Dear Ebay: How do you justify charging the full FVF on sales tax- money that we sellers never see??

[forwardtechsurplus]

Can someone from eBay please articulate your justification for including sales tax- money that we sellers never actually possess- when calculating the final value fee?  If you have a compelling argument on why it's necessary, other than basic greed, we sellers would love to hear it. I thought it was bad enough when Paypal started doing this, but at least their overall fee was on par with industry standard at 2.9%.  But charging us an 11.5% fee (or more) on sales tax is absolutely outrageous. It's tantamount to price gouging, and is unscrupulous at best, if not possibly illegal.  Ebay, you are BEGGING for a class-action lawsuit if you do not change this unfair predatory fee structure. I understand you have an obligation to your shareholders to make more money, but your lack of other viable strategies to do so should not be your seller's burden to bear. Simply jamming your hand a little deeper into our pocket to pad your own reflects a laziness to think of any other long-term revenue solutions, and frankly, shows a blatant disrespect for your sellers. As a long time member of the eBay community, a Top Rated seller, and power seller, I respectfully submit that if you care one iota about your the sellers (you know, the people actually making all that money for you), you will reconsider this egregious money-grab and END fees on sales tax.

To my fellow sellers:  Please make your voice heard. I encourage you to call eBay, write your own post, and reply to this one to share your objection to eBay's unfair skimming of our hard-earned money!

[msd-inc]

In Managed Payments all fees are refunded on Partial refunds.

**it wasn't the case for my store, I'm in MP, and every time I did a partial refund when the item being returned was used and opened, eBay MP never credit back anything, not a penny. 

[bilzbigdealz]

I agree!

[ssuede8ztw]

Paypal was charging a 2.9% processing fee on the total transaction( taxed )  which is normal ;any processing service would do this.-Ebay is doing the same at a lower rate of 2.35%. However!!!!!!!!ebay is now charging 10% of the total INCLUDING TAX.  Not only are we paying a fee on taxes that we arent even collecting, this makes the processing fee more like 2.9% anyway in the end. Ebay shouldnt be collecting a fee on state tax. 

[ssuede8ztw]

Yes Slip;were paying less on the processing fee but getting screwed by paying the 10% fee on a taxed total. Im not a big business, just a woman selling for other people part time, so the little savings you mention wont apply to me.I'm also so lucky to only have 1 return every 6 months or so(i have thorough listings) so I dont deal with returns. Anyway, thank you so much for taking the time to breaking it down for us!  Good luck with all of your auctions

PS; was Paypal that bad?????

[mam98031]

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@ssuede8ztw wrote:

Paypal was charging a 2.9% processing fee on the total transaction( taxed )  which is normal ;any processing service would do this.-Ebay is doing the same at a lower rate of 2.35%. However!!!!!!!!ebay is now charging 10% of the total INCLUDING TAX.  Not only are we paying a fee on taxes that we arent even collecting, this makes the processing fee more like 2.9% anyway in the end. Ebay shouldnt be collecting a fee on state tax. 

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@ssuede8ztw 

That is true but there is more to consider.  In MP yes they are charging the FVF on the entire amount being processed.  One fee for everything.  But if you were to break down that fee it kind of goes like this for EVERY category in Ebay.

9.15  Store FVF 

2.9  Money processing fee [PP's rate]

12.05  Total percentage

But in MP it is:

9.15  Store FVF

2.9  % money processing fee

-0.55% REDUCTION on the FVF

11.50 Total % of FVF in MP

So what happens with the sales tax is like this.  Using the higher rate of a 10% tax on a purchase, you would be paying the 11.5% on that 10% of the sale that is the tax, but on the other 90% of the sale [product and shipping], you are paying a LOWER FVF rate.  In most cases that will offset the amount you are paying for the FVF on the sales tax.  And when you have sales that have not sales tax at all you come out ahead.

The Fee structure in MP is more likely to be a neutral change for most seller and may even save them a little money.

[soh.maryl]

There are now forty something states that require eBay charge state sales tax to the buyer based on the state where the buyer's item is delivered, usually the buyer's home state.

Most of those states require that the state sales tax be charged on the shipping as well as the item price.

The state sales tax in these cases is charged to, and is payable by the buyer, not the seller.

[forwardtechsurplus]

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@luckythewinner wrote:

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Correct - criminal courts deal with criminal law, and civil courts deal with civil law. 

But in order to prevail in a civil case, you must demonstrate that a civil statute or law was violated. 

What civil statute or law is eBay violating? 

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Hey Luckythelawyer, before you strain your arm patting yourself on the back for what you think was your big “checkmate” response, keep in mind my original post said “possibly” illegal. The crux of my post still stands either way: A fee applied to monies that sellers are never actually in possession of is inherently unfair. And, as with a specific example I’ve already provided, civil lawsuits are sometimes filed in court even when the legality of defendant’s alleged wrongdoing isn’t completely clear. And yes, a law firm will take such as case, especially when the potential outcome promises to be lucrative. And even if eBay were to prevail, the litigation could still be costly both monetarily, and in terms of reputation. Thus it would be in their best interest not to invite a lawsuit in the first place.  I doubt if any of that matters to you though. Based on your previous responses, I can see you’re the guy who would have come to the defense of practices like Debt Bondage and child labor before they were illegal… “But what law are they breaking? If they’re not violating a specific law, that makes it okay!”

[forwardtechsurplus]

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@msd-inc wrote:

In Managed Payments all fees are refunded on Partial refunds.

**it wasn't the case for my store, I'm in MP, and every time I did a partial refund when the item being returned was used and opened, eBay MP never credit back anything, not a penny. 

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I haven't had a return under MP yet. If what msd-inc says is true, then eBay lied about that too. I was assured in no uncertain terms before MP rolled out that unlike Paypal, fees would be credited back in the event of a return / refund.

[glasser]

Couple a thoughts:

eBay definitely competes with Amazon--in some categories.

One example, if it wasn't for Amazon Prime speedy delivery, do you think eBay would force sellers into one day handling in order to be a top tier seller. eBay treats most categories (some exceptions) as if they were the same. For me who sells in antiques and collectibles, I do not compete with Amazon. They don't and likely won't, sell what I sell. I have a three day handling time (though ship 80% plus in a day) because eBay is not my main job and I need some flexibility. Think I should have different criteria for being the best of the best.

Not a lawyer, don't play one on TV:

Can't argue civil or criminal. That said, there is something to be argued, not just with eBay, about being charged a fee on a tax. It's like taxing a tax, which I don't think  should be allowable. This is actually a consumer issue because one has to assume that prices (maybe not on ebay but large retailers) are raised to pay this fee. Therefore, consumers are being taxed on the tax. The only group that benefits are payment processors not the sellers or buyers. BTW, fees on shipping are kind of a wash since discounts on shipping make that sort of a break evend deal.

  I agree with a couple of posters who said that having eBay handle the tax payments is very convenient. It's not altruistic though. They fought for years for now local sales tax and finally lost. They knew that if sellers were required to their own accounting and pay taxes in states where due, it would a nightmare. Imagine if you had one sale in a state and you had to register and then pay the tax and the whole tax owed was like $5. Don't even want to think about. Plus, I believe the states would have tried to hold eBay accountable for compliance. So just like fees are the cost of doing business for us so is handling sales tax for eBay. Maybe a much smaller fee on sales tax would be appropriate or a flat of $.01/transaction because the cost to ebay must be transaction not $ amount. It takes the same overhead to process a $400 sales tax payment to a state as it does a $2 transaction. It is all 100% automated, I assume.

[jesusforever2002]

I agree charging 11.5% fee on sales tax is not right. 

[geo2061]

  When all is said and done...  it's their platform that we sell on, large and small alike. 

Fees, like taxes, are just a part of life and eBay is a business among many just doing what they think are their most profitable options.  Sure eBay would be nothing without sellers, but all are able to sell elsewhere if they wish.

  eBay is an option among many in the online selling business and many sellers sell on multiple sites including their own (personally would hate to deal with that - being a very small time seller).  To each there own, and the best to all.

    ----------------------------------------------------------

  As A Seller - Think Like A Customer

[comic-sutra]

I just sold a $450 item to someone in Texas. I received $4.15 less than if I had sold the item to someone in Oregon, which has no sales tax. This was because eBay charged me 11.5% on their taxes of $36.11. 

Why wouldn't I simply refuse to do further business with those states/nations which charge sales tax or the equivalent? "Absurd!" some may say, and they may be right. But this is discrimination, and I am paying a tax for a benefit that I, not being a resident of those nations, do not get.

On top of that, eBay charges a 1.65% fee for international sales...65% higher than Paypal's 1% for foreign transactions...AND an additional tax on tax if they collect the VAT/sales tax/whatever. 

And I complained mightily when Paypal did it, but 1. they only charged 2.9%, not 11.5-13.15% (in my categories), 2. they didn't charge anything based on the VAT/taxes that foreign buyers had to pay, which was a separate transaction that was the sole responsibility of the buyer.

That's why eBay has consolidated all of this: so they can monetize it.

[comic-sutra]

1. Payment processors charged 2-4%...not 11.5-13.15% or more.

2. It has never been the responsibility of mail-order business, at least in the US, until very recently to collect sales tax in jurisdictions in which they do not have a physical presence, so no fee on sales tax not charged. 

[donsdetour]

I take it you want to spend hours collecting and filing the proper forms (much less finding them and having to file as a tax status in each state)  for the different taxes collected for the states instead of eBay.

That does not even include all the learning of the tax exempt item etc for each state collecting taxes...

Also would increase your tax audits from multiple states a s well..

I sure would not want the head pain involved with all of that.

Well eBay does all that for you, and does charge a fee .

Hmm sounds like it does save me a lot of time and frustration. 

Oh you do have a choice if you do not know;

to use, or not to use eBay.

If you want to fight them go after PayPal also for the times they charged you fees on all the money including taxes.

[marie185antiques]

Talking to the choir.....good luck!