eBay Overcharged Tax on Battery Sales

[valueaddedresource]

*Moderators - please leave this post in the selling section.  This issue affects sellers as they will pay extra fees and will bear the brunt of any negative feedback or chargebacks from this issue.*

I've seen several reports here in the community and on Twitter of exorbitant tax amounts being charged on batteries. 

Looking at the amounts involved, it appears to me that eBay made an error with an update that presumably was meant to address various state regulations regarding fees for sale/recycling of lead acid batteries for cars, boats, RVs etc. but eBay was applying these fees to all batteries instead.

One example from Twitter was a 10 pack of watch batteries for $3.89 which incurred $5.31 in sales tax.  The buyer was in New York and said tax is usually 8% for his location.  That should have been $0.31.  The extra $5 appears to possibly be a "return incentive payment" per NY regulations for Lead Acid Batteries.  Other states have similar lead acid battery regulations at different amounts.

Other examples in this thread from @rarehorology showed the fees really added up for multiple quantities! Presumably eBay was applying whatever the applicable state fee was on a per battery basis.

https://community.ebay.com/t5/Buying/363-sales-tax/m-p/31449192/highlight/true#M333083 

While I'm not sure how many people would have completed checkout on a $50 order with $500 tax, many smaller orders may have slipped through.  The Twitter example I provided was a completed and shipped sale.

Reports are that the calculation error may be fixed now, but there are multiple concerns here.  First, eBay needs to make a public announcement acknowledging the error and immediately refund any excess taxes paid.  Not only is it the right thing to do for buyers, it may head off negative feedback and chargebacks for sellers as well.

Secondly, eBay needs to refund any and all excess fees sellers paid on those incorrect tax amounts.  Sellers using PayPal would have been charged 2.9%.  Managed Payments sellers are on the hook for the full simplified fee on that amount. Regardless of the payment processor used, this is 100% eBay's responsibility to rectify.

eBay also needs to protect sellers from any negative consequences of this error by removing negative feedback and making sure any related claims or defects do not hurt the seller's account in any way.

This issue has been brought to eBay's attention and tyler@ebay says he has passed it on to get more clarity.  While I understand we are in the midst of the holidays, I do hope eBay addresses this issue before end of year.

[pburn]

So, just a few questions/clarifications:

• You didn't actually buy any batteries.
• You don't actually sell batteries.
• Someone else has already posted thread about this issue.
• An eBay staff member has already been involved in discovering an answer.

Are the above statements accurate?

[vociferous_commenter]

The battery/tax reports are fragmented between social media/blogs and Bay's community, so it's often helpful to reinforce messaging through multiple channels and also capture these types of things in a single post so it can be more widely disseminated (as acc756 has done here).

Several issues acc has recently brought to light have been widely shared with media, analysts, and industry experts to overwhelmingly captivated reception.

So perhaps an awareness (if not necessarily gratitude) that someone like acc is working to advocate and ensure important items like this break out of the 'walled garden' of eBay's community forums is in order.

[pburn]

Guess we'll have to agree to disagree about that.

[valueaddedresource]

@pburn  

Some of the posts I saw about this issue were on the buyer board or technical board and only addressed this from the buyer perspective.  While I think that is an important perspective, it also occurred to me that sellers may have missed it on those boards and/or that the impact to sellers had not really been addressed.

Yes, an eBay staff member is involved, but so far there has been no acknowledgement of what actually caused this issue (the lead acid battery explanation seems most plausible to me given the numbers I've seen but confirmation may be helpful for those who were affected).  There has also been no statement yet about what is going to be done to rectify it.

Bigger picture for me is how this reflects on the marketplace as a whole - because that affects us all regardless of what we buy or sell here.

Those extra fees are not called out separately, so it was all lumped in as "tax" (with a disclaimer about collecting tax and "applicable fees" but not clearly spelling out what portion is tax and what part is an additional fee or what the fee was for).  Many people posting about it did the math and thought eBay was charging 300% tax or whatever the number worked out to be.

It's not a stretch to think at least some of those would be buyers may have been left with the impression that eBay and/or eBay sellers are either incompetent or not at all subtly attempting to rip them off.  Either way I'm sure it was an experience that will be remembered the next time they are shopping online for anything, not just batteries.

I personally think all of that makes this an issue worth bringing attention to, but we can certainly agree to disagree on that.

[jayjaspersgarage]

Some message board members police every comment as if their existence depends on it.  I am guilty of the same type of banter.  I think it is important that you post messages like these to help people see where ebay is overcharging them in many areas.  Keep up the good work.

[valueaddedresource]

This is one example from Twitter. 

He still hasn't been refunded the excess $5 that was charged in error.  The fact that eBay hasn't even acknowledged the issue, let alone done anything proactive to rectify the situation for affected buyers or sellers is completely unacceptable.

CEO Jamie Iannone has said "openness, honesty, respect and doing business with integrity drives our success."  Also in his words, his vision for eBay is a “tech-led re-imagination — a plan that will hinge on building compelling next-generation experiences, making eBay the partner of choice for sellers and building lifelong, trusted buyer relationships. We will become the best global marketplace to buy and sell."

Building lifelong trusted buyer relationships and being the partner of choice for sellers cannot happen until eBay and Iannone decide to put those talking points into action.  It's clear there was an error of some kind that caused overcharging of tax for some buyers, which would have also resulted in overcharging of fees for some sellers.  eBay needs to own up to it, take responsibility and make it right.  That is what doing business with integrity means.

[1tuna]

.............general reply...........

ther is no doubht in most sellers minds that ebay is collecting money it does not need to.

anybody involved wit GSP sales has go to knw that all those taxes/charges  are not necessary and are uncalled for..the GSP was set up to generate tax revenue off the backs of unwitting buyers.PB get to collect fees for collecting fees.the more they take the more they make

lots of fees collected  by PB are unfair and thats just the way it is..........ebay is no different

[valueaddedresource]

tyler@ebay  any update on this issue?

[tyler@ebay]

Hi @valueaddedresource - I don't have any update on this. I'm still working with the teams involved to help them understand what occurred. 😶

If you have any more examples of it still happening I'd appreciate them! 

[valueaddedresource]

Thank you tyler@ebay  - as I said, reports are that the calculation error seems to have been fixed, my concerns are more for the other issues stated in this thread.

More examples can be found here https://community.ebay.com/t5/Buying/363-sales-tax/m-p/31447157/highlight/true#M332963  and here https://community.ebay.com/t5/Technical-Issues/Multiple-reports-of-people-being-charged-overcharged-... 

As far as understanding what happened, I would think eBay's technical and tax departments would be in a better position to provide that answer than unpaid volunteer community members.  Obviously something happened which caused the tax calculation for batteries to be wildly inaccurate.

I provided some pretty clear information with screenshots in this thread pointing to the possibility that it could be related to state regulations regarding lead acid car batteries.  Many states have these kinds of regulations. It may be called a return incentive fee, a core charge, or some other terminology but basically they are designed to provide incentive for the proper recycling/disposal of these specific types of batteries so they don't end up in landfills.

I'm sure most of us have experienced buying a new battery at the auto parts store and being charged a fee that is then refunded when we bring back the old battery - that's what I'm talking about and it appears to me that the issue here may have been that those fees were being charged on *all* batteries, not just lead acid car batteries.

If you look at the dollar amounts being reported and the state, the numbers add up if you consider what normal tax would be plus the additional lead acid battery fee.  NY has a $5 fee, which fits with the Twitter example I provided, and WI has a $10 fee which fits with examples for both a single battery and 50 batteries (resulting in over $500 tax (50x$10). 

Again, this is just an educated guess from someone who has no visibility to eBay's inner workings, but I'm sure your tech and tax teams can confirm if in fact there have been any recent updates or changes to account for state fees on car batteries and if so, if those updates were incorrectly applied to all batteries for a certain amount of time.

Hopefully that provides more clarity and a better understanding of the issue, and also hopefully we can expect an expedited resolution to the other issues raised in this thread regarding refunds for both buyers and sellers for taxes and fees charged in error, as well as protection for sellers from any negative consequences that may occur to their accounts as a result.

[valueaddedresource]

tyler@ebay  - here's another example from Reddit that I believe may have been this issue.  This one was a battery box, which suggests this was possibly something that was affecting all battery related categories.

https://www.reddit.com/r/Ebay/comments/kh754j/charged_518_tax_on_a_205_item/

It was canceled and refunded - but I'm sure the seller was still on the hook for the PayPal fees or MP fixed fee, depending on how the payment was processed.

[wastingtime101]

I've read a lot of cases posted around the internet about this battery tax issue. If I come across new examples I'll try to remember to post them here.

[valueaddedresource]

Thanks @wastingtime101 , I appreciate it!

[valueaddedresource]

tyler@ebay  - that Reddit user has confirmed the battery box was listed in the "other multi-purpose batteries" category.

They also confirmed that the regular sales tax for their location would have been $0.18 and their state has a $5 car battery return incentive fee, which would account for the $5.18 total tax on their $2.05 order.