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!

[reallynicestamps]

Having operated B&M stores for over 30 years, and sold mail order for most of that time, I'd like to say that this is a normal practice with payment processors.

The fee of the payment processor, Paypal, Managed Payments, Visa, MasterCard, Discovery, etc, is charged on the whole amount they process.

That includes price, shipping and taxes.

I don't like it.

I like it even less since I am not even a US resident.

But it has been the practice since  at least 1978, when I opened my first shop and got a merchant credit card account to accept card payments.

For a few years there, merchants were given a rebate on the sales taxes we collected, but that disappeared with the election of a conservative government.

[widgetcity2011]

I totally agree, plus we get charged a fee on shipping. 

[bigdeals.etc]

 Reminds me of how many restaurants charge tip (for like parties 8 or more) on the bill. They charge the 20% on the total including the sales tax, when it should be charged pre-tax.

[forwardtechsurplus]

Yeah, but merchant fees are typically around 3% right? If ebay charged a 3% processing fee on *just* the sales tax (and left their fvf at previous rates), I think I could live with that. Charging 11.5% on the tax is excessive.

[luckythewinner]

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In a marketplace where they continually struggle to compete with Amazon

Third-party sellers are a small part of Amazon's business. Amazon makes more money by selling their own goods and by selling cloud computing services. eBay's competition is Etsy and Mecari, not Amazon. 

That aside ... eBay's revenue was up 18%, GMV was up 26%, and earnings per share up 58%. Their market capitalization is $40 billion. Not bad for a company that "struggles".  

Credit card companies and banks charged exorbitant fees that people probably assumed were legal too, until enough people complained loudly enough. They'd still be doing it today, if everyone took your attitude that we should all just take it.

So what law is eBay breaking? 

Yeah, what law firm would be interested in what would surely be a high-profile, high damage lawsuit

Unless you know about a class action suit that no one else knows about, then the answer seems to be "none". 

[hurrrhaha_0]

Yeah why are you complaining, pass the cost on to the consumer and let them start griping, we all know who ebay would listen to and I can tell you it's not the sellers.

[cashvaluerecovery2011]

Lol man I assure you Amazon is ebays direct competition. Amazon has taken several million in sales away from ebay of just mine alone. If ebay did not change several things to make it more painful and less lucrative for me here.........they would still have that 10% or so of several million from me. If ebay had customer service and didnt treat me like wet garbage I would still do my shopping here instead of amazon. Im not just a lone wolf lol. Ebay has lost billions to amazon. I agree with the rest of your post.

[forwardtechsurplus]

Hey luckythelawyer, I'll say it again:  criminal acts are not a requirement to pursue a CIVIL lawsuit.  There are many examples, and I specifically provided one.

Amazon is absolutely competition for ebay. Maybe not in the "Rare vintage junk from my grandma's attic" categories, but many buyers and sellers have migrated to amazon and elsewhere. It's why many of the changes they've made in recent years that sellers gripe about are designed to more closely emulate amazon's model for buyer experience.

[north40sales]

do you sell on other platforms that do not handle the tax for you.   If so do you sell enough to each state that you would have to remit sales taxes to them?

Do you sell enough on eBay that would have required tax payments to each state you sell to? 

[north40sales]

You have to remember that eBay's business model is 100% funded by collected fees, discounts, and interest.

Fees to list items

Fees on relisted items

Fees on sold items  

Fees on payment processing

Fees on shipping costs 

Discounts from shippers (if not 100% passed to the seller that purchased the shipping label)

Interest earned from the Float on buyers payments that are in eBay custody for several days before being transferred to the seller.  

Without sellers, none of these revenue sources would exist. 

[north40sales]

ALWAYS tip the server in cash.   

Many places hold back a % of tips left on he CC total so the server receives a lower amount...or none at all.  

[forwardtechsurplus]

"In my $10 example the difference was about 2 cents, on a $500 sale the difference would be $1

If your total sales are One Million per year you might pay $2000 more but first deduct all the fee refunds that are available under MP that are not available under PayPal (partial refunds, cancelled orders, returns etc.) It would not take a lot to recoup that extra $2000.

Add in the sales that don't include Sales Tax and you will recoup the rest."

I replied to this once already but strangely it disappeared. I guess that's just as well since I misspoke a little:  I said on a million in sales, MP will actually cost you about 7000$ more relative to the old fee structure with Paypal. That's not what I meant... that difference is MP *with* fees on sales tax compared to MP *without* fees on sales tax.  The rest of what I said (if you saw it) stands though. For me personally, given my sales last year, it translates to another 400$ cut out of my bottom line.  I guess you're right that it's not a huge amount relative to total sales, but that doesn't make it right. How would you like it if eBay came along at the end of the year and said, "Oh btw, we're taking another 400$ out of your bank account, just because, that's why".  Your argument seems to be that you're perfectly okay with it, as long as they do it a little bit at a time. Again, you seem to be missing the main point, which is that they should not be entitled to charge the entire FVF on sales tax- money that the seller never actually possesses.

PS-  I do agree that there's value in not having to deal with Paypal anymore- especially their non-refund of fees when an item is returned through no fault of the seller's.  But those headaches were few and far between, and frankly, I think it's probably only a matter of time before eBay implements the same thing. 

[luckythewinner]

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@forwardtechsurplus wrote:

Hey luckythelawyer, I'll say it again:  criminal acts are not a requirement to pursue a CIVIL lawsuit. 

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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? 

[lightlily_arts]

The reason why I didn't see a reason to complain when PayPal levied the fee on the total transaction is because it was already an industry standard.  When brick and mortar stores accepted credit/debit card payments they were charged a small 2-3% fee for the card processing.  However , Managed Payments is taking a final value fee of 12.35% on the total transaction and that is not industry standard and a ripoff. When you sell high value items those state taxes can be substantial. In California many counties have 10% sales taxes. What if you re selling a $500 item now with an additional $50 of state taxes that you are paying a 12.35% final value fee on.  Think how this adds up over a years time.

[sakic92710]

Well, they get away with taking away 10% of our shipping fees.  What service do they provide for that 10%??  Squat!