Yes, I normally say +5% for PayPal fees on the items I sell. The reason is simple, PayPal is not free as you mention, and as I see it, it shouldn't cost me money to sell an item, hence the 5% extra. People can pay to my bank account instead, but then they still would have to pay extra because of the reasons you mention in the range of 20-25 EURO and they loose their PayPal buyer protection or what it is called. Still PayPal is cheap than bank transfer.
PayPal doesn't charge 5%, but their calculations in my oppinion are wierd. A start price, and then a percentage of the amount to a certain level, and then a different percantage for the next level IIRC.
I decided a long time ago that I wouldn't want to waste my time on calculating PayPal fees, because then I would have to do it once again in case I lowered the price on the item. So now you know why there is a 5% add on to my items.
If buyers bails on a deal because of an extra 20 EURO at max, I take it they aren't seriously interested in the item anyway, and then I'd rather not deal with these people.
Hope this is enough answer to your question.
