PP MC/Debit Card Charges

[rd1000]

HI Folks,

I decided to get a Paypal MC because the 1.5% cashback looked pretty attractive. My joy was short lived. I also have a MC/Debit card on a US bank account. I made a charge on both at the same time to see the difference. Paypal charged more for the same purchase because of their exchange rate, but with the cashback it worked out almost the same. So much for the bonus. At least it wasn't any more though. Until now.

I have been noticing lately that when I make a purchase with the PP Mastercard, for some reason they reverse the charge and then charge a higher amount. For example, on Non 26th I charged $109.59 US. A hold is placed on the money and 4 days later there is a refund of $109.59 and right away a new charge for $111.63, an increase of $2.04 US. This is happening almost all the time now.

I called Paypal to see what this is all about. The very nice lady on the phone politely told me that she is not sure what the charge is. Now from any other company I would be shocked. She said it may, possibly, could be an exchange rate thing. I asked her if not that, what else could it be? She said it may also be a 1% charge from mastercard.

With the above example, the 1% charge doesn't make sense because it is a 1.86% increase. Lacking a better explanation, I believe it is Paypal making up for an exchange rate fluctuation in those 4 days that is not in their favor. Interesting to note, I have never seen this practice whereby the reversed amount is higher than the final charge.

I have stopped using the Paypal card. I will stick to the card on my US bank account. I think I will stop letting Paypal exchange any of my money from now on.

I only bring this up in case others are not aware of it. I know things get pretty busy and you may not look closely at your Paypal account.

Happy Selling
Rob

[brownboxit]

That's obscene... we regularly process US to CDN funds using our merchant accnt in Canada, by law you can't charge until goods are shipped while the authorization happens a few days before.

Clearly, the rates change between. If we tried to make up exchange rate swings like that they'd throw us in prison I'd imagine.

[treasure-pot]

I have stopped using my PP debit card for all but eBay fees. It's all well and good to offer a cash back program but PayPal seems to make a cash grab of their own at every turn.

I'm also not very pleased that PayPal will not call Canadian customers when they put a hold on the cards. No calls, no emails... nothing. Better you should find out at a cash register that your card has had the switch thrown on it than PayPal exercise a little customer service.

Randall, I haven't forgotten this issue.

Bill

[deltone]

I'm not sure what you guys are talking about. I was in Texas a couple of weeks ago and used my card often (too often actually) and I got the 1.5% back each time, and there were no extra charges. I have a US based account though so perhaps this is the difference. I don't have to deal with any exchange rates. I have no intention of using this card within Canada. I use it strictly for vacations to the US which I do rather often.

[your-chic-shopper]

Actiually I am kind of confused ..I convert my money order too our business account through our Mastercard and Visa terminal . I have never seen what you are speaking about
Todd

[rd1000]

Hi Deltone,

Making purchases in US currency is fine. It is great for that.

Unfortunately Paypals exchange rates are awful.
I would avoid using it outside US.

[deltone]

So you made these purchases in Canada then? OY, not a good idea for sure. I didn't even start using Paypal until I had a US based account because no way I was going to pay all that extra. VERY EXPENSIVE

[shooger]

"So you made these purchases in Canada then?"

Yes, I do believe all of us live here in Canada, after all. 🙂 We can't be on vacation in the US all the time!

[zarzuella]

I've been using my PP Mastercard for about a year to purchase from my suppliers.
It is common practice to place a hold on the funds at time of order, and confim the charge at time of sale. This allows the supplier to adjust for any shortages in the order. Any time there is a difference because of exchange rate fluctuations, the final charge represents the actual cost at the time of cofirmation of the charge. I have had these fluctuations work to my advantage, but the continuing strength of the loonie over the last few months have resulted the reverse - I also see higher charges on confirmation.
The same thing happens if you use any US currency based card.

[amberwoodottawa]

Since exchange rate has found its way into this thread I thought that I would share the following.

This past weekend I drove across the border into NY State.

On the Canadian side businesses were advertising giving the Americans 25 cents on the dollar exchange. On the US side, US businesses were advertising charging the Canadians 40 cents exchange.

My bank charged me 32 cents to purchase US funds. PayPal gives me 29 cents.

If I brought my excess US currency back to my bank I would get 28 cents.

So why is there an official exchange rate and why waste everone's time telling everyone what the exchange rate is?

I know the answer however the spread in the real world is about 15 cents on the dollar!

Malcolm

[firedept10]

What did I tell you when they introduced this card to us. The pinks would not directly answer my questions. eBay is making that money back and then some. Trust me that Mastercard is paying them back part of that high interest rate they charge. Do the economics on this card. A line of credit is better than any charge card. As for exchange rates, this sure is a myth. No such thing exist on this planet and never will. We will always pay more to purchase dollars and sell for less. This is how the big boy banks make those billion dollar profits every year. We are all smart business people here on this board. Had to be to get here. So please think about what I have stated. You will not win with this card. It is impossible. JMHO!

Don

[ospreylinks]

All affinity cards (that is what the Ebay card is) offer a fee back to the sponsor....and yes, someone (read cardholders) are paying it everytime they use the card. That is why groups and organizations want to be affinity card program sponsors.... It isn't to get their picture or logo on the card (although that is part of it), the reason is that it is normally an easy sell to their membership to get them to carry one, and then every time they use it the sponsor gets paid....

So if you are not already lining Ebay's pocket enough, you have now given them more by signing up for these ridiculous scams!

Jeff

[dan.j.m]

Seems to me that the exchange rate I've been getting using my PP MC w/ the cashback is better than what the banks would be giving me. I'd imagine the reason for the higher charges are because the exchange rates have been getting worse day-to-day for us since August, where it dipped around .745 and it was up to .77 not too long ago. Today is a good day to exchange your money 🙂

Or possibly they're market timing...

[rd1000]

Hi Dan.j.m

You should have a close look. Paypal has the worst exchange rates of any financial company that I can find, including other credit card companies. It does even out with the 1.5% cash back though.

My problem is that I have noticed lately they put a hold on the funds the day of the purchase. Then a few days later, when the payment clears they refund that money and charge a new higher amount. I have never seen this work the other way. I could be wrong though.

The lady I talked with at Paypal couldn't explain for sure why they charge the higher amount. She said it may be the exchange rate.

I am only using my Paypal card for US purchases. I brought this up so people will start having a close look at their accounts to see just how much it is costing you to use that card.

[dan.j.m]

I just went over a couple transactions I did 2-3 days ago that are now listed as completed, and in conjunction with the 1.5% I'm getting exchange rates of around CAD$1.32=US$1.00
Seems better than the rates on xe.net
I also converted several hundred US$ cash on the Friday and I found that the best rate of exchange in town amongst the banks and small-time currency dealers was CAD$1.2957 or so =US$1.00 @ RBC so I'm rather happy.
However, I think I do recall the rates being worse in the past, but I can't confirm that right now.

[rd1000]

Dan.j.m

When you say "in conjunction" do you mean you are including the 1.5% with the exchange rate from Paypal? Or is the 1.5% in addition to 1.32 exchange rate.

I would find it very strange if you found the rates better at PAypal. It is widely known that they cash in heavily on exchange rates.

[your-chic-shopper]

Actually this myth about them cashing in on the exchange rate ?

The rate converting from American to Canadian , while not the highest is competive

It's really important to note that the rate you see on the new at night time or in the morning . Is not a rate you can actually get , this is the stock rate

A great way to compare the rate would be to compare the rate the bank gives .

Then when you compair that rate , you have to understand that your bank has staff that work all day fliping stock . They do this so the bank can get the best exchange rate

I would have to assume paypal does not

[souranial]

What about the new PowerSeller MasterCard? Has anybody tried that? It may seem like a good idea because its for Canadian Powersellers?

Thanks,

Daniel