The Difference Between Paying As Gift & As Goods On PayPal

At the request of a reader, I’ve decided to elaborate on what I mean when I refer to paying as gift, or as goods when buying and selling Lululemon.

With regards to buying and selling in venues OTHER THAN eBay, so Facebook or elsewhere online, you can ask the buyer to pay you the money as a “Gift.”

When you sell something, the buyer opens up PayPal and the payment options are “Goods” or “Friends and Family.” When you’re asking a buyer to pay as “Gift,” you’re really asking them to click “Friends and Family” when they payment options come up. This means that the buyer is sending you the money and if something is wrong or they want a refund, they really don’t have the right to get one. Although they may be able to if they contact PayPal, as I have heard of some cases where PayPal grants the refund regardless of the fact that it was paid as “Friends and Family,” but it’s rare. (As an aside, you may also be able to contact your credit card company, if you paid PayPal with a credit card, but you never know if they’ll help either.) In any case, typically, when a buyer pays for your goods as “Friends and Family” they are trusting that you’ll deliver their item and it will arrive as described. Hence, the safest way to buy something is to pay AS GOODS.

On eBay, the buyer has no choice but to pay “As Goods.” That’s how eBay honors it’s guarantee. “We guarantee that you will get the item you ordered or you will get your money back. eBay Buyer Protection covers the original purchase price plus original shipping on virtually all items on ebay.com.” You can find more information on eBay’s guarantee here. Unfortunately, eBay passes on the PayPal fees to the seller, which are 3-4% of the sale price. What really sucks is that eBay owns PayPal***, so it charges you when 3-4% when you make a sale, then eBay charges you another “final value” fee, which varies depending on the listing type. You can find out more about final value fees here.

The reason that buyers pay as goods is to protect themselves, and the reason that eBay charges that back to the seller is because eBay is very “buyer-centric.” The PayPal fees pay to protect the buyer against a poor quality item, or an ignorant or dishonest seller so the seller has to pay them. Of course, most sellers factor this into their price, so in the end, the buyer ends up paying them anyways. So, if a buyer can choose whether or not to pay the extra 3 or 4%, why not give them that choice. This is where selling in Facebook groups or in other online venues can be useful. For more information on selling in Lululemon Facebook groups, like where they are, check out this post.

If you’re on Facebook, as a seller, you can ask people to pay “as gift or as goods.” And if they opt to pay as goods you can say “If paying as goods, please add fees.” Which, to most buyers means add the PayPal fees to the total dollar amount that they send you. For example, if you’re selling a hundred dollar item, they’d have to send you $104 in order to cover the PayPal fees. Then the buyer gets to decide whether they trust you enough to send the payment as a gift, or pay extra money if they’re concerned about whether or not they’re receive what they ordered in good condition.

If you’re an honest seller, with excellent feedback, who constantly delivers excellent-condition items on-time, as a buyer, I’m pretty likely to trust you enough to send money “as gift.” Plus, I don’t want to pay the extra money if it’s unnecessary. This is only one reason why it’s important to develop and maintain a good reputation in the Facebook groups.

On eBay there’s no way to get the buyer to pay the PayPal fees, except for rolling it into your final price. On Facebook, you can ask them to pay them, if they choose to. There’s no “button” they can push to pay the fees, they can only add them to the final total and send you that amount, then PayPal will deduct the fees automatically.

I hope that helps you understand the difference between paying as “gift” vs. paying as “goods.” Thanks to “addictedtoink,” for inspiring this post!

UPDATE- October 11,2015

The fact that this post continues to be a main source of traffic for my blog makes me happy. The reason it remains popular is because unfortunately, I don’t feel that PayPal does the best job of explaining exactly how this works, and I feel that my post gives a thorough explanation of exactly how you are protected by PayPal and when.

The reason I feel that PayPal doesn’t have the best explanation is because, if you search “difference between gift and goods on PayPal,” PayPal’s website comes up with explanations of the different types of payments, but the website doesn’t explain how or when you’re protected. For example, under gift, PayPal writes “Select this payment type when you’re sending money as a gift for a birthday or other special occasion.” What it fails to mention is that people are not protected when they use this payment.

The other available posts are community boards, which some people may find tedious to scroll through, so I think that my post, while it is “Lululemon-centric” is better at explaining how and when you’re protected and when you’re not. Why don’t you let me know what you think about this post, and if there is any way I can improve it to reflect what you’re searching for?

Thanks for reading!

***eBay and PayPal are now separate companies.

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Author: lululemonexpert

Blogger, Lululemon Enthusiast, Polyglot, Autodidact

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