Venmo is a popular money transfer app known for splitting bills with friends and sending quick payments. In addition to being a payment service, Venmo offers a buyer protection program for customers looking to make purchases securely through their Venmo profiles with a feature called Goods and Services.
This guide compiles everything you need to know about Venmo Goods and Services, including the fees, pros, and cons, to help you decide whether it's a good fit for you.
What are Venmo Goods and Services Protection?
Venmo offers the option to tag a payment as "Goods and Services." This adds a layer of protection for both the buyer and seller through Venmo's Purchase Protection Program. If you encounter issues with your purchase, such as not receiving the item or the service not being delivered as described, you may be eligible for a refund.
Suppose you're a business looking to offer your customers this protection. In that case, you need to be explicitly authorized to accept Venmo for purchases and if you're a customer, you need to make sure you're buying from a business profile or you've tagged a payment to a personal profile as a purchase to be covered by this protection.
Who Pays the Venmo Goods and Services Fee?
When a payment is tagged as "Goods and Services," the seller incurs a fee. This fee is currently 1.9% of the transaction amount plus $0.10. The fee is automatically deducted from the total amount the seller receives.
How to Turn On Venmo Goods and Services
Venmo Goods and Services aren't actually a separate feature to turn on or off within your profile settings. Instead, it's an option that appears during the payment process itself. Here's how it works:
- Open the Venmo app and start the process of sending money to someone.
- Before you hit "Pay," you'll see a note section and potentially a toggle or slider labeled "Turn on for purchases" or something similar.
- If you're buying something and want the purchase protection, slide the toggle to the on position (usually indicated by a green color). This enables Venmo Goods and Services for that specific transaction.
When you enable this feature, you're essentially informing Venmo that this payment is for a good or service, and the seller will incur a small fee. You can choose to turn it on or off depending on the situation.
Should You Use Venmo Goods and Services?
Before using the Venmo Goods and Services feature, consider these pros and cons to help you decide:
Pros:
- Purchase Protection: For both buyers and sellers, this program offers peace of mind in case something goes wrong with the transaction.
- Convenience: Venmo is a familiar and easy-to-use platform for many people.
Cons:
- Fees: The seller fee can eat into profits, especially for smaller transactions.
- Limited Protection: Venmo Purchase Protection doesn't cover everything, so be sure to understand the program's terms and conditions before relying on it solely.
- Not ideal for large transactions: Due to the fee structure, Venmo might not be the most cost-effective option for expensive items.
Alternatives to Venmo Goods and Services
Venmo Goods and Services aren't always convenient for everyone due to for plenty of personal reasons. However, if you really need to be covered by a buyer protection program, you can consider these alternatives.
1. Open a Venmo Business Profile
If you frequently sell goods or services, consider a Venmo Business Profile. It offers features specifically designed for businesses, including separate transaction histories and waived fees for eligible business purchases.
2. Use PayPal
PayPal is Venmo's parent company and it offers a more flexible buyer protection program than Venmo does and is probably one of the best out there. You can use this protection program in case you need to get covered for a wider range of purchases.
Final Thoughts
Venmo Goods and Services can be a convenient option for buying and selling between friends or acquaintances. However, it's important to weigh the fees and protection limitations before using it for every transaction. Consider the value of the item, and your relationship with the buyer/seller, and explore alternative platforms if needed. By understanding the ins and outs of Venmo goods and services, you can make informed decisions and ensure a smooth buying or selling experience.