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Newegg Marketplace Makes Changes to Returns, Holds, Sales Tax

Newegg
Newegg Marketplace Makes Changes to Returns, Holds, Sales Tax

Newegg is changing its Terms of Use for sellers on the Newegg Marketplace, according to an email notification forwarded to EcommercBytes by a merchant who sells on the site.

According to the notice, Newegg will no longer be the retailer of record – instead, the retailer of record will be the seller. The changes take effect October 1st and are detailed in the following notification:

Important Updates Coming Soon

Dear Seller,

Thank you for your continued support on Newegg. We’re emailing you about important updates coming soon to our Newegg Marketplace. We’re making a number of improvements toward our goals of communication and transparency striving to find ways to help enhance our customer’s shopping experience on Newegg.

Seller will be the retailer of record
Seller shall be the selling party in the sales transaction. Commencing October 1, 2021, Newegg will be reaching out to request for your company’s ownership information. This is part of our due diligence process and regular monitoring of seller accounts.

Reserve balance to withhold payment – Effective October 1, 2021
Newegg may withhold an amount to account for potential returns or chargebacks. The amount to be withheld is based on historical return and chargeback rates. The sales run rate and the balance on the account will also be taken into consideration in deriving at the amount to be reserved.

30 Days Return from the date Product is delivered – Effective October 1, 2021
Currently, our return timeframe is within 30 days from invoice date

Tax collection & Remittance – Coming Soon (US Only)
As the retailer of record for the transaction, the Marketplace seller will direct Newegg to charge and collect sales tax to any jurisdiction within the United States. For states that follow the Marketplace Facilitator laws, Newegg will collect and remit sales tax on behalf of the Marketplace Seller.

Your feedback is important to us. If you have any questions or concerns, please do not hesitate to email us at marketplacesupport@newegg.com. Thank you for your continued support on Newegg.
Newegg Marketplace

The seller who forwarded the notification email said many sellers already have to wait 15 days before getting paid and said the new holds policy places a bigger burden on sellers.

He also had plenty to say about the new returns policy. “They are increasing the return time, so for most sellers this will increase the time from a minimum of 28 days to up to 40 days after an order was placed.” He compared this to a 14-day return policy at most retailers in categories in which merchants sell on Newegg Marketplace.

He felt the longer return policy would result in an increase in buyer remorse and returns fraud. The seller said sites such as Facebook Marketplace only give buyers 3 days to inspect an item before returning, “and they seem to be thriving.”

Note that the marketplace is also going to begin collecting sales tax through the Marketplace Facilitator laws.

Currently Newegg calculates, displays, and charges customer sales tax for sellers’ product orders shipped to certain states and remits sales taxes to the tax authority of those jurisdictions.

Most changes take effect on October 1, 2021, according to the email Newegg sent to marketplace sellers.

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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. See disclosure at EcommerceBytes.com/disclosure/.