Paying Dealers F&F, Zelle, or paying other people on their behalf = is this normal? 0

[Dr. Balls]

I've been picking up art from a variety of places for awhile: auctions, Ebay, etc - and a few dealers. I started cruising around CAF and had inquired about two pieces from two different dealers. In both cases, I was asked to send payment via Friends and Family on Paypal or Zelle (with no purchase protection). When asked if I could send Goods and Services, I was given a few different reasons to why they don't accept that payment.

The two dealers on CAF seem to be reputable, have a big online presence and a large selection of work. I decided to try one out on a smaller page, so I sent it Paypal F&F. As a business owner, circumventing fees isn't really my thing - it's just the cost of doing business whether I like it or not.

My first dealer purchase from awhile back was through Paypal F&F from a very reputable dealer, so I felt it wasn't really going to be an issue - and it wasn't. I've bought from a couple other dealers with Paypal G&S, also no problem - but it seems that no fee payments are pretty common? Is this normal for most other people buying?

[Rick2you2]

On 9/29/2022 at 12:29 PM, Dr. Balls said:

I've been picking up art from a variety of places for awhile: auctions, Ebay, etc - and a few dealers. I started cruising around CAF and had inquired about two pieces from two different dealers. In both cases, I was asked to send payment via Friends and Family on Paypal or Zelle (with no purchase protection). When asked if I could send Goods and Services, I was given a few different reasons to why they don't accept that payment.

The two dealers on CAF seem to be reputable, have a big online presence and a large selection of work. I decided to try one out on a smaller page, so I sent it Paypal F&F. As a business owner, circumventing fees isn't really my thing - it's just the cost of doing business whether I like it or not.

My first dealer purchase from awhile back was through Paypal F&F from a very reputable dealer, so I felt it wasn't really going to be an issue - and it wasn't. I've bought from a couple other dealers with Paypal G&S, also no problem - but it seems that no fee payments are pretty common? Is this normal for most other people buying?

It isn’t rare. I generally offer to add the cost of the fees onto the purchase price. I would not, however consider F&F with someone from whom I was buying a commission unless I knew them personally. Too many horror stories.

[Dr. Balls]

On 9/29/2022 at 11:23 AM, Bill C said:

 

 

The only way art should be sold IMO

I would love to exchange money folded up in a newspaper for OA on a park bench with an art dealer.

[KirbyCollector]

On 9/29/2022 at 12:29 PM, Dr. Balls said:

I've been picking up art from a variety of places for awhile: auctions, Ebay, etc - and a few dealers. I started cruising around CAF and had inquired about two pieces from two different dealers. In both cases, I was asked to send payment via Friends and Family on Paypal or Zelle (with no purchase protection). When asked if I could send Goods and Services, I was given a few different reasons to why they don't accept that payment.

The two dealers on CAF seem to be reputable, have a big online presence and a large selection of work. I decided to try one out on a smaller page, so I sent it Paypal F&F. As a business owner, circumventing fees isn't really my thing - it's just the cost of doing business whether I like it or not.

My first dealer purchase from awhile back was through Paypal F&F from a very reputable dealer, so I felt it wasn't really going to be an issue - and it wasn't. I've bought from a couple other dealers with Paypal G&S, also no problem - but it seems that no fee payments are pretty common? Is this normal for most other people buying?

Paypal has stated they will be more closely examining use of F&F due to the new tax regulations surrounding payment services... meaning any incorporated business which abrogates their agreement with PayPal via abuse of F&F risks losing their ability to use the service. They also open themselves up to audit (yes, Paypal's fraud unit makes referrals to DOJ). 

I would avoid paying anyone -- other than actual friends and family -- with F&F. It leaves you with all of the liability, especially in the event the art is lost or damaged in transit. 

Edited September 29, 2022 by KirbyCollector

[Dr. Balls]

On 9/29/2022 at 12:17 PM, KirbyCollector said:

I would avoid paying anyone -- other than actual friends and family -- with F&F. It leaves you with all of the liability, especially in the event the art is lost or damaged in transit. 

Thanks, I was leaning towards that - I wanted to get some opinions. I think at this point, I'll probably stick with finding dealers who aren't asking for F&F payments and the auction houses. Hopefully this piece I bought will show up (I think that it will) - but I'm likely walking away from the other piece from the dealer who wants me to pay F&F to someone that is not himself. That just seems a little too odd.

[stinkininkin]

On 9/29/2022 at 11:39 AM, Dr. Balls said:

Thanks, I was leaning towards that - I wanted to get some opinions. I think at this point, I'll probably stick with finding dealers who aren't asking for F&F payments and the auction houses. Hopefully this piece I bought will show up (I think that it will) - but I'm likely walking away from the other piece from the dealer who wants me to pay F&F to someone that is not himself. That just seems a little too odd.

Well, regarding your last point, I can't tell you the number of times (dozens at least) that I have paid for a piece of art by paying a third party directly on behalf of the seller, whether it's PayPal or check or cash. It's super common in this hobby. Doesn't take a genius to guess why this is so common.

[Dr. Balls]

On 9/29/2022 at 12:51 PM, stinkininkin said:

Well, regarding your last point, I can't tell you the number of times (dozens at least) that I have paid for a piece of art by paying a third party directly on behalf of the seller, whether it's PayPal or check or cash. It's super common in this hobby. Doesn't take a genius to guess why this is so common.

Ok, I'll have to admit I'm no genius here. The only conclusion I've come up with is that they owe money to another dealer for art (like layaway or something), and they are selling stuff to pay for it - and maybe they are so bad with money, they can't trust themselves to receive payment and forward it onto the dealer they have layaway with?

The part I don't get - from a business standpoint - is that if you're a "dealer" and you buy from another "dealer", the art you buy can typically be categorized as your Cost of Goods Sold. Why complicate your bookwork in that fashion? Unless there's no actual bookwork being done?

[grapeape]

Friends and Family should be used for actual friends or family. You have zero recourse if the transaction goes awry. It doesn't have to be the seller deliberately ripping you off.The package could go to the wrong house, get lost or stolen.

Paypal will not help you if use friends and family.

I know legit dealers and collectors who have used FF to exchange  costs of trade differences etc. But I've made a number of private buys using PayPal the last two years and I've paid what's now 3.49% (2.99 in 2021) of the amount + .49 in 2022 on every transaction.

I simply won't risk losing all my money on a situation gone bad.

If anyone tells you they won't take FF commercial because of fees you can go to PayPal calculator and type in the amount. It will tell you from a sellers point of view if you want $1000 you have to ask for $$1036.67. So that means you just use the commercial (not FF) option and send them $1036.67. On their end they'll only get $1000 the difference goes to PayPal.

if you use commercial and don't account for the fees the seller only gets $964.61. That's a big reason why sellers don't want you to use anything other than FF.

Then of course you wouldn't be crazy to think a business transaction cloaked as friends and family might be to avoid showing a transaction. There's a big difference between me loaning or gifting $1000 to Aunt May vs. sending J Jonah Jameson $1000 friends and family for a income generating transaction.

 

[KirbyCollector]

On 9/29/2022 at 3:05 PM, Dr. Balls said:

The part I don't get - from a business standpoint - is that if you're a "dealer" and you buy from another "dealer", the art you buy can typically be categorized as your Cost of Goods Sold. Why complicate your bookwork in that fashion? Unless there's no actual bookwork being done?

Ding ding ding

No declared business income = no business income tax

[Bird]

I prefer dealers who refuse F&F, which is a sign they are a real and trustworthy dealer.

I would never 3rd party payment someone unless a friend, a real friend, is involved. Saw a play recently where it was stated...business is business. And for some people that means they can screw someone, it ain't personal it's business. (Yes it is a bit of a sociopathic viewpoint.) So don't be surprised when things get lost on loan, prices change between middlemen, and people disappear with money. It's business to them. Don't put yourself in a position to have someone give you da'business is my advice.

On 9/29/2022 at 3:05 PM, Dr. Balls said:

Ok, I'll have to admit I'm no genius here.

tax evasion

[Bird]

oh, greed and WANT are what lead people to making bad decisions they know they should not make. Let that voice in your head be a sign you are on shaky ground and cannot trust yourself if you proceed, hear that voice and step away.

[vodou]

On 9/29/2022 at 3:49 PM, grapeape said:

Friends and Family should be used for actual friends or family.

Anything else is fraud.

On 9/29/2022 at 3:49 PM, grapeape said:

Then of course you wouldn't be crazy to think a business transaction cloaked as friends and family might be to avoid showing a transaction.

This could be construed as money laundering and maybe conspiracy to evade taxes.

DYODD

[grapeape]

We have a well known art dealer here who bought a $5,000 piece of art this year from a CAF member in Europe. The seller asked for friends and family only and the dealer, seeing the seller had transacted a number of sales via CAF without incident, complied.

Weeks went by and no art. Many of us tried to help by emailing and leaving comments on the dead beat sellers CAF gallery.

Sadly that SOB just kept the money and the art.

Alright enough caution ⛔️ signs and speed bumps. Be careful out there.

 

[grebal]

On 9/29/2022 at 1:39 PM, Dr. Balls said:

Thanks, I was leaning towards that - I wanted to get some opinions. I think at this point, I'll probably stick with finding dealers who aren't asking for F&F payments and the auction houses. Hopefully this piece I bought will show up (I think that it will) - but I'm likely walking away from the other piece from the dealer who wants me to pay F&F to someone that is not himself. That just seems a little too odd.

Not directly related to paypal - the big (humongous) credit cards changed the rules several years ago - think it was 2018.  A lawsuit was settled, and the Visa/MC lenders agreed it was no longer prohibited for vendors (e.g. restaurant or comic book store) to add a surcharge (generally 3-4% based on the credit card fee imposed on the retailer) for customers who used plastic.  Or, alternatively, for those retailers to offer a cash discount for cash-paying customer by the same few percent.

Paypal not being party to the settlement can do whatever it wants, but it's policy is now firmly outside the practice of remainder of payment-card system.

It caught my eye when I went back to hell, I mean home, in NY, a few years ago when all the gas stations offered a cash discount or credit card surcharge.  And it seems like all the other retailers joined in the policy, too. The poor slobs, I mean my family and friends still living there could give more precise info.

But I've also since noticed some restaurants in Texas have adopted the same policy, and also saw a gas station that does the same (only it had a dime difference between cash/credit price though, not a % based amt like the rest I've mentioned).

Edited September 30, 2022 by grebal

[The Voord]

As a collector who sometimes sells art, I request F&F or an additional amount to cover paypal fees I'll get stung with if G&S is insisted upon.  I always state up front that F&F is the risky option and that G&S comes at extra cost.  Bottom line is that my ask prices are met in full

Edited September 30, 2022 by The Voord

[skrilla1212]

Does Paypal Goods & Services always hold the money in escrow essentially until the buyer confirms receipt?

I've bought a number of pages from collectors I'd reached out to (never met) on CAF, and historically either sent a check, or paid F&F. Recently I bought a piece from a collector overseas and due to stories on here and on Facebook I figured I should be more responsible, and insisted on Paypal G&S. The seller wasn't enthused, but we did it. I was surprised to hear from him that Paypal held all the funds until I confirmed receipt.

Setting aside that it's the proper way to use the service, I thought that was a little too skewed in the buyer's favor. I could see how susceptible that could be to bad actors that claim the art never arrived, as well as driving the buyer to pay out of pocket for packing and shipping and sending out a valuable item without seeing a dime. I always expect to pay before an item is shipped.

Anyway, was curious if that is how it always works, or maybe it was due to both parties using it the first time. It didn't make me feel great as a buyer, and I'd feel even worse as a seller. Seems like there should be some middle ground of coverage.

 

[Dr. Balls]

Just as an update - my CAF guy I bought that art from via F&F showed up today, everything well and good. 

[Will_K]

On 9/30/2022 at 9:19 PM, Michael Browning said:

100% TRUE STORY

Booth or counter ??  Will the art ever appear on CAF... giving us a clue to the creator ?

[Michael Browning]

On 10/3/2022 at 3:19 PM, Will_K said:

Booth or counter ??  Will the art ever appear on CAF... giving us a clue to the creator ?

“Booth or counter?” Help me out, because I don’t know what that means.

And, yes, both pieces are in my CAF gallery.

[Will_K]

On 10/3/2022 at 10:17 PM, Michael Browning said:

“Booth or counter?”

Booth or counter at the coffee shop ??  Or maybe you sat a table for the hand off ??