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No best answer has yet been selected by bradleyy. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.I don't believe it is illegal to stick a surcharge (adding 4%) on your end price if you are selling the item in the UK - surcharging for credit cards is illegal in America, so I assume this confusion occurs when people from the US have complained.
If you are selling the items available only to the UK, then charge Paypal fees - if you are looking at selling abroad, you charge any postage rate you want, so you can add the paypal charges into that!
I have used Paypal (i'm guessing here) aroung 70 times for both sending and receiving payments - no problems so far (touch wood).
They are also regulated by the FSA (Financial Services Authority) in the UK so there is someone else to complain to if you have problems with them
All the previous replies have valid points (I've been trading on eBay and making/receiving PayPal payments for several years) but the thing to bear in mind is that providing no fraud takes place (I have no experience of this, so I can't comment), despite the eBay and PayPal fees, you will still make money on things you were only going to bin or send to the next jumble sale anyway. eBay's quite exciting sometimes, because if you have something a bit different from the norm to sell, it attracts a lot of attention - and if you want something a bit different it's there!
I would say go ahead and register, try it on a few smaller value listings to begin with and see what you think. It's a bit daunting registering bank account and credit/debit card details online with a company you don't know, but in this instance you can rest assured that they are a kosher company (PayPal and eBay are sister companies). If you feel uncomfortable using PayPal once you've tried it, you can always delete your details and close your account.
Good luck.
A couple of responses to what has been posted earlier.
Wizard:
Using Paypal doesn't guarantee you to a full refund, only if the item qualifies for 'Paypal Buyer Protection' will you be guaranteed a refund, and then only if certain conditions are met (ie item must be a physical 'thing', so some of the typical scams such as link sellers on phones / ipods would not be covered). If no Paypal buyer protection then they will only refund what they can recover from the sender's account, also you are limited to 3 such disputes a year
Many Seller's won't take Paypal these days as the odds are stacked in Buyers favour, in order to be covered in the case of chargebacks then the sale first needs to be eligible for Seller Protection (which you don't know until after you've received the payment), + various other requirements.
In general Paypalis fine for Buyers,but as a Seller take Nochex instead you are GUARANTEED you won't lose money to chargebacks + its hell ofalot cheaper