Home – New Forums Other discussions Bank fees/PayPal fees… Include in hourly rate?

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  • #983061
    kazz
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    Hi everyone

    I had a client ask for a discount today which is not unusual but they were already receiving a 10% discount for being a fan on fb. Which got me thinking…

    As they were going to pay via bank transfer (international) I would lose a bundle of $$ in fees so providing further discounts didn’t seem at all fair to me.

    I was wondering what do other soloists do? Do you factor bank/PayPal fees into your hourly or project rate or cop it on the chin? Are there any payment systems with low fees out there? Do you openly charge extra dependent upon how they pay?

    Also, is offering a discount for design services smart? Restaurants don’t offer a discount if you order more than 5 dishes… Curious what others think.

    I have a lot of international clients that pay via PayPal, but I still cop a nice fee each transaction (same with bank transfers).

    Thanks for any advice in advance.

    Karen

    #1140376
    Greg_M
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    I’ve always assumed, miscellaneous overhead is built into the price or rate.

    Maybe a “rider” in your conditions of contract for an “extra” if the transaction is international would be OK.

    #1140377
    Divert To Mobile
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    Hi Karen,

    I agree with estim8.
    You can publish your hourly rate or quote on a job then have a list of payment options. eg.
    TT – $35
    Paypal / western union 1.5%

    best of luck,

    Steve

    #1140378
    The Copy Chick
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    I know PayPal fees are a % of the transaction, but I can’t remember if bank fees are also a % or a fixed fee. Either way, perhaps building this fee into your rate would be the best way to go if customers have no other fee-free payment options.

    I guess it comes down to what you feel is right for your business. It’s much the same as charging separately for postage, or building it into your costs. Customers are generally happier to pay more and have no “extra” fees charged, than to pay less and but still have to pay postage/transaction/credit fees.

    #1140379
    TheGoldenGoose
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    Hi Kazz

    Am going to assume you’re a designer, if I’m wrong feel free to correct me! :)

    Discounts – don’t discount.

    Clients asking for discount – you need to wonder why this is happening, and it will have everything to do with your graphics/brand positioning and reputation. I am never asked to discount my prices anymore.. so something to consider.

    Paypal Fees – I don’t accept cheques, and I require payment by EFT. If the client wants to pay Paypal, I add the fees on top of this.. as it’s not a regular occurrence. If it was something that was more standard I would consider building it into my costs structure.

    Paypal fees are something like 2.4% + .30c for a payment, so that’s exactly what I’d say on the invoice when calculating the total.

    Hope that helps!

    #1140380
    bridiej
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    I don’t add anything on for PayPal, simply deduct the fees as a business expense.

    Re discounts, I offer a 5% discount if the client prepays (less risk/means I don’t have to worry about having to chase the debt) and a 10% “thank you” discount to clients who’ve referred a new client my way. I also have advertising on SourceBottle which offers a 10% discount off a new client’s first transcript. If there is a huge volume of audio (more than 5 hours) I also offer a small discount, although sometimes I bundle it with another one – for instance 10% if they prepay due to the large volume.

    I do occasionally have clients who ask for a discount (once had one who asked if I discounted for large volume but it turned out they only had 6 x 2 minute videos!) but unless they meet the criteria set out above, the answer is no. As you say, you wouldn’t go into a restaurant and expect a discount for ordering five dishes, so why expect one for a service?

    Edited to add: I did once have a (cheeky!) client who deducted the cost of bank transfer from my invoice (and it was in their local currency to a bank in the same country, not international so wouldn’t have expected any fees were charged?!) Now I have a clause in my T&C that says I’ll absorb all PayPal costs but the client is responsible for paying bank transfer costs.

    #1140381
    bluepenguin
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    I would:

    A. Add a Paypal/Credit Card surcharge. i.e. “Please add 2%/$10 to this invoice if paying by Paypal.”

    B. Add a few bucks to your hourly rate and forgot about it.

    If the majority of your payments are arriving via Paypal, I’d go with option B, as that will make it as simple as possible for you clients.

    If you’re running a serious business these days, being able to take credit card payments is becoming a necessary evil, so it’s good your taking action to minimise the impact on your business.

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