PayPal MasterCard - is it possible that Canadian vendors are scamming you?

[shooger]

Do you have a PayPal MasterCard and do you use it at Canadian vendors?

I used mine at a restaurant here in Vancouver recently. My PayPal statement came through for about $25 US, which was reversed a couple days later, and then it was put through for $28 US. I tried figuring out what happened, but the PayPal statement is totally blank. All it tells me is the name of the restaurant, the amount that was taken from my account ($28), and the date.

How can I find out what total the restaurant rang through? The exchange rate PayPal used that day is not given. If I had that, I could figure out how much the restaurant charged me... but I don't. I could use the rate they're offering today, but it has been changing so fast back and forth lately, that wouldn't give me even a close figure.

So the vendor could be charging me more than I authorized for the bill, and there's no way for me to know it.

I think something needs to change with PayPal. If all they're going to tell us is the US dollar amount, they need to at least give us the exchange rate that was used, so we can work backwards and find out how much the vendor charged us! Imagine if you went to Mars and bought something from some Martian shop for 22 Gleemaxes. He took your PayPal MasterCard number and sent you on your way. When you came home, you checked your online statement, and all it said was "you were charged $328 US". Did he ring it through for 22 Gleemaxes? Or maybe 35?

[rd1000]

That is not from the vendor. That extra charge is from Paypal. I called them about that and the lady did not give me a definite answer. First she said it was an exchange rate issue. When I questioned the fact that the final charge was always higher regardless of what the Cdn dollar was doing, she changed her story and said it was a Mastercard thing.

After seeing an increased charge over a period of several months, I stopped using Papal for Cdn purchases. I charged the same amount on two cards at the same time and found that the high Paypal exchange rate wipes out the cashback bonus anyway.

Rob

[shoplineca]

You should only use c/c in the denomination that they are in. If using a USD c/c, then only purchase in the US, if using a Cdn c/c, then only purchase in Cda, if using a Martian c/c, then only purchase when on Mars.

Many banks and c/c companies have a long history of adding a charge to perform a conversion in addition to the profit they enjoy on the exchange rate.

It is often justified by them as having to operate a foreign bank account or perform an additional task where clearance of funds is delayed and there is a cost to them for that clearance delay.

Regardless of their reason, when given, it is never a wise decision to use a foreign dollar c/c for your purchases as youw will loose on the exchange atthe very least.

Malcolm

[shooger]

I realize that PayPal doesn't give the best rates (although I heard they recently lost a lawsuit and had to make their rates somewhat more fair?) and that the cashback bonus doesn't even cover the loss, but the fact remains: how do you know the vendor punched in the amount you authorized them to take from you?

[shoplineca]

The only way is to keep your c/c slip that you sign and compare it to your c/c bill when it comes in. If there is a difference, then you report it to your c/c company and they will credit you the difference and they will go after the merchant.

Malcolm

[muminlaw]

I think you're missing the point here Malcolm. Shooger's OP said that the statement didn't give details about the Cdn amount, only the converted amount.

I can't figure out how they can get away with that lack of detail on the statement. I know my Cdn charge card statements (not PayPal) let me know any US amount I charged as well as the Cdn equivalent they converted it to (maybe even the rate - I can't remember right now). I can't see any way you can tell if the vendor charged the proper amount - sounds like an invitation for out-and-out theft! I agree with Malcolm that I wouldn't use it.

Glenda

[auctiondropnship]

Please note that

Paypal Mastercard is actually

Mastercard ~~paypal pays them to have there name placed on the card

[shoplineca]

Glenda
I understood what Shooger was saying as my earlier comment said to only use c/c in the denomination that they are in (US c/c for US transactions, Cdn c/c for Cdn transactions etc.).

You can easily do your own calculation of what the conversion rate used was but did you ever think that maybe the restaurant is also loosing money on the transaction or perhaps they were the only one loosing money (as usually it is the merchants who get hit the hardest)?

Todd is quite correct as well about this being a PayPal M/C, it isnt. Anyone can get c/c with their own business name imprinted on them and distribute them, the same with postage stamps.

Malcolm

[zarzuella]

I used to be a restauranteur. Restaurant cc terminals are set up differently to accommodate tipping. Maybe this has something to do with it?

When you get your bill, the waiter enters the total bill amount against your cc and presents it to you for signature. If you change the amount (by adding a gratuity) the waiter/and or bookkeeper must re-activate the transaction, update or confirm the the original amount, and complete the transaction Some restaurants do this right away, others do it in batches - possibly days later. If you are viewing your transcations online, you will see the original (unconfirmed) amount sitting there until the transaction is completed, possibly at a different amount. You also would get caught with currency fluctuations if the transaction is pending for several days.

Ann

[shooger]

It was chinese food. They took the number over the phone, and I tipped the guy two bucks at the door (on the card). I've still got no way to find out what the restaurant charged me. All I know is that it came out to $25, oops, $28 USD. Since the dollar has been moving around so quickly lately, who knows that they punched in when they got back to the store and rang it through.

Thanks for all the discussion, but it doesn't answer my question, unfortunately. I guess there's no answer. Just don't use PayPal cards in Canada, I guess.

[josephine]

That's why I don't use my Paypal card anymore (assuming you mean the mastercard "debit card") .. the transactions are too difficult to read, unlike normal credit card statements.

[rd1000]

A lot of people have stopped using that card in Canada. I wonder if Paypal will get the hint.

[dragonimpact]

How's this for PayPal.

I bought some car gear at the local Canadian Tire for $36.32 C$ ( that's after taxes ) and PayPal billed my account $30.36 US$ and is giving me a $0.46 US$ "cash-back".

That's a rate of USD x 1.198. I withdrew some US funds today as well and received an exchange rate of USD X 1.17165.

You get a better exchange rate buying with your PayPal MasterCard than withdrawing your funds to your bank.

Try it and let me know. See if you get a better exchange rate buying stuff than withdrawing.

Alex.

[rd1000]

Wait a few days. Paypal will refund your charge and withdraw a new higher amount. Read OP's original post for details.

[zarzuella]

Same here. I used to use my card daily to pay Canada Post. No more!
Now I use my Airmiles cc and actually get some small benefit from CP's outrageous prices.

Ann

[shoplineca]

As an ex-banker, here is basically how it works:

There is a different exchange rate for cash transactions than there is for cheque or debit transactions. There is a different exchange rate for purchasing than there is for selling.

That spread can be quite significant and is there to (a) accomodate the bank's expense in handling foreign cash or delays in clearing cheques/debits and (b) to provide them a profit on the exchange.

The banks start at the current Bank of Canada exchange rate (which is NOT the rate they purchase or sell US funds at) and set their spreads according to their cost of handling the cash or debits and credits with a set profit margin built in.

There really isnt alot of room for PayPal or any after-market c/c company to build in much profit on c/c purchases so they might be getting an additional .5% (on the exchange). It will be the banks that they deal with that will get the largest spread, again as a recovery of handling expense and some profit.

PayPal makes most of its money on exchange when people are converting their purchases before depositing to the Seller's PayPal account and when PayPal is exchanging and remitting to foreign banks as requested by the Seller.

We know that you can reduce your exchange expenses to PayPal by opening a US account with a US Bank and by operating a US $ PayPal account and a Canadian $ PayPal account.

After that, the profits made on exchange will be with your own banking institutions and not PayPal which are hopefully favourable to you.

Malcolm

[imagi.nation]

Very interesting. I haven't experienced anything of what is being described here. I use the PP card almost daily and monitor the transaction on the PP site like a hawk and it has never happened to me. I wonder what the difference is.

I have had some issues with merchants who "authorize" the card before charging the card. For instance, I don't use the card at 'Pay at the Pump' gas terminals anymore because the pumps first authorize the card for X dollars (usually $75 or $80 for "fill up") which PP shows as a charge on the account. Then the gas station submits the actual price of the gas purchase and PP charges the account again. You have to wait 10 days for the initial authorization to be released by PayPal. No thanks.

BTW, I too, also receive a better exchange rate using the PP Mastercard than transferring to my bank account.

[discountlabelsupplies]

"Now I use my Airmiles cc and actually get some small benefit from CP's outrageous prices. "

Hi Ann, I have a simple question for you to answer. If CP has outrageous prices, why do you use them?

[zarzuella]

discountlabelsupplies:

Can you spell 'monopoly'?

Couriers are even more expensive, and not a reasonable option to ship $5 sales.

Ann

[shooger]

"I haven't experienced anything of what is being described here. I use the PP card almost daily and monitor the transaction on the PP site like a hawk and it has never happened to me."

What's being described here is that PayPal doesn't provide credit card users with any kind of statement, nor do they tell you how much the original charge in Canadian dollars was for, nor the exchange rate they charged you. They just tell you how much in US funds was taken out of your account. Period. Are you saying you get some kind of statement, or that they provide you with information nobody else gets? ?:|

"I too, also receive a better exchange rate using the PP Mastercard than transferring to my bank account."

No you don't. Malcolm just explained why it appears that way. In a few days, they refund your payment and re-charge it at a much worse rate (which is always worse than the worst current exchange rate).

Ann, discountlabelsupplies works for USPS and is just baiting you to reply so he can tell you to ship with USPS while taking the thread completely off-topic. 😐