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Can Upwork charge the fees?

suznee
Community Guru

I ask this in the announcement section, but it got lost in the 80 pages of complaints. I really would like a response from Upwork on this. 

 

I am curious if Upwork is aware that it is banned in some states to charge a checkout fee? 

 

Quoted from cardfellow.com

 

States Where Merchant Surcharging is Banned

If your business operates in any of the 10 states (CA*, CO, CT, FL, KS, ME, MA, NY, OK, TX) whose state laws prohibit surcharging, you may not charge checkout fees in that state. However, if you do business in multiple states, you may still surcharge credit card transactions in those states where the practice is not banned.

 

Hawaii, Illinois, New Jersey, and Rhode Island all have legislation pending that will ban surcharging if passed.

 

- See more at: https://www.cardfellow.com/checkout-fees-charging-credit-card-fees-to-customers/#sthash.AmdHkl5J.dpu...

 

* As of March 2015, courts in the state of California have ruled that the ban on surcharges is unconstitutional. The Attorney General has filed an appeal, but while that is in process, a surcharge ban cannot be enforced. However, California does have laws that still apply regarding deceptive pricing, so you may want to consult an attorney if you're considering imposing a credit card surcharge on a business operating in California. More information is available at the Office of the Attorney General of California's website. - See more at: https://www.cardfellow.com/checkout-fees-charging-credit-card-fees-to-customers/#sthash.AmdHkl5J.dpu...

 

Debit cards are also not allowed to be charged. So how are you going to handle when someone uses their debit card to make a payment?

 

Also Paypal for instance states in their terms:

 

4.5 No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions. 

 

https://www.paypal.com/webapps/mpp/ua/useragreement-full

 

Seems to me it is surcharge rather than a handling fee ... but I am sure Upwork has decided it is a handling fee.

 

Also a comment made in another thread:

 

Vaclav S wrote:

Posting this to draw some attention to it: the new 2.75% fee on all payments is even worse, because it is non-refundable. Support told me so when I asked:

 

Q: "If you refund a payment (due to cancelled contract), do you refund the 2.75% fee as well?"

 

A: "I have verified that information for you and unfortunatelythe 2.75% processing fee will not be refunded."

 

https://community.upwork.com/t5/Clients/Charging-me-to-make-a-payment-Are-you-kidding/m-p/191405#M98...

 

 

 

Don't keep checkout fees when refunding customers. When issuing refunds, you must also refund any checkout fees that were charged — even for partial refunds. For example, if you refund 50% of a customer's money, you also have to refund 50% of the checkout fee you collected. - See more at: https://www.cardfellow.com/checkout-fees-charging-credit-card-fees-to-customers/#CheckoutFeesvsConve...

 

Here is some other links about charging a checkout fee or fees 

 

CREDIT OR DEBIT CARD SURCHARGE STATE STATUTES

 

Eleven states—California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas—and Puerto Rico have laws that prohibit merchants from charging consumers with surcharges on credit card transactions. Minnesota prohibits a seller of goods or services that establishes and is responsible for its own customer credit card from imposing a surcharge on a purchaser who elects to use that credit card in lieu of payment by cash, check, or similar means. The laws in California and New York have been challenged in court.

 

http://www.ncsl.org/research/financial-services-and-commerce/credit-or-debit-card-surcharges-statute...

 

I would like to know how Upwork is going to handle this since they plan on charging the clients a fee for each transaction. I would also like to know if the fee applies to each freelancer they pay or if it is based on the weekly payout to clients who have multiple freelancers.

 

32 REPLIES 32

re: "As of March 2015, courts in the state of California have ruled that the ban on surcharges is unconstitutional."

 

Rock on, California.

 

And thank you, Suzanne, for posting this.

 

I say: The fewer laws that prohibit companies from innovating and competing to offer goods and services to consumers and citizens, the better.

 

I want companies to have the freedom to do REALLY STUPID things, so that consumers have the freedom to go to the competitors of those companies.

 

I want individual consumers to have the freedom to do business with companies that do REALLY STUPID things, because I want freedom.


@Preston H wrote:

Just remember: The "law" is just stuff that people made up.

 

So I can ignore the stop sign on the corner, which is just something somebody put up.

 

If Upwork wants to change its business practices, and those changes would put it conflict with that law, then it is likely it is the law that should be changed or retired.

 

Because a privately held company knows what's better for the citizenry than our elected representatives, for each and every business decision it makes?

 

There are too many laws impacting business, or in other words, there are too many laws which unnecessarily restrict personal freedom.

 

Predatory or fraudulent behavior on the part of corporations is equivalent to personal freedom?

 

How would you feel if you have a blog site, and the government tells you that you can no longer post blog articles written by unlicensed writers? Or that you can no longer express your opinion about government officials on your website or on Twitter?

I would feel terrible. Which is why I am glad that freedom of the press is guaranteed by force of the Constitution, the supreme law of the land.

 

Freedom isn't really meaningful unless it includes the freedom for people to say and do really, genuinely terrible things.

 

Let's empty the prisons, then. Freedom for all!

 

I'm not against government or laws, but I'm definitely opposed to unnecessary laws, such as any law which would dictate the minutia of business practices by companies who exist only if people support them, and are thus easily eradicated simply if customers cease to do so.

Any law? So sawdust in the bread, and rat **bleep** in the sausage, is fine by you. Because the market solves all. Because the purveyors of sawdust and rat **bleep** in our food will be sure to let us know that's what we're buying.


Geez, Preston, I thought you were a LIbertarian, not a nihilist.

 

Best,

Michael


@Preston H wrote:

 

....I regard this as legalism, and I don't think it is helpful to me, to Upwork, to the community of site users as a whole, or to society.

 

I would hope that people would respect the free market system and respect Upwork enough to not suggest that Upwork is breaking that law or that it would matter if it did in a matter such as this. 


Preston,

 

I have no wish to blast you. I must demur from the position that there are matters in which it does not matter whether a corporation breaks the law, or that respect for the free market system and Upwork should outweigh respect for the law.

 

Having been raised Catholic, I perfectly understand the pitfalls of legalism. I submit that law and legality, the subject of this thread, are indeed helpfulto Upwork, the community of site users, society, and even you.

 

Best,

MIchael

Michael:

 

You and I agree more than we disagree.

 

I don't agree with the conclusions you are drawing from my statements. Your conclusions are not supported by the text of what I wrote. I don't have time to reply to everything, but I'll just take the first example:

 

I said: "Just remember: The 'law' is just stuff that people made up."

 

And then you said:

"So I can ignore the stop sign on the corner, which is just something somebody put up."

 

No, I don't agree with this conclusion at all.

 

My statement is obviously true: The laws we're talking about are human constructs. They ARE stuff that people made up. You can not state that because I made an observation that laws were written, created, formulated entirely by people, and are not "laws of physics" or something of the like, that this means people can simply ignore laws.

 

You don't believe that, and I don't believe that either.

 

When I say the law is just stuff people made up (which is true), I'm putting laws into perspective: We can draw certain conclusions from such a fact: New laws can be made. Laws can be rescinded. Laws can be created that are flawed.

 

The logical implication is not: People don't need to stop at stop signs, nor does this imply that peole should ignore laws.

 

In fact, the very next sentence states bad laws should be changed or retired. How did you come to the conclusion that I'm saying the entire concept of law should be ignored entirely?

 

Okay, one more example:

I said: "Freedom isn't really meaningful unless it includes the freedom for people to say and do really, genuinely terrible things."

 

You then said: "Let's empty the prisons, then. Freedom for all!"

 

What on earth? Where did that come from? I think prisons are great. There are a lot of bad people who have broken laws who are not in prison who I think should be.

 

I don't want people to do bad things. But I don't necessarily want all bad things to be illegal. I'm assume you feel the same way. There are bad words that people shouldn't say. But I don't want to lock people up in prison for saying those words. A father might promise to take his son to a baseball game and never show up. It's heartbreaking, but I'm not going to support making this illegal and locking people up for it.

 

So, in conclusion....

 

I think you mean well, but seriously, nothing in what I wrote supports the conclusions you are drawing from my post.

lomen_jan
Community Guru

This thread is awesome read. 

I wonder what Upwork stance is on this.

I don't believe they will bother to answer, but again, I'm absurdist (or nihilist with sense of humor). 

All right, I'll weigh in with a short answer but I'm not willing to do the actual research to back it up, so you'll just have to take my word for it (or not).

 

The statutes being referenced are not applicable to the processing fee that Upwork has proposed. As has already been mentioned, the key to determining applicability is the definition of the terms. The statutes being referenced were designed to address a specific issue regarding consumer credit transactions and banking services. 

re: " I submit that law and legality, the subject of this thread, are indeed helpfulto Upwork, the community of site users, society, and even you."

 

I have no disagreement with that at all.

 

Laws are helpful to Upwork, the community of site users, society, and me.

 

I think there are broad points of agreement between us.

 

But I think there are too many laws restricting people's freedom. I think that society would benefit from rescinding many laws.

 

Maybe you don't agree with that. I don't know.

 

But that's different from saying that all laws are bad or that people don't need to obey the law.

I believe that Upwork is essentially charging a convenience fee, not a surcharge.  

 

"Conceptually; the cardholder is not paying a fee for the privilege of paying by card, but rather for the convenience of being able to make payment from the comfort of their living room"

 

I'm pretty sure that Upwork would prevail in court.  I'm also pretty sure that their California lawyers already reviewed this.


@Mary W wrote:

I believe that Upwork is essentially charging a convenience fee, not a surcharge.  

 

"Conceptually; the cardholder is not paying a fee for the privilege of paying by card, but rather for the convenience of being able to make payment from the comfort of their living room"

 

I'm pretty sure that Upwork would prevail in court.  I'm also pretty sure that their California lawyers already reviewed this.


Pretty much this.  ↑ 

Mary nailed it!

 

thumbs-up-1[1].jpg

suznee
Community Guru

Sorry, but renaming it does not change things.

 

The act of charging customers a fee to pay with their credit card is commonly referred to as checkout fees, convenience fees, or surcharging and each of the four major card brands has a slightly different policy concerning the topic. - See more at: https://www.cardfellow.com/charging-customers-a-credit-card-convenience-fee-at-check-out/#sthash.DuJ...  

 

A convenience fee is different from a surcharge, which is an added charge for the privilege of using a credit card instead of a debit card or cash. Upwork offers no such alternative to pay with check, money order or cash.

tlbp
Community Guru

Well, Suzanne maybe you can be the lead plaintiff in the class action suit. As for me, I'll stick to what I know.

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