I just spent a few days haggling over a DAC w/ a dealer. CC was not his preference, and no discounts would be offered if i insisted. I refuse to use PayPal friends and family as he requested or PayPal in general anymore, that is my personal choice and i would rather pass up on a deal than use any service beyond Zelle or traditional bank and CC payments.
We settled on a bank transfer, neither of us felt like dealing w/ a mailed check.
I have seen more and more used items for sale where PayPal is not an option from the seller any more.
I have been trading, purchasing and selling on various hobby oriented forums since 1989. I used Paypal for the first time maybe 2 years ago, it’s not a big loss to me, yes it was convenient but i have been paying using money orders and checks for decades. I still own envelopes, stamps and a checkbook. EFT and bank checks are also a familiar form of payment for me, especially on larger purchases.
Have the new tax implications changed your hobby oriented purchasing and selling habits?
I know many people benefited from the extra security PayPal goods&services offers. Never in 30 years had i ever accepted a return or had the opportunity to return a used product. As a hobby enthusiast, that simply was part of the risk you took purchasing used goods from strangers on the internet. There used to be honor involved and your good word in trading and exchanging goods honestly. PayPal took the guess work away and forcefully initiates an actual business exchange effectively turning a hobbyist transaction into a proper business transaction. Funds can be withheld, proof of delivery and receipt required, funds taken direct out of your account and other business style actions.
My recent experience with a full fledged dealer, of expensive high end audio equipment, got me thinking and I’m curious if anyone else has any opinions or stories.
I’m of two minds on this, as PP really made it “safe” for people to deal in a business transaction where the potential for fraud is huge and without their intermediary service, you were really on your own.
Growing up in the NYC area teaches you to always be a little sus. If you do your homework, confirm the people are the genuine owner of what they’re selling and you get a means of communication that you feel comfortable with. IMO a phone call is your best friend.
I have to say I’d much rather deal in a closed community such as we have here because it allows the transaction to be about the hobby and not be worried about the always potential scam.
This is interesting as in Europe it is very much a convenience with few downsides to use Paypal. I use it way more to pay online shops than payments to private individuals. Part of this is a generally different payment culture.
Cheques pretty much no longer exist here at all, phased out about ten to twenty years ago in favour of debit cards with pin numbers. Things like Google Pay that use smart phones don’t really exist other than direct transfers using QR codes - for example many online stores offer Paypal or direct bank transfer using QR code and banking app. Since our banking systems started using a unified transfer and bank account identifier system a couple of years ago places like Amazon have just gone with pre authorized standing orders.
Also EU here, I wouldn’t know how to make these online deals with individuals without Paypal. Before paypal it was a pain and you had to travel and do the deal in person to protect yourself from scamming.
People are usually very understanding about wanting to build in some safety, if they have concerns about the fees I offer to pay them, that’s the cost of a safety net. If they’re still reluctant and want to use friend and family or bank transfer, sorry, no deal.
So o have a question to anyone that knows more about this than me. When I first heard of that issue I didn’t know what to make of it. But essentially if you buy something and sell it for more I know that you would have to pay some sort of thing due to you making money off it. Also if you sell something are you charged more taxes or how does it affect everyone? Tbh I barely know anything about ive been feeling like it’s the end of the world. I was like anything that I gotta sell I should do it nos before that takes effect lol.
Also as you mentioned about buying used there are certain risks one might take to get a sweeter deal, honesty I’m happy about PayPal existing for customer protection but then there’s the other side. Like Amazon it can fuck the seller over, the first bifrost I sold before went to some dude from reddit and he claimed it arrived in bad shape this and that and I ended up losing around 300 dollars on it. Sometimes I wonder if buying used should only be done in person where you can really make sure everything is in perfect condition, make sure to take the business side out of it etc and then you are also responsible for its transportation during your drive back.
Forgetting the bad experiences I’ve had, I’ve had way more positive experiences buying and selling online too tho. Like you mentioned it’s just one of those risks.
The tax implications are minimal for folks like you and i who buy and sell sporadically. It’s really a moot point, if anything we are talking nothing to peanuts in reference to the IRS.
The fee structure of PayPal has not changed at all, the added cost to both seller and buyer added enough benefits to make it worthwhile.
I’ve seen plenty of adds lately though refusing to use PayPal and it made me laugh simply because it has many folks going back to the traditional way of doing business which was slow and cumbersome. It also exposed the reality of used purchases, when not dealing with an established business you have no to little recourse and protection. This was always why the warranty period on new products kept the value up in my opinion and reduced the worth of used gear. There are also less and less brick and mortar businesses servicing used gear nowadays local to many which adds further frustration to the whole experience.
This thread was not meant to make anyone worry, there are plenty of ways still available to exchange funds that work out for each party. My recent interaction though got me thinking of multiple topics. Price hikes, IRS, people reacting differently to each situation…blah blah blah
Just something more to discuss for a while, there are plenty of folks who love PayPal, nothing much will change jst some added paperwork to file.
Am I right in thinking that your tax system now wants you to report income via paypal regardless of how much it is and whether or not you are in business?
Hello,
I can understand.
Because Paypal is no longer what it used to be.
Occasionally I sell things in the classifieds and it’s become quite disgusting.
When I offer Paypal there are still some people who are so cheeky and complain about it and ask for their money back without getting the item back.
This happened to me 2 times.
And Paypal still agrees with them and reinforces this behaviour.
That is not right.
Paypal decides just like that, without asking for pictures or in any other way.
I only use Paypal to pay or trustworthy people where I have no concerns.
In the meantime, there are also problems with the shipping service providers.
For example, Paypal recognises it when you have paid online with Paypal and the shipping company has delivered and the parcel has remained untraceable. You have little chance of getting the money back because Paypal says delivered is delivered.
This happened to someone in Germany who had bought 2 limited editions of the Xbox and had them delivered to a different address.
Microsoft was nevertheless so accommodating and even investigated again that he then got something else for it.
Now turn this behaviour around into private people or small traders who don’t have the power to use the possibilities to check it.
Apart from that, paypal works with your credit that is in the credit until you use it up.
Paypal has also opened the doors for more scams.
The seller is the stupid one in the end no matter what they do.
There is no such thing as honour anymore.
That’s why the only security is the classic bank transfer.
Many traders have also banned Paypal from their shops precisely because of such things.
In Germany, you can find more and more classic payment systems.
Which I can understand.
Honestly I’m not sure yet what the tax implications will be for folks. I know many people on various platforms have turned hobbies into small businesses and use their creative talents to help support their themselves. Uncle Sam has always been a bit confusing in how each state is treated in cross state transactions and the us tax code is so massive and has so many ways to deal with each individual case it’s very complicated in my opinion. I do what’s best for myself and seek professional help when the situation warrants it.
I’ll know better in a month or so when tax papers start arriving and I fire up my tax software to deal with my own taxes if anything has much changed for me personally.
I know that now any transaction of 600 and up will be reported to the IRS. Now then I do not know whether that will be bad during tax season where I will recieve less money back or for people that make more money if they will have to pay more money back on taxes. That seems to be the biggest worry. Also originally I heard same would happen for direct transfers, basically anytime you send alot of money to anyone the IRS will be watching typr of thing. A bit of a invasión of privacy too in some cases so that’s another thing.
It’s interesting how these things are also cultural. When I moved to Belgium from the UK I was disturbed by how much information the state was able to store about me all linked via an identity card. This is something that UK people are very much against. Having lived here for more than a decade I’ve changed how I think about it, partly as the benefits outweigh the negatives here in terms of joined up healthcare records, easier tax returns, all kinds of little things.
So it is relatively normal to me that Paypal would be asked to report transactions. Not least because we have a cheerfully inefficient and mildly incompetent state bureaucracy so blind eyes are turned for small things as long as you don’t take advantage of the rules. It’s quite relaxing. It’s hard to imagine our government being competent or organised enough to do nefarious things to us so no one worries about it too much
That’s VERY true. PayPal cares alot about the buyer but not the seller. Tbh it’s only really protecting the buyer. I feel 1000% safe when I buy used, but I think twice about selling now since I had that experience. Although again I’ve had more experiences than bad so far
Thanks for the write up Deleeh. Not only what I quoted but the rest was very informative and makes alot of sense too! Specially the delivery thing you mentioned, never thought about that. Also if you have a third party during a transaction aka PayPal whne you buy from a store etc it can be a bit of a pain
I’ve been having to use PayPal to pay for everything recently since I currently don’t have a debit card. Still gotta call chase and thanks care of that lol
In principal, it’s not a taxation change, it’s just a reporting change.
However in practice depending on what the IRS wants to do with it, it could be a giant pain in the arse.
Basically if you but anything, then sell it for a profit, you owe capital gains on the difference, similarly if you sell it at a loss, technically you can claim that as a credit (to a point and for most people it isn’t worth it).
But to do either of those you need a cost basis i.e. what you paid for the item, the IRS could ask for proof of that if they want to be difficult. In practice in the past I’ve found as long as it’s close they don’t care.
What changed is the point at which Paypal and other online “banks” have to report that, it used to be if you accrued more than $20K in payments they had to file that with the IRS, that number now is $600. It closed a loophole where small online businesses were in effect operating without paying taxes. But it directly impacts anyone who sells anything online.
The problem with it being reported is you now have no choice but to go through the paperwork for all the transactions. How much hassle that is remains to be seen.
Not unique to Paypal, one of the reasons I always used to use an AMEX card is AMEX almost always sided with the card holder. Dispute a payment and the transaction is immediately reversed, and the seller has to prove they provided the service or goods.
Almost all major Credit Cards do that now, because they are all backed by Banks, and banks have significant leeway to reverse transactions.
As an anecdote, I had someone steal a check for ~$5000 from my mailbox, they washed the check and rewrote it to themselves. Luckily the guy who was supposed to receive it contacted me and let me know he hadn’t. When I checked it had been cashed at some check cashing place.
I spoke to my bank, because the transaction was less than a week old they simply reversed the transaction, money was back in my account in less than 20 minutes, I didn’t even have to file paperwork (I did have to change bank account numbers which was a giant pain in the ass).
Think about the implications of that, the bank wasn’t out $5K, the guy that owned the Check cashing place just didn’t have it in his account anymore. Think of what that means in terms of sellers trusting payments.
That’s a particularly good story. And a reason I have used direct bank electronics fund transfers for years especially dealing with larger purchases. If there is a way to reverse bank to bank transfer in US banks I have never had the misfortune or experience. Safest way to do business when dealing in excess of $10k. IMHO.
Only 1 bad PP experience. I sold a guitar amp that got destroyed by the courier. Like the 1/8 steel chassis was bent and crimped. The amp still worked but it obviously wasnt as i advertised. I was alerted to this by the guys wife calling me and making threats on my life with no explanation then him more timidly leaving me messages from the same number demanding his money back, once again with no explanation. I finally got him on the phone where he asked me why i sent him a bent amp, where he finally sent pics and then it was obvious the courier F’ed up. But before i even knew the PP funds were frozen.
Thankfully I had full insurance. But that was a pain. I always take pics of the item right before packing and ones showing the packing itself and it paid off. I also had to get a note from the amp maker stating value and saying yeah, thats a huge hit or drop to cause that damage.
PP never gave me the money back, but i got the insurance and the bent amp back, which i then sold for half price. So small gains.
Also on the buys side, keep the packing material if there is an issue with delivery. The couriers always seems to want that or they will use it as an excuse to void insurance. Tbh they will look for any excise to not cover it.
You are the only person I know of to ever manage a successful claim for damage from any of the major couriers, they usually pay up for losses, but damage claims are really hard to win even if you insure.
To be fair to PayPal, that’s what’s supposed to happen, the onus is entirely on the seller to get something to you as described.
I had an eBay transaction, where I received a broken power regenerator, the seller had tested it before shipping, no obvious damage to the packaging. eBay froze the funds, forced the seller to provide a shipping label for the return, and refunded all the funds to me once the seller received it,
So the seller ended up with a broken regenerator and eating shipping both ways, it’s just how it works.
While not untrue, PP refused to speak to me about anything. Once the claim was through I dropped it and sent the refund myself. I ate shipping but got my money back. It was a long few weeks. I think the frustration comes in when there is a claim and you cant even add info form your side. It was in holdings for weeks waiting for the buyer to submit their claim hoping it times out.
Yeah. Im thinking the bent steel chassis was so blatant that there was no avoiding it.
My guitar building friend has shipped guitars for years and has shipped all over the world. He always brought the guitars to the shipper’s store and packed it there to their specs. All full flight cases with at least a foot of packing on each side. One of his guitars came back annihilated. A $30k jazz box hollowbody cracked neck and all. He tried to put in a claim, and they denied it. It was his pal that worked in the store he packed and shipped it from and even with pictures and his employee testimony they denied it. I think it was something dumb like the packaging was tossed out by some people that were doing work at the buyers house (thinking they were helping clean up) but that tbh is fucked.
