eBay Plans to Charge Final Value Fees for Shipping Costs

In an announcement about changes to their fee structure coming in April, eBay has posted that they’re going to now count shipping costs towards the final value fee.  This means that if you win something for $0.99 that costs $2.00 to ship, instead of taking a fee off the 99 cents, they’re going to take a percentage of the whole $2.99.

International sellers and those who ship internationally are already in an uproar.  This is considered to be an outrageous move on eBay’s part, and may well be illegal.  If a shipping cost is not an actual shipping cost according to the United States Postal Service, and eBay is taking a fee from it, then basically what they’re doing is defrauding either the buyer or the government.  Unless they fully disclose to the buyer and seller exactly how much per transaction is a shipping cost and eBay’s new shipping fee, this will add unnecessary confusion for both.  Buyers may think that higher shipping costs are fraud by the sellers rather than fraud by eBay.

Worse, since eBay is not a worldwide shipping service, for them to charge a shipping surcharge when they are not doing the actual shipping (the seller is), it is fraud on the face.  Sellers will be charged by eBay for a job that their local postal service or a delivery service does.

This could be the final nail in the coffin for the individual or small business seller.  Apparently eBay is telling us that we are very much unwanted.

So if you’ve been looking at something on eBay and have been dragging your feet, if it wasn’t made in a factory in China, buy it before April 19th.  If eBay actually goes through with charging postal fees for not being the post office, they will lose individuals and small businesses altogether, and perhaps some larger ones who will decide it is no longer worth it to ship internationally.  Then there will be whatever repercussions will come from the U.S. Federal government for false shipping charges.

Other gloom-and-doomers have predicted the downfall or total uselessness of eBay before, but in the past, sellers learned how to calculate and absorb the fees.  This time though, they’ve gone too far, and sellers are either no longer going to ship internationally or leaving eBay for more sane selling services.

Remember when I said in a previous post that for an artist, eBay was good promotion?  I don’t know if that is going to be the case after the 19th of April.  We’ll see if they stay as Google friendly when Google gets wind that they’re defrauding customers with fake additions to shipping charges.

5 thoughts on “eBay Plans to Charge Final Value Fees for Shipping Costs

  1. Please understand the difference between a shipping surcharge and a final value fee. Ebay is charging a final value fee on the sell price of the item and the total shipping charges. This fee is 9 to 12%. The only consideration that may be borderline illegal is that ebay is collecting funds on a service that they do not offer or play a role in providing the seller. The USPS, UPS, FEDX or other delivery services have no say in what ebay is doing. The Better Business Bureau is also aware of this new policy and has refrained from getting involved.

    The problem with this added fee is that it cuts deeply into any potential profit that a seller might have gained. Currently, a seller is allowed 50 free standard listings per month. If the item sells, the seller pays a final value fee on the total amount of the sale including shipping costs. The funds are collected for the seller through Paypal which also charges the seller $.30 cents per transaction plus 2.9% on average. This can vary depending on the sale itself, but a fee non the less is charged. So, if a seller sells an item for $10.00 and ships it for $5.00, the cost to the seller is approx $2.25. That is almost 25%.

    By now, you can understand why so many sellers are leaving ebay or adding higher shipping handling costs to offset this new fee. However, a sellers reputation is on the line now, because buyers can leave feedback for a seller essentially “dinging” the seller on low performance ratings. These are called DSRs. If a seller gets low DSRs, ebay can suspend a seller or limited the amount that the seller sells. Either way, Ebay comes out smelling like a rose. Of course, Ebay does have to pay off their 30 million law suit that they lost last year, but this is NOT the ways to do it.

    This would be a great time to start the original principles of Ebay under a new company name. However, the cost up expense would be high in the current economy, but in the long run, worth it.

  2. Couldn’t agree more. There had to be a lawsuit filed in some sort of way. How can they possibly charge a fee for something they aren’t even a part of? It absolutely makes ZERO sense.

  3. Wow! I just got dinged by Ebay and wasn’t aware of their new policy on shipping. I have complained and I am swearing off Ebay! They tried to explain this was to help the buyer and that if we offered “free shipping”then they “the buyer” would be more likely to buy our product. I told them I didn’t care and that I only charged my actual shipping cost. I should have the choice of being charged an additional fee for the way I choose to do business. It is not right for Ebay to take a cut of shipping. They are getting their extra 9% or whatever amount they are taking as their fees no matter what we do and that is wrong! It also goes to prove the theory that more taxes doesn’t make the economy better, it just causes prices to to go up while everything else remains the same or gets worse! Craigslist certainly works well for me on other things, guess I will continue to use it for the smaller items as well.

  4. I found out the hard way about this change. I sold and item that weighted 130 pounds. It was calculated on where they lived. I got hit hard. I ended up paying more in fees than I made. Had I been aware of this I would have raised my items price enough to offset this but then would it have sold? I don’t know. I just don’t understand the greed in this world when the wealthy never consider the lives of the other 99%

  5. Its usury plain and simple at best, at worst its fraud and ebay should be prosecuted! Paypal + Ebay + Shipping owned by one company is just plain disgusting. I suggest a letter campaign to state attorney’s and elected officials. I have included Florida Department of Law enforcement.
    Keep this in mind, charging for a service in a state requires paying tax in that state, both sales and income.

    Henry

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