Why “Payment as Gift” is a Bad Idea

Written on January 30, 2013 at 12:00 pm by Michelle
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If you look at any number of threads where people are selling things these days, many people are asking that you send payment as “gift” or to add on 4% of the purchase price to cover the fees that the sellers will end up out of pocket for. For small things, it may seem like, ehhh, why not? 4% of $10 is only $0.40, after all. What if you were paying for a custom doll though? Let’s say that the doll is $500 (shipping included – a bargain by today’s standards) – that doll would be $520. And why should you, the buyer, be responsible for another $20 when you’re already paying $500 for a doll and shipping?

It’s the norm now for sellers to ask for this – payment as gift or adding on the fees associated with using Paypal’s services.

Pros for the seller:

  • They get the full amount that they priced their item at

Cons for the buyer:

  • There is no recourse if something goes wrong and whatever it is that you bought goes missing – Paypal assumes you’re telling the truth when you say it is a gift and not payment owed
  • The seller does not have to prove to Paypal that they really sent whatever it is that you bought
  • You’re out an additional 4%

Additionally, Paypal frowns against users violating their Terms (you know, the ones you agreed to when signing up/registering an account). By sending “payment as gift” when the payment is not a gift, they don’t like that very much. So you could put yourself at risk for having your account suspended – especially if you’re the seller and the one having people send you ‘gifted’ money all the time.

Secondly, a lot more people nowadays in the Blythe community are frowning on those who request ‘payment as gift’ and are actively avoiding purchasing from those that do that on their sale threads. I get that it’s tempting to have someone else pay your fees for you, but that’s part of the cost of doing business. If you really want to not have to pay the fees, you can just add the fees into the overall cost of the item itself. So if you’re selling a dress for $9 and don’t want to pay the additional fees for it, just do a little math to figure out how much you should sell it for. That way you end up with the amount that you really want and the cost of fees with using Paypal come out of what you asked for from the buyer. Another bonus of receiving payment for goods through Paypal is that, if you wish to print out shipping labels directly – you can! If the buyer pays as a ‘gift’, you’re not given that option because the money was a ‘gift’.

Lastly, there are people who do get burned (badly) from having paid for things (sundries, dolls) as a ‘gift’. This results in Bad Dolly Deals and public shaming in the community from the BDD. But, of course, it is always a good idea to find out if someone you’re dealing with has ever had a BDD written up about them and, if so, how was it resolved.

Much like the saying that ‘good fences make good neighbours’, there’s also ‘protecting yourself in a sale makes for less Bad Dolly Deals’.

One Response to “Why “Payment as Gift” is a Bad Idea”

  1. Jessica AKA @sewdosomething

    In my former life I was an Accountant. If the seller is running an actual business and files taxes (in the US) then they are eligible to claim their Paypal fees as a deduction. By having someone send extra money for that fee they are doing what the IRS refers to as “double dipping.” Not to mention they just increased their income category which is taxed quite significantly and the less deductions you have the more of your income that is taxed. So it might be a momentary up for them, but in the long run it’s a lose-lose situation.

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