Unfair fee structure

[kevinv3]

I've been an occasional seller since the late 1990s. Not a ton, but every now and then when free time allows, I work on posting collectible items that come into my possession. Was always a fun way to make a few bucks.

Recently I have been made aware of what appears to be grotesquely unfair changes to seller fees. Ebay's "final value fees" charged to a seller for a successfully sold item are in part based upon SHIPPING costs and sales tax. How does that makes ANY sense???

Of course, Ebay has to make money. I get it. They're a business. However shouldn't a seller "fees" be based upon the final selling price of an item?? Why make a seller pay MORE just because something is heavy and costs more to ship?? Why include sales tax in that same fee structure??

Recently I sold an item for $35. The buyer paid $8.95 for shipping, however I refunded about half of that for a discount. When I looked at the "seller fees" for this transaction, I still was charged a final value fee based on the original shipping amount. Why?? When all the fees were added up, Ebay took $10 from this sale. I get to pocket $25. That's a bit on the excessive side for a low-price item. It was never this extreme years ago. Forcing buyers to pay sales tax was bad enough. Now sellers get screwed with higher fees, in part based on the cost of shipping.

Bring back the old ebay!

[nobody*s_perfect]

eBay has been charging final value fee on the buyer's full payment including shipping since 2011.

[wastingtime101]

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@kevinv3 wrote:

Recently I have been made aware of what appears to be grotesquely unfair changes to seller fees. Ebay's "final value fees" charged to a seller for a successfully sold item are in part based upon SHIPPING costs and sales tax. How does that makes ANY sense???

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Fees have been charged on shipping since circa-2010. Sellers were skirting fees by listings items for $1 with $300 shipping and sellers that offered free shipping had to pay more in fees than sellers that charged separate shipping. eBay saw an opportunity to make the playing field more level, put an end to some of that fee avoidance and increase their profits in the process.

[luckythewinner]

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How does that makes ANY sense???

It levels the playing field for sellers who offer free shipping - something eBay actively encourages.

[slippinjimmy]

Besides what other have said........

eBay does not and never has refunded fees on partial refunds. At one time (no longer) PayPal did refund their fees for partial refunds BUT that applied only to the payment fee they charged. FVF's were never refunded on partials.

[soh.maryl]

The FVF has been charged on the total paid by the buyer to the seller for probably 10-11 years.

"Forcing buyers to pay sales tax as bad enough." Well, did you know that requiring buyers to pay state sales tax on purchases was not an idea of eBay's, but a result of legislation enacted by 40-some states? Yes, eBay fought that also.  

[kivlat]

I understand the fees on the shipping, to an extent, but the fact that they also apply it to the sales taxes is absolutely ridiculous. That money is collected for those states, so why should we as sellers lose even more money because the buyer has to pay sales taxes. I owned a business once and in the state I live they actually gave you a kick back for paying on time. so of the 6% collected,  the 5% that was collected went to the state while the other 1% that was collected went back to the business. So not only is EBAY making more money because their fees include sales taxes, but they're also receiving a kick back from states that do that. 

[ebooksdiva]

@slippinjimmy 

That’s not necessarily true 

Fee credits for partial refunds

When the buyer is issued a partial refund, your eligible fee credits will be proportional to the amount that the buyer is refunded. For example, if the buyer receives a 20% refund of the total amount of the sale, then you'll be credited 20% of the eligible fees that you were charged. See the detailed examples below.

Fee credit calculations for partial refunds

Example 1

A buyer purchases a blouse for $50, plus $12 for expedited shipping. The seller is able to use a less expensive option and refunds the buyer $5 of the original shipping cost.

Fee credits  

[ms.rodriguez*]

If ebay did not collect the sales tax, the seller has to do it. Let's imagine that you sold 50 different items to 50 different buyers, one in each state.  Then YOU, the seller is responsible for sending that tax to each individual state.  If I recall correctly 45 states charge the sales tax. So you start which 5 states doesn't charge it and then you eliminate those 5 sales. Then , YOU , the seller has to remit the sales tax to each state.  YOU, the seller has to figure it out by county, not just the state.  Imagine filling out 45 different forms at least and mailing them out to 45 different states.  Sure, I bet you can do it online too.  So, YOU, the seller, has to go into 45 different state websites,  fill out the form with  your name, address, ID , etc . etc and remit the sales tax for each of those sales.  If you have 2 buyers from 2 different counties within the same state, you need to separate each transaction since the rates are different in each county.

Frankly, I am glad that Ebay is doing it and they can keep that well earned 12.9% on the sales tax fee.

Kivlat, you would need to do this EVERY year that you sell.   I imagine for each website that you sell too.  No, it's better for ebay to handle it.

Raise your prices and let your buyers pay the fees.

[soh.maryl]

Wouldn't you imagine that it's costing eBay some money to (a) know exactly what the state sales tax rate is for every state that charges state sales tax? And, if you believe that to be a simple task, please keep in mind that, within each state, there can be variations in the state sales tax, depending on the buyer's location.  My local state sales tax on purchases is, I believe, about 7.2%; however, just a little south of here, another county, it's a little less.  Do you really want to have to keep track of all that and of any changes in the rates?  

[stainlessenginecovers]

It applies to the Sales Tax because Processors have charged on the TOTAL at the Cash Register since the 1940's. 

Nothing new. 

It costs a seller about 1%. Or, they could just charge 15% Final Value Fee and not include the tax. 

What would you rather have? 

[pjcdn2005]

That post from slippinjimmy was true when they posted in Jan/22.  Luckily they have changed things since then. 🙂

[wastingtime101]

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Disregard - I was slow typing on this one.

[femmefan1946]

Our B&M shop paid fees on all the credit card payments we took since the early 1980s when we got our first click-clack Chargex account.  Ah, nostalgia.

The fee is on the entire payment, no matter how it is put together.

Here in BC, for example, if I were shopping in a department store like The Bay, I would pay federal and provincial sales tax on sweaters  and on adult shoes, but no provincial tax  on children's shoes and only federal tax on a book. 

And The Bay would pay the credit card processor their fee on the entire amount of my payment.

If I bought from their website, I would also pay both taxes on delivery and The Bay would pay their fees on that entire amount, including the selling prices, the assorted taxes and the shipping cost.

On eBay, we sellers are The Bay.  Just a little newer to the business. (The Hudson's Bay Company was founded in 1670).

[janet9988]

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@kivlat wrote:

I understand the fees on the shipping, to an extent, but the fact that they also apply it to the sales taxes is absolutely ridiculous. That money is collected for those states, so why should we as sellers lose even more money because the buyer has to pay sales taxes. I owned a business once and in the state I live they actually gave you a kick back for paying on time. so of the 6% collected,  the 5% that was collected went to the state while the other 1% that was collected went back to the business. So not only is EBAY making more money because their fees include sales taxes, but they're also receiving a kick back from states that do that. 

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When you open your own website you can be in control and not pay ebay any fees. That seems to be your best choice. You can figure out how to pay the sales tax to each state and keep up with all the ever changing laws......and the best part is that you would not need to pay ebay one cent.