blame you?

time to start getting certs from amazon

Originally Posted by MikeBastard Shrike left a message in my thread where I was asking for gift paypal for a PS3. Of course I would have accepted non-gift paypal and it would have only been 8 bucks more for a close to $300 purchase. I can see not doing gift for that purchase, but it's annoying for an item that might only cost a few bucks. Oh well, rules are rules I suppose.

Wow, you wanted people to gift you hundreds of dollars? lol

If people were actually wanting/expecting this then I can totally understand banning such payments here. I thought people only used it for when they were buying a game or something, at least that's the only time I expected gift payments. Sure as heck wouldn't expect people to do that for the DSi I have been trying to sell, heh.

Paypal takes fees because they do the transaction, but they also protect the seller and the buyer in that case; with gifts, they don't. Use the normal one. It helps!

I changed my Lowball rules to reflect this policy.

I changed my cheese to eat my mold....

I have a student account so I only have one payment option and I think it's a payment that doesn't have fees but isn't a gift so am I still okay?

I prefer to pay others with the fees on top of the purchase, honestly, and try to suggest the same (although I have also suggested gifting as an option).

I kind of like this rule. It keeps us honest.

And yeah, I'm a goody two-shoes.

This is why I've been trying to promote Amazon Payments for so long, but nobody wants to use it. There are no fees for either side.

Yea, I have a student account too and the only option is to send money which I think is a gift. I don't mind taking the risk of sending it as gift but I don't know what to do if gifting is not allowed anymore :(

Originally Posted by Reikon This is why I've been trying to promote Amazon Payments for so long, but nobody wants to use it. There are no fees for either side.

humm .. news to me .. I will look into this ^_^

I think it should be user's choice, both sides, if people want to put their necks out, let them. Long as they know they will get no support from paypal/cag if anything were to happen.
People are going to sneak around this rule regardless. I know it's made to keep less bull shit from coming from this, but if anything, I'd just leave this sticky as a warning rather than a rule.

I personally haven't had in issue with people on here yet so I have payed with gift payments. Saves me money and that is all that matters at this point.

Originally Posted by Empyreal I think it should be user's choice, both sides, if people want to put their necks out, let them. Long as they know they will get no support from paypal/cag if anything were to happen. People are going to sneak around this rule regardless. I know it's made to keep less bull shit from coming from this, but if anything, I'd just leave this sticky as a warning rather than a rule.

I agree. I'd rather do gifts most of the time if the CAG is trusted.