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Shipping charges included in final value fee

Why do final value fees include shipping charges?

 

The total amount of the sale includes the item price, any handling charges, the shipping service the buyer selects, sales tax, and any other applicable fees.

 

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Shipping charges included in final value fee

(1) To avoid penalizing sellers who offer free shipping (which means they have to add the shipping cost to their item price). eBay wants to encourage sellers to offer free shipping.

 

(2) Sellers used to avoid fees by undercharging the item price, and then inflating the shipping cost. Like $1 item and $50 shipping.

 

eBay has been charging a final value fee based on the buyer's entire payment, including shipping, since 2011.

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Shipping charges included in final value fee

It is policy... It works the same way for all stores.......even Walmart.

Lift your left leg at midnight to start off on the right foot. Happy new Year!
Message 3 of 35
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Shipping charges included in final value fee

With no shipping charge I could list an item for $1.00, and charge $100.00 for shipping and bypass eBay's fees:

This is the why of this: it use to be done.

So eBay charges the final value fee variable on the shipping as well.

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Shipping charges included in final value fee

"Why do final value fees include shipping charges?

The total amount of the sale includes the item price, any handling charges, the shipping service the buyer selects, sales tax , and any other applicable fees."

Once upon a time,  a long time ago, when eBay was just a startup, a plan, a dream of a great way for people to sell, oh, old textbooks that had been sitting on a shelf for 15 years, one of eBay's founding principles was a belief that:  People are basically good and honest.  

Because eBay officially believed that, in their early years eBay trusted sellers to list items at true and valid prices with -- here's the thing -- true and valid postage amounts.   And eBay's original fee structure charged sellers a fee based on ONLY the cost of the item.   (By the way, this was well before eBay was required to charge sales taxes on sales.)  So, back then, a seller might list two old textbooks for $29.99 and what seemed to be a reasonable, true, and valid postage amount of $9.00.   Back then, a buyer could actually write a check for $38.99 and put it in the mail to the seller.   Ah, the good old days.  But I digress . . . . .

And the seller was charged a Final Value Fee on only the $29.99, the cost of the books.   Because the seller was a good and honest person and followed the plan that eBay had in place at that time.

But in those days there were, believe it or not, some people in the world who were not good and honest.  (I know!)  They saw that eBay would charge a fee on only the cost of the item and not the cost of postage that was in the listing.   And they thought, "Hey, I can get rid of those old textbooks and get some good money for them!"  So a lot of those bad people started taking advantage of eBay and its corporate official trusting nature.   

Some of those dishonest people would do things like list two old textbooks for $8.99 and $30.00 postage. Some of those dishonest people might list their mother's wedding gown for $10.00 and $900.00 postage.   And lots of other really outrageous listings.  Of course, actually mailing that wedding gown didn't really cost $900.00.  A dishonest seller would pocket, maybe, $850, without paying eBay their fee on that money. 

Finally, eBay figured out what was happening.  eBay had to admit that NOT every seller was good and honest.  eBay did have a policy in place that would punish sellers who engaged in Fee Avoidance, by charging low prices with high postage.   That was a lot of work, trying to check out e-v-e-r-y listing to catch the cheaters. 

So eBay decided they had to do the only thing that was good and honest and rightful:   eBay started including postage and/or other shipping charges in the Final Value, the amount on which eBay charges fees to the seller.   Even to sellers who list a reasonable, true, and valid postage amount. 

Just like in grade school:  When one child acts up in class, the whole class can be punished.  

That is why we sellers now have to pay a Final Value Fee on the total amount paid by the buyer, including postage.  

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Shipping charges included in final value fee

However, when we purchase shipping labels from eBay, they know that the money is going to the shipper and not into our pockets. In this case, the final value fee on shipping is ripping us off.

 

If eBay was not selling us the label, they wouldn't know if the shipping amount was honest or not, but because they do sell us the label, that circumvents the seller who would sell an item cheaply with an excessive shipping charge, thus cheating eBay. Instead, eBay cheats us.

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Shipping charges included in final value fee

You certainly explained that very well.  Ive been selling since 1999 and i miss the once upon a time, good old days.  
you are correct, the dishonest people is why ebay had to put this policy in place.  I totally get it.

 

as a seller, i dont over inflate my shipping, so i may take a little hit now and again.

still a great forum to reach millions of potential buyers.

good luck with your sales

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Shipping charges included in final value fee

Ebay, and it's payment processor Adyen, operate the same as all retailer payment processors. The fee charged is for 100% - that's every penny - of the money collected and processed. The money is not itemized, it's every cent. 

 

When you pay someone, whether it's a mail order business, grocery store, gas station - you name it - with a credit card, that money goes through a processor. When you buy your beer and cigarettes at the corner store with a credit card, the card processor charges the store for the full amount charged, including sales tax. Plus, more than likely, a transaction fee and maybe a monthly fee to boot. When you pay your tab at the local bar or restaurant with a credit card and you include a tip, the establishment's payment processor charges a fee for the whole amount - every penny - including tax and tip. No itemization, one number - fee is on the total amount. When you buy from online business, say LL Bean, and pay shipping and possibly tax, LL Bean has to pay their processor for processing the whole amount, including shipping $ and sales tax $. 

 

I know, you think eBay is "different" and have people working night and day finding ways to screw you, and nothing anyone here says will change your mind. But yet... you keep coming back to sell, despite the fact that there is no law compelling you to do so.

Message 8 of 35
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Shipping charges included in final value fee

I remember the whole site full of $1 items with the real price in the shipping. That was a crazy time. I wonder how long that went on for? A while I think. I think its was 2005ish.

For everything that happens conditions exist such that nothing else could have happened.
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Shipping charges included in final value fee

"So eBay decided they had to do the only thing that was good and honest and rightful."  ???  LOL  They had to do the laziest thing & find a way for bigger profit but screwing over the 99% of honest sellers with a money grab.  How about removing every seller who were cheating the system instead?  They couldn't do that - it might hurt their bottom line.

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Shipping charges included in final value fee


@sakic92710 wrote:

"So eBay decided they had to do the only thing that was good and honest and rightful."  ???  LOL  They had to do the laziest thing & find a way for bigger profit but screwing over the 99% of honest sellers with a money grab.  How about removing every seller who were cheating the system instead?  They couldn't do that - it might hurt their bottom line.


It was extremely widespread back then. It seemed like most of the big operations were doing it.

 

Also, they finally extended promoted listings to shipping costs as well because there were people gaming the promoted listings system the exact same way, putting insane promoted listing percentages on 99 cent items that actually had the real cost of the thing over in the shipping.

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Shipping charges included in final value fee

However, when you purchase a shipping label through ebay, you get them at a discount, and I've found for a priority flat rate box, its almost like 20%. I suppose they assume this offsets the extra few bucks you're paying them on their fee that includes shipping. It's also likely they are getting a discount due to the volume and management of all those orders.

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Shipping charges included in final value fee

@blackcount456 

 

eBay likes to make you think they are doing you a solid by saying "you saved XX by purchasing your label on eBay, but that is just smoke and mirrors.

 

Discount that you are seeing on that "Priority"  is pretty much just the "commercial online shipping label" purchase price available most anywhere online. Some of us (TRS) get a little perk beyond the online price.

 

There was a recent "extra" discount on Priority labels, but that was just a short time perk.

Message 13 of 35
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Shipping charges included in final value fee

Thats actually not true, it was an excuses ebay had to make extra money. most shipping is done via ebays managed shipping discount portal, which they know how much you actually spent on shipping. that portion they could choose not to charge FVF, but they played dumb knowing most people wont realize and rake in the profits. The 30cent they charge on top of each transaction, is the actual overhead cost to run, servers/employees/accounting/legal cost/insurance ect.

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Shipping charges included in final value fee


@mynewandusedstuff wrote: .... most shipping is done via ebays managed shipping discount portal, which they know how much you actually spent on shipping. that portion they could choose not to charge FVF ...


If eBay excused only sellers who used their own shipping labels, they would be accused of being coercive.  Many sellers use alternative online postage resources, especially larger Sellers who sell on many venues and thus use one non-eBay source for all of their shipping. Others choose to use companies such as Pirateship which offer services that eBay does not, such as Priority Mail cubic. I have no idea what proportion of sellers use eBay's own postage labels; I don't know how you could even estimate that.

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