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eBay Rolls Out ‘Luxe Tax’ and Escrow Requirement for Watches

eBay
eBay Rolls Out 'Luxe Tax' and Escrow Requirement for Watches

If you sell watches on eBay, you’ll pay higher fees beginning in May. The fee hike on sales of watches at any price is to pay for eBay’s marketing of high-priced, luxury watches. Consider it a “luxe tax” for all watch sellers.

To give a taste of what’s changing:

  • Sellers enrolled in Managed Payments with no eBay Store currently pay 12.35% plus 30 cents for selling a watch up to $1,000. That will jump to 15%. (There are tranches for items that sell for over $1,000.)
  • Sellers enrolled in Managed Payments with an eBay store currently pay 11.5% plus 30 cents for selling a watch up to $1,000. That will jump to 12.5%. (There are tranches for items that sell for over $1,000.)

We found one seller reacting to the fee increase on the eBay Seller Discussion Board, who said the 15% final value fee was “profit breaking.”

eBay explained in its April 12th announcement that the fee increase in the Watches category was in order for it to spend more on marketing and product innovation – and it’s clear it’s all about luxury watches:

“Our broad-based multichannel marketing has helped increase new luxury watch buyer traffic on eBay. As we continue to focus on the luxury watches experience, we are increasing final value fees in the Watches (260325) category. This will allow us to invest even more in luxury watch marketing, social media, SEO, and product innovation as we drive towards becoming the leading platform for luxury watches.”

While social media and SEO are not generally areas that require large outlays, eBay wrote, “We’re marketing to watch enthusiasts with targeted campaigns that are resulting in unprecedented numbers of new and repeat luxury watch buyers. We also launched a dedicated social handle to reach watch enthusiasts with a community management team that focuses on this daily.”

eBay announced a new escrow requirement at the same time:

New escrow payment option for high value watches
“As part of our ongoing focus on creating the best watches experience, starting the week of April 20, 2021, you will see an optional payment via escrow through our partner Escrow.com for luxury watch listings priced at $10,000 and up.

“Escrow can give you greater confidence when you sell high-value items by confirming your buyer’s identity. Escrow services are customary for many high-value purchases, such as home sales and business acquisitions. Both sellers and buyers of luxury items have asked us to incorporate an escrow payment option to facilitate wire transfers for high-value transactions on eBay. If you list watches priced at $10,000 or more, we recommend that you register with Escrow.com. Learn how to create and use an escrow account on Escrow.com

“In addition, eBay covers any processing fees for escrow services so buyers won’t pay any additional fees.”

Buyer and seller FAQs on Escrow are available on this page, where eBay states: “Currently, qualifying items sold at $10,000 or above require Payment with Escrow.com.”

If you’ve been paying attention, you know that eBay has been focusing a lot of attention on three categories: luxury watches, high-priced sneakers, and collectible trading cards – part of a new vertical strategy. If you have any thoughts on what might be next on eBay’s radar screen in terms of new categories getting the “vertical” treatment; fees; escrow requirements; authentication services – or anything else – let us know!

Update 4/18/2021: Digging deeper into last week’s news, we recalled eBay’s announcement from September 8, 2020, when it lowered fees for sales of high-priced watches, writing:

“For sellers who are active in managed payments, the marketplace is lowering final value fees in the Watches category for watches sold over $1,000. Managed payment sellers can save up to 35% in final value fees as compared to the final value fees they previously paid.”

At the time, it also announced the launch of escrow for luxury watches when it planned to make it available by the end of the year, writing in its September announcement:

Escrow Payment: eBay is introducing escrow payment for high value watches to elevate the purchasing process for its buyer and seller communities. In partnership with Escrow.com, the most licensed online escrow company, the new escrow payment experience provides an additional layer of trust when buying and selling luxury watches by ensuring the entire experience proceeds safely and securely for both parties. The buyer is protected as they have the opportunity to inspect the item before payment is released, while the seller is protected by being able to track the transaction at every stage, ensuring payment is received. The feature will begin rolling out in the fall and will be available on all eligible listings from all U.S. sellers by the end of the year.

Here’s how it works:

  • Together with Escrow.com, buyers will pay using escrow services on watches sold for $10,000 or more on eBay.
  • Escrow.com facilitates transactions by keeping the payment in a secure escrow account which is only released when all of the terms of an agreement are met. The buyer will have seven days to inspect and examine the watch, before accepting the item. Once accepted, or if the seven-day inspection period has passed, returns will not be available.
  • For sellers, there is no risk of charge-backs or escrow processing fees.

We also recalled that eBay announced in July of last year that it would make escrow services available on eBay Motors and in the eBay Motors App through a new partnership with Escrow.com.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

7 thoughts on “eBay Rolls Out ‘Luxe Tax’ and Escrow Requirement for Watches”

  1. Ebay is doing absolutely nothing at all for trading cards other than creating a glitchy PWE tracking system that really does nothing more than give Ebay an excuse for charging the Seller the 5% FVF for having to many late shipments. Since the first scan, if you get one at all, is at the sorting station, if you have next day shipping scheduled on your Ebay account, the odds are good that your first scan is going to be outside of your stated timeframe so Ebay gets another defect on you and before you know what hit you are being charged the 5% FVF fee penalty on all of your items, including the high end stuff unless you have those under a different account. I am in a number of FB card groups and none of those that have used it have anything positive to say about it. Those that got a sudden surprise and hit with the 5% penalty are absolutely livid and as most others in the card industry are now looking for other sites to sell on. I have found a new one and am hoping that with me driving business there that it will slowly but surely become a new landing point for card collectors like Ebay used to be.

    Good luck Ebay as once again you have done nothing but shoot your company in the foot and driven off that much more business, especially in the high end cards as Sellers continue to look for new ways to sell their items. They don’t love paying the original 12.3% but can live with it. Unfortunately between Mangled Payments and the problems getting their money, especially on the higher end items, and then finding out Ebay has baited them into falling into below standard on their accounts so they can collect that additional 5% penalty, they are now livid with a site that many of them, myself included, help build when it first was established. Then to top it all off, that 5% is not refunded if the person returns the cards, which is happening more and more if the item does not grade a perfect 10, even though the Seller showed a picture of the actual card as well as stating it was on NrMt/Mt and of course Ebay backs them up completely and once again the Sellers take the hit. Why should Ebay care, they at least made 5% on the item as well as all the investment income on the funds they hold forever and a day.

  2. This is the Perfect scenario for Google to have a “Time Pieces” tab in its Shopping area.
    The vendors sign up for Stripe Payments and VOILA ! No more pesky Ebay problem.
    Yes, “Ebay” has been synonymous with “Big Problem” for about 10 years.
    Same with the “Etsy” problem.
    Google is about to FLOOR these venues and bring Profits back to micro businesses.
    There will be, potentially, hundreds of American Vendors ready to serve You.
    Slowly, a vetted List of stores will emerge.
    Eventually, Google will be the Shelter from the Storm for All American Vendors.
    Goodbye, So Long – Etsy, Ebay, and other entities seeking to destroy the Little Guy.
    That makes Google “The Little Guys Revenge”.
    :o)

  3. @The End , are you serious? Google?

    What, your not happy with them just spying on your browsing history, email, and if you have an android phone, where you physically go. You need to have them know what your selling and how much money you make from it?

    about a year and a half ago some law was passed (not sure what it was). But I got an email from google showing “my timeline”. It showed everywhere I went in the past 3-4 years by tracking my phone. It showed a map and showed where I was on every singe date down to the minute. Are you serious?? Google?

  4. @Covid-19: To me, a “luxury watch” is a Rolex, or the $1M Richard Mille watch that Rafa Nadal wears. If it’s a “luxe tax,” why don’t the higher fees start on watches $1K and above? If I was selling $10 kids’ watches, I wouldn’t be too happy about paying a higher fee just because I was selling something labeled a watch.

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