Actually the indulgences that Tetzel was dealing with were a bit more complex than that. This was originally a jubilee indulgence announced by Julius II in 1505 to rebuild St. Peter’s and to combat the Turks. However the north German princes prohibited the “sale” of the indulgence in their lands.
However in 1514, Albert the Margrave of Brandenburg, and the brother of the Brandenburg elector, was made archbishop of Mainz. Unfortunately he already was archbishop of Magdeburg and held the administration of Halberstadt. Being given another see required a dispensation and a heavy fee had to be paid, which put Albert badly in debt. To get the agreement of the elector of Brandenburg to sell the indulgence in his lands, it was agreed that half the revenue from the indulgence would go to pay his brother Albert’s debt. So the sale did not have an entirely charitable purpose. Luther was not aware of this arrangement and sent a copy of his 95 thesis to Albert who was Tetzel’s bishop. This did not go over well at all and was part of the reason for the uproar caused by the theses as Albert did not want to see his loan repayment halted.
My information comes from The Division of Christendom, Christianity in the Sixteenth Century by Hans J. Hillerbrand, a professor of religion at Duke University.