Managed Payments, checking account authorization, in only or in and out?

[va-8501]

I have a bunch of questions but this one might be a deal breaker.  

If I  enroll in MP, I understand that I am authorizing ebay to deposit the net proceeds of a sale into my checking account.  Am I also authorizing ebay to automatically reverse it or take it out of my checking account without my one off consent for each occurrence in disputes where ebay rules in favor of the buyer? 

I called ebay Managed Payments support and didn't get a definitive yes or no answer.

Of course I would like it to be a one way authorization.  I don't have a problem with ebay putting money in my account.  I want full control of the outflows though. 

[mtgraves7984]

One workaround is to link a credit card as the Automatic Payment Method for your eBay invoice. Then that  will become the place where eBay could invoice ('pull') funds... should that time ever come. 

[caldreamer]

Under normal circumstances, if buyer opens "return request" you authorize refund.  Whoever, if you don't handle complaints in a timely manner....EBAY will automatically issue refund (without your authorization).

[mam98031]

When there is a negative balance in your MP account and MP deems it needs to be funded, you get notified of this.  They don't just go and try to pull money from your bank account.  They will notify you of how much is needed and then ask you if you want to fund that through your bank account or your back up funding source which might be another account or a credit card.

It is very good to be cautious, especially with so much going on in the world.  But the water if fine in here for most members.  Yes there are issues and no MP is NOT like PP.  But it is doable.  

For myself I find things are much smoother by opting into weekly deposits.  They are transferred every Tuesday and in my bank by noon the next day.  Except for this week.  I don't know what happened, but my transfer arrived at my bank on Tuesday too.  Now that was a first.  

Most of the problems members have is trying to do the Daily Deposits.  It is a very disappointing process and only done on Business days.  It causes all kinds of issues for many sellers.  So I encourage those coming into MP if you can do Weekly Deposits, it is really much smoother, at least in my experience.

[va-8501]

I already do that. Managed Payments takes that option away.

Under the Managed Payments Programs using a credit card to pay ebay fees is no longer an option.  No more monthly invoice for fees.  Ebay fees are taken from the proceeds of a sale with the net amount transferred to the sellers checking account.  No alternate funding source is needed since ebay will take their cut before the seller gets theirs.  This is just part of the financial gain ebay is taking by cutting paypal out of the equation and collecting fees from each transaction up front. 

Ebay no longer has to wait until monthly invoice to collect their fees, they will be collected on each sale before the seller gets theirs.  Although interest rates are very low, think of the time value of the huge ebay cash flow, immediate receipt of ebay fees rather than net 30 days under the old invoicing method.

Second benefit to ebay is cutting out the sellers use of credit cards to pay their fees monthly.  Typical credit card merchant fees of 1% to 3% which ebay  was paying for collecting their fees from sellers that use a credit card.  Not to mention sellers that use a cash back card no longer getting a benefit.

For ebay sellers (non-stores) the final value fees go from 10% to 12.35% which might look like a small savings as paypal was charging 2.9%; a meager net benefit to the seller of 0.55%.  But that seller benefit disappears now that ebay is charging this  final value fee on the  sales tax which they weren't before.  Paypal was charging the 2.9% on the sales tax, but now ebay will be charging 12.35% on the sales tax.  Any sale subject to sales tax rate of 5.9% or higher will result in higher seller fees. (National avg sales tax rate estimate is 7%)

The benefit to ebay is an additional 2.35% on any non-stores transaction plus $0.30 for every transaction, plus 12.35% on all sales tax collected. 

One has to assume that ebay will eliminate any 'dead-beats' that don't pay their fees too.

Add it all up, time value of collecting fees immediately, cutting out credit card merchant fees, 2.35% higher final value fees, $0.30 more per transaction, 12.35% fee on sales tax and it's a huge gain for ebay.  While the seller on average will be paying slightly higher fees, and looses any benefit of having used a cash back credit card to pay ebay fees. 

Ebay will increase fee revenues by at least 33% by forcing sellers into the Managed Payments program.

Do the math, an item sells for $100, $20 shipping, 5.8% sales tax.

Before MP ebay fees were 10% of $120 = $12 (ebay was not collecting a fee on the sales tax)

With MP ebay fees are 12.35% of total including sales tax plus $0.30 = $15.98

$15.98 - $12.00 = $3.98 increase over the original $12.00 = 33% increase.

Add to that the time value benefit of collecting fees net 0 days from previous net 30 days and no more credit card merchant fees probably another 2% net gain.

And poor paypal; this could put a nail in their coffin.

This is a genius move on ebays part.  Too bad they don't feel any compassion to share some of the benefit with their sellers, which are really the backbone of ebay.  While they're making changes they should change their name too;  how does GREEDY-BAY sound?

[wrong66]

Do the math correctly. You forgot the 2.9% + $,30 PayPal fee added on to the 10%.

[va-8501]

eBay wasn't getting the paypal fee, paypal was.

Ebay spun off paypal in 2015, so why would I include paypal's fees when calculating ebay's gain?

Paypal fees are not part of ebays before or after scenarios.

Before MP (managed payments) ebay was collecting:

10% of the item price plus any shipping, 0% on the sales tax.

(Paypal's fees did not belong to ebay.)

With MP ebay will be collecting:

an additional 2.35% on the item price plus any shipping,  (12.35% now minus 10% before = 2.35%)

Plus $0.30 on every transaction that they weren't getting before,

Plus 12.35% on any sales tax that they weren't getting before.

That's at least a 33% increase in fee revenue for ebay.

In assessing the difference to the seller, yes paypal fees are included.  But, as I pointed out in my last post, the meager gain in favor of the seller (2.9% minus 2.35% = 0.55%) is wiped out with ebay collecting 12.35% from the seller on sales taxes (a net increased fee of 9.45% on sales taxes).  The breakeven point for seller fees is tax rate below 5.9% (based on a $120 transaction).  Any sales tax rate above 5.9% would result in the seller paying higher fees.  I think the national average sales tax rate is about 7%, so on average sellers will be paying higher fees and anyone that was using a cash back credit card to pay monthly fees is loosing an additional 1% to 2% opportunity. 

If my logic is wrong, show me in a detailed before and after comparison where.

[mam98031]

@va-8501 

[wrong66]

The elevated FVF on sales tax amounts to 50-90 cents more on a $100 sale. Nothing to write home about.

[mtgraves7984]

"Under the Managed Payments Programs using a credit card to pay ebay fees is no longer an option."

@va-8501 

I know that the Simplified Fee System takes the fees from the sale up front. I was referring to the regular monthly invoice for my Store subscription. I have a CC set as my Automatic Payment for that  invoice. Therefore, that CC is the 'backup' for any funds eBay would invoice me for in such a situation as you describe.

I've been in for a year... I've got a pretty good feel for what works for me. It might not be what works for you.

Good luck.

[va-8501]

I don't have a store.   I won't be invoiced monthly for anything.  

I should open a new checking account for ebay use only.  

Then delete my CC authorization from my ebay account since I won't be invoiced anymore.

[mam98031]

---

@va-8501 wrote:

I don't have a store.   I won't be invoiced monthly for anything.  

I should open a new checking account for ebay use only.  

Then delete my CC authorization from my ebay account since I won't be invoiced anymore.

---

You won't be able to "delete" a method of payment for your Monthly Seller invoice.  You can change it but you can't leave it blank.  You will have to have something there or they won't let you sell.

[va-8501]

What monthly seller invoice? 

Am I missing something that I would be invoiced for under Managed Payments?

The ebay  "Learn More" page says this about Managed Payments:

"Simpler fees - Your ebay selling fees and expenses will be automatically deducted from your earnings before you get paid.  No more separate monthly fee payments."

[mtgraves7984]

---

@va-8501 wrote:

What monthly seller invoice? 

Am I missing something that I would be invoiced for under Managed Payments?

The ebay  "Learn More" page says this about Managed Payments:

"Simpler fees - Your ebay selling fees and expenses will be automatically deducted from your earnings before you get paid.  No more separate monthly fee payments."

---

If you don't pay a monthly invoice for an eBay subscription, then I suppose that eBay would  use your attached bank account in the instance of reversals or disputes. I suppose that would make the account an 'in and out'.

[wrong66]

I guess they're just talking about Final Value Fees in that quote. Monthly fees can include store subscriptions, listing upgrades, some forms of shipping and other things. eBay doesn't know whether you might incur any of these fees in the future, so they require a backup funding source in case you ever do. It's no big deal.