A number of Gittip funders were charged $10 this week, even though they are only tipping a few dollars or even a few cents (for people who set up tips before the tip structure changed). I should have done better to announce the reason for this ahead of time. Sorry about that.
The reason you were charged $10 is to minimize processing fees. You are paying a 3.9% + $0.30 fee each time we pull in money from your credit card, nearly all of which goes to our payment processor. If you’re only tipping $1.00 then you were being charged $1.36—a 36% fee. By pulling in $10 at once we only have to charge you a $0.68 fee, which turns out to be 7% of the $9.32 that is actually credited to your Gittip account.
We hope to implement Dwolla to reduce these fees even further, but while getting started we thought it best to implement credit cards first since they’re much more widely adopted.
The extra money we pulled in this week will be used to fund future gifts. You can see a detailed record of your credit card charges and gifts on the History page linked towards the bottom of your profile.