Big Cartel Theme Support

How do I manage my checkout (PayPal and/or Stripe) fees?

How do I manage my checkout (PayPal and/or Stripe) fees?

PayPal and Stripe both charge a relatively small fee per transaction to provide a first class secure payment processing interface for your customer, as well as protection, record keeping and funds management for you.

These fees are a business expense just like office supplies and services, shop front rental, Big Cartel account charges, etc. Like any business expense, your checkout fees should be considered when you are setting the price of your products.

For example, if you have decided to set the price of a t-shirt at $18.00 each before considering your checkout fees, you might then consider the highest possible fee to be applied to this product:

  • Say the average cost of your international shipping (i.e. the most expensive shipping) per product is $10.00
  • Adding the $18.00 t-shirt cost to the $10.00 shipping gives a $28.00 total
  • PayPal charges up to 3.9%, plus a fee - say $0.30, for international orders
  • 3.9% of $28.00, plus $0.30, gives us a maximum total fee of $1.39
  • We round the fee up to $1.50 and set our new t-shirt price to $19.50 each

This is an example only. PayPal and Stripe fees may be subject to change. Additionally, how you decide to incorporate your fees is up to you. You may have a very small percentage of international sales for example, so you can then base your calculation on the lower national transaction fees.

Can I just charge the customer the fees directly?

All online shops have a cost associated with their online payment processing and it is extremely rare (for good reason) to find a shop that does not account for this cost as detailed in the previous section, i.e. invisible to the customer.

You should never add a surcharge to your customer’s order to cover your checkout fees for the following reasons:

  1. This is a violation of the PayPal terms of service
  2. PayPal and Stripe do not provide any means to easily pass the transaction fee on to the customer
  3. Introducing this surcharge by your own means complicates the checkout process and increases the chance of abandoned carts if the customer is not expecting the extra charge or is put off by the extra complication

Can I provide a payment processing method that is free of fees?

All legitimate purchase payment processing methods have an associated fee and accounting for this fee is something that all online shops must do.

AarcadeHow do I manage my checkout (PayPal and/or Stripe) fees?