Predictit charges a 5% withdrawal fee, presumably because they incur Admin fees to "Cut-a-check".
That's an exorbitant fee by any measure...and further...who the hell issues checks anymore. This is a game stopper!
Exactly, 5% fees are extremely high, please implement a direct deposit to bank account or something but the withdrawal fee is just too high
As I stated in another post:
I have an extreme desire to trade, hence I opened an account, but overall, online betting is a bad deal. If you lose, you get $0, but if you win, you get 15% in fees, plus federal, plus state taxes. My fees & taxes overall would be over 50% of my earnings. Hence the downside is twice as large as the upside. It only makes sense to invest if you are confident you will be right at a 2:1 ratio. The vast majority of people will not reach that level. Nonetheless I am grateful to PredictIt for providing this service.
Shak, I'm afraid the fees would be more onerous than given in your example. Here's one of their two statements on fees:
Any time you sell a shares [sic] for a higher price than you paid, we charge a fee of 10% of your profit. There is no fee if you sell your shares at the same price that you paid or a lower price. There is also no charge to open an account with us or to deposit funds via credit card. If you wish to withdraw funds from your account, we charge a 5% processing fee.
In another statement, they confirm that the 10% fee on profits also applies to shares that close at $1 and are held on account. So, in your example (and assuming I understand their bifurcated explanation of fees), you would pay a $10 fee on your $100 profit, then another $9.50 for the privilege to withdrawing your adjusted earnings of $190, for net proceeds to you of $180.50.
I think the 5% fee is mostly about recovering for costs PredictIt incurs when processing credit card deposits.
You're welcome, Shak.
In addition to the seemingly high 10% fee on profit, the fee structure is straight out misleading. I reasonably inferred that if my position was closed out at $1, the profit would automatically be mailed to me. Instead, they cleverly merely "credit" my account. That way, in addition to the 10% disclosed fee, they charge an additional 5% fee to redeem the "credit." The fee should be clearly disclosed as 15% of all profits and not disguised as 10%. It is never 10%!
I think they mail checks as an implicit additional means of address verification, but repeatedly having large checks in the mail does get scary, insofar as I simply don't know one way or another what would happen if the post office lost any envelope. Not speaking of these checks but just mail in general, most people have probably noticed how occasionally a postman drops an envelope in the wrong mailbox, like I've gotten unrelated mail addressed to neighbors and others.
Maybe, after the first withdrawal is done by check, allow direct deposit on subsequent withdrawals?
The fees serve a purpose, insofar as I want them incentivized to continue to maintain this great site, but always using mail alone seems unnecessary.
Alternatively, if continuing to use mail alone, maybe clarify the FAQ by explaining how a lost check would be handled, like if one could pay a moderate fee to have it canceled and then a replacement check mailed out?
A flat withdrawal fee is fair. I'm with afoux1 on this. Or cap the 5% fee for the first $500- or whatever is fair. But it costs predictit no more to cut a $50- or $500- or $5000- check. The current 5% fee is exorbitant, given the 10% chunk predictit has already taken out of winnings. Respectfully, this should be reconsidered and changed.