Do you include payment fees?

[Hartmann]

For those of you who accept payments through places such as PayPal that charge a fee, do you build that fee into your invoiced amount?

If you do, how does it work? I am struggling with the reasoning behind this and how to justify the cost to the client.

[Sagewing]

It seems kind of unprofessional and rude to add a fee like that. Everyone knows there is a cost involved, but it should be worked into your pricing. If you don't want to pay the fee, you might be surprised at how many clients prefer to send checks.

I don't want to lose 2 or 3 percent of my revenue just for the 'convenience' of getting it right away. Checks are fine, and they are self-documenting and free.

[Hartmann]

It seems kind of unprofessional and rude to add a fee like that. Everyone knows there is a cost involved, but it should be worked into your pricing. If you don't want to pay the fee, you might be surprised at how many clients prefer to send checks.

I don't want to lose 2 or 3 percent of my revenue just for the 'convenience' of getting it right away. Checks are fine, and they are self-documenting and free.

Yeah, I have no problem not getting a payment right away but do have a couple of clients who prefer to use PayPal. I don't want my invoice to contain "PayPal Fee", so I may resort to upping my estimate enough to cover the percentage.

Thanks!

[shadowbox]

It's a cost of doing business IMO. Then again, I don't cater for price sensitive clients - if I were working on extremely tight margins in order to reach extremely tight clients, I would definitely think differently. If I'm being stretched, then the last thing I need is to lose another 3 or 4% in Paypal fees. So the client would get an option: cheapest price - pay by cheque, otherwise add 4% to the bill and pay by paypal.

It's no different to the local computer stores near me. They operate under really tight margins, so offer cash or debit card at advertised prices, but if you insist on credit card, you add 2%.

[LiquidReflex]

For the most part I agree that it's a part of doing business. If you offer PayPal or credit cards as a valid form of payment, then those fees are part of the cost overhead you'll have to eat.

However, if you inform your client that you take checks and they insist on paying by PayPal, I think you do have a right to inform them of the extra fee. Whether or not you do is up to you. As Sagewing mentioned, you may not look great in the client's eyes, but it is also not something that you readily offer, so to be required to do as they ask free of charge is not right either. If a client insisted that you travel out to their location to deliver the files instead of emailing them, you would surely bill them for your time and gas to do so.

I think it basically depends on what your policy is on payment, what the client is wanting to pay for and how well you want to cater to the client's requests. For some really good clients, I would maybe bend my rules and allow them ... but for the everyday new client, probably not.

[laurakr]

I get paid in checks, if a client wants to use paypal I tell them there will be a 5% surcharge

[Sagewing]

How can a client 'insist on paying with Paypal'? Would it be like this:

"Do you take PayPal?"

"No."

"I insist on using PayPal"

"Oh, well then I do take PayPal"

Is this really a problem? Usually it's the vendor that wants to use PayPal because they want the money right away. I rarely have clients say, 'can I pay you right away? I don't want to wait a few weeks then send a check, I want to pay right now!".

[shadowbox]

How can a client 'insist on paying with Paypal'?

I assume to get the buyer protection that comes with paying by Paypal (or similarly by credit card) - something a cheque wouldn't cover.

[beley]

I assume to get the buyer protection that comes with paying by Paypal (or similarly by credit card) - something a cheque wouldn't cover.

PayPal's buyer protection specifically excludes services, so that'd be a hard argument to make.

[Hartmann]

How can a client 'insist on paying with Paypal'? Would it be like this:

"Do you take PayPal?"

"No."

"I insist on using PayPal"

"Oh, well then I do take PayPal"

Is this really a problem? Usually it's the vendor that wants to use PayPal because they want the money right away. I rarely have clients say, 'can I pay you right away? I don't want to wait a few weeks then send a check, I want to pay right now!".

Their reasoning is that they have recurring payments to me (monthly) and want to automate the process. Why they can't automate a bank issued e-check or something I don't know. Granted, I'd like to keep the client as they are a steady source of income.

[Sagewing]

Ok, but that seems like the kind of thing that a decent sized client probably wouldn't bother with. Maybe the bottom feeders, but if a client is spending $10k+ for a web project, they probably accustomed to dealing with vendors and aren't too concerned with the Paypal protection.

[Ted S]

Ok, but that seems like the kind of thing that a decent sized client probably wouldn't bother with. Maybe the bottom feeders, but if a client is spending $10k+ for a web project, they probably accustomed to dealing with vendors and aren't too concerned with the Paypal protection.

I've never seen a credit card payment option for any invoice for a major agency (but think of the points you'd get).

In retail we accept credit card/ paypal fees as part of the cost of doing business and I imagine many small project freelancers build this in to their prices as well (if every project you do is $100, you're going to be getting lots of paypal payments). If you generally charge on a "cash basis" then the simple solution is to either reject the request as an accounting procedure or eat the costs. If you are unwilling to eat the cost and the client is unwilling to cut a check then you've got an awfully odd client-vendor situation and probably should take a step back to review the entire relationship.

That said, I've certainly seen invoices indicating this is a cash-price and there is an upcharge for credit (my moving company always does this and I always pay it for the protection the credit card gives me). However this is generally frowned upon by the credit card companies and something I'd try and stay away from unless asked -- if you don't bring up the fee you may discover you never have to mention it. Checks float funds for several days, few companies dislike that option.

Is this really a problem? Usually it's the vendor that wants to use PayPal because they want the money right away. I rarely have clients say, 'can I pay you right away? I don't want to wait a few weeks then send a check, I want to pay right now!".

Now that sounds like the kind of problem every A&R department would love to have.

[Sgt. Baboon]

Ok, but that seems like the kind of thing that a decent sized client probably wouldn't bother with. Maybe the bottom feeders, but if a client is spending $10k+ for a web project, they probably accustomed to dealing with vendors and aren't too concerned with the Paypal protection.

Well, believe it or not, not every client is paying $10k+. If anything under 10k is a bottom feeder, then I'll take your bottom feeders off your hands.

I have had a client or 2 (bottom feeders I guess) that wanted to know if I took credit card. One used Paypal. I did not charge them extra.

[LiquidReflex]

I can see their desire with the recurring payments. If they have a monthly maintenance package and/or hosting that is billed monthly, I would prefer automatic payment as well instead of having to cut a check every month for the same amount. It probably wouldn't work for this client now, but perhaps you could work the recurring payment option building in for the fee and offering those that want to pay by check for 3, 6, 9, 12 months in advance a discount? That way, you aren't upcharging for the credit card ... instead you are discounting for check payment. Could be better perceived by your clients.