Returning Discounted eBay Shipping Label Funds to Buyers

[articulatedgeared01]

Fri 2-16-2024 8:51 p.m.

eBay makes discounted shipping labels available to eBay sellers.   The shipping funds show up under the banner "What Your Buyer Paid" as a credit.   The cost of the discounted shipping label shows up under "What you earned - Selling costs" as a debit.   The difference between what the buyer paid and what goes to eBay for the discounted shipping label goes to the seller.   The difference, which can be substantial (for example, 42% discount of the actual shipping cost), actually belongs to the buyer, not the seller.    

I think that there is an ethical issue involved here.  

Sellers may have to pay Federal and State income tax on their eBay earnings (depending on how much they sell annually).   eBay also charges selling fees based on the selling price of the item and the cost of shipping the item.   This practice (shipping charges) is partly driven by the IRS and not just eBay.   As a result, a seller may think they are justified in keeping the difference from discounted shipping label.   However, the funds really belong to the buyer.

For some sellers, there is an issue of "fairness" at stake pertaining to the difference funds which really belong to the buyer.   Some of the equitable practices which sellers can provide to buyers include: 1) free shipping, 2) trying to bring into line what the discounted shipping label really costs with what the buyer actually has to pay for shipping, or 3) returning any difference to the buyer.

Once the eBay advertisement goes live, it is generally too late to determine how to handle the buyer's funds (that is, the difference associated with the discounted eBay shipping label).  I feel that the difference needs to be returned to the buyer.   However, eBay still ends up charging their selling fees based on the item selling price as well as the shipping charges.   This practice puts "ethical" sellers at a disadvantage, but it is a conscientious way for sellers to do business. 

One way that sellers can skirt the ethics issue is to purchase goods for 10 cents on the dollar and sell the items at ebay market prices.   However, there are hobby enthusiasts / sellers like me who purchased items previously at eBay market prices (some years ago) and are now trying to sell the same items at current eBay market prices.   Sometimes (often) the value of the items has declined over time.   This is just "tough darts" and still does not justify making off with shipping funds which really belong to the buyer. 

It's your money buyers (the selling price, the shipping costs, and the State taxes).  I hope you find some equitable sellers on eBay who will treat you fairly.

Regards,

ag01             

[wastingtime101]

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@articulatedgeared01 wrote:

Sellers may have to pay Federal and State income tax on their eBay earnings (depending on how much they sell annually).   eBay also charges selling fees based on the selling price of the item and the cost of shipping the item.   This practice (shipping charges) is partly driven by the IRS and not just eBay.   As a result, a seller may think they are justified in keeping the difference from discounted shipping label.   However, the funds really belong to the buyer.

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If the shipping price is "padded" by $5 and that entire $5 goes towards packing materials (after all, it's not shipping - it's shipping & handling), you still think that $5 "belongs" to the buyer?

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@articulatedgeared01 wrote:

Some of the equitable practices which sellers can provide to buyers include: 1) free shipping, 2) trying to bring into line what the discounted shipping label really costs with what the buyer actually has to pay for shipping, or 3) returning any difference to the buyer.  

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There's no such thing as free shipping. It's a marketing strategy. Often buyers end up paying more when I offer free shipping than when I offer calculated shipping.

Please tell me what is the difference to you, as the buyer, with the item listed in these 3 situations where retail shipping is $15, discounted shipping purchased online costs $10, and packing materials cost $5:

$60 with free shipping, total $60

$50 with $10 shipping, total $60

$45 with $15 shipping, total $60

No matter how you slice it, you're paying $60 whether those shipping & handling costs are built in to the item price or a separate charge.

[buyselljack2016]

Sorry, but it isn't the buyer's money. It's my money. 

The buyer pays the cost of the item plus whatever amount is shown for shipping (if not included).

That's ....how ......it .... works. That's the end of it. (unless. see below)

If it turns out that I was able to ship something for substantially less than what was shown/paid (perhaps a smaller box) then I will give the buyer a little kickback on that, but otherwise..................... it's "my money".

By your logic, if I made too much profit on the item itself, (800-1000% ) I should give the buyer back some money.................................... because ............. it .............is............. theirs.

[nobody*s_perfect]

How strange that you consider a handling fee to be "unethical" when it is standard operating procedure for shippers to charge a handling fee as part of their "Shipping and handling," and eBay even has a separate spot on the listing form for sellers to enter a handling fee when they use calculated shipping. 

If you prefer to just charge buyers for the actual cost of the eBay postage label, rather than dealing with partial refunds in order to be "ethical," there is a place in your site preferences where you can choose to show just the eBay postage cost in your listing. This Help page explains it and has a link to your  "Shipping preferences" page.

https://www.ebay.com/help/selling/shipping-items/shipping-rates/shipping-discounts?id=4168 

[gator08041971]

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@nobody*s_perfect wrote:

How strange that you consider a handling fee to be "unethical" when it is standard operating procedure for shippers to charge a handling fee as part of their "Shipping and handling," and eBay even has a separate spot on the listing form for sellers to enter a handling fee when they use calculated shipping. 

If you prefer to just charge buyers for the actual cost of the eBay postage label, rather than dealing with partial refunds in order to be "ethical," there is a place in your site preferences where you can choose to show just the eBay postage cost in your listing. This Help page explains it and has a link to your  "Shipping preferences" page.

https://www.ebay.com/help/selling/shipping-items/shipping-rates/shipping-discounts?id=4168 

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Actually, you can set the shipping cost shown to buyers.  It can be set to the discount rate, the retail rate, or a % off of the retail rate.

I use the full retail rate.  This provides a cushion, as sometimes what's calculated and actual don't always align.  If the discrepancy is large enough, and the buyer is further away, I will bump their shipping to Priority if its still under what they paid.  If its a substantial difference (like 10 dollars or more) I will refund a portion of the shipping.  The most egregious one I had was where the buyer was charged 66 bucks for shipping, and it cost me 21.  I refunded them 40 bucks, as they were robbed.

But beyond that, no, there is no reason to think this way.  Now, the OP can go and run their listings however they want and be all exact, but its exhausting to think about.  And many buyers know how all this works.  No matter what we charge for shipping, they are going to be paying for shipping.

And lets not forget the FVFs.  Sometimes we can make up for the fees a bit with the difference in shipping, especially on lower cost items.  In the end, its the little things that help make the sale work.

I have a pretty large amount of hard drives listed right now.  The cheaper drives, I might make 3 or 4 bucks on.  But I would make more, if they were bought with quantity discounts.  (Because the shipping for 5 drives at once is cheaper than 5 individual sales of drives, even if you take in to account the quantity discount)

Sellers on here already get a lot of costs and stuff that eat into their profits, especially if they sell items that are common and hard to compete with other sellers.

[articulatedgeared01]

Mon 2-19-2024 4:03 p.m.

When an eBay seller requests an eBay discounted shipping label, there is a substantial discount (perhaps 40%) which is provided to the seller.   Unfortunately, the difference in funds (that is, the difference between what the USPS or other shippers normally charge for shipping and the discounted shipping charge) actually belong to the buyer - not the seller.  I think that it is appropriate for sellers to 1) return those funds to the buyer, 2) reduce their advertised shipping charges to buyers so that the charges approximately match the cost of the discounted shipping label or 3) provide free shipping.

Regards,

ag01    

[buyselljack2016]

Repeating the information that was posted in your other thread will not make this true.

Contrary to popular belief repeating something over and over does not make it fact.

If you chose to refund, that's on you.

Returning Discounted eBay Shipping Label Funds to ... - The eBay Community

[krazzykats]

I sure don't get a 40% discount off retail pricing, ever!  

[stainlessenginecovers]

@articulatedgeared01 

This is wonderful!! I'm so glad you've decided to make yourself the 'selling czar'. We were in much need of your direction..but; 

Can we all have your address so we know where to send the bill for:

a.) 13.25% additional final value fee

b.) box/envelope

c.) bubble wrap/peanuts etc.

d.) tape

e.) label

f.) ink

[anjofak]

I wonder what the reviews would say after 100 packages without packages just a label slapped on the item ..hmmm

[nobody*s_perfect]

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@krazzykats wrote:

I sure don't get a 40% discount off retail pricing, ever!  

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eBay's discounts are pretty good, especially for packages that are eligible for Cubic pricing. That nutcracker you're selling is showing a shipping cost to me of $50.55, but if I purchased it the eBay shipping label would cost you just $25.24, which is almost exactly a 50% discount.

http://www.ebay.com/shp/Calculator