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Fri Mar 24 2023 10:02:38

Do eBay and Marketplace Pricing Policies Need Scrutiny?

By: Ina Steiner

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What do gym memberships and the price of house paint have to do with the fees eBay and other online marketplaces charge sellers? In light of recent news stories, it could mean marketplaces should check their pricing policies.

First up: surcharges. According to a news story on Cleveland.com, a consumer filed a class action lawsuit against Sherwin-Williams claiming it tacked on a 4% surcharge at the checkout line for supply-chain issues that have caused prices for goods to skyrocket in recent years.

The lawsuit alleges the surcharge amounts to deceptive pricing for shoppers and accuses Sherwin-Williams of using the surcharge to make it appear prices remain low.

eBay instituted a surcharge on sellers in 2018 (also known as penalty fees) - "You may be charged final value fees if you violate our policy of buying or selling outside of eBay, or we may apply additional final value fees if you are not meeting our performance expectations." eBay explains how some of those fees work as follows:

"If your account doesn't meet our minimum seller performance standards for the US in the evaluation on the 20th of the month, you'll be charged an additional 6% on the final value fees applicable to sales in the following calendar month. 

"If your rate of 'Item not as described' return requests is evaluated in your service metrics as Very High in the evaluation on the 20th of the month in one or more categories, you will be charged an additional 5% on the final value fees for sales in those categories in the following calendar month."

The eBay penalty fees against sellers are different from the reported Sherwin-Williams checkout surcharge, but sellers who suddenly find themselves paying an extra 5 or 6 percent more in commission fees to eBay may feel similarly outraged by the policy when it hits them. It's a practice that has never been challenged legally, as far as we know.

Another news story may have more direct implications for online marketplaces: the FTC is proposing a rule that would require businesses to make it easy to cancel subscriptions.

If the FTC implements the new rule, it appears marketplaces and service providers would be required to allow sellers to cancel their subscriptions at any time - for example, sellers with an annual eBay Store subscription who find themselves locked in.

In addition, services would have to send a reminder to customers every year:

"The proposed rule would require sellers to provide an annual reminder to consumers enrolled in negative option programs involving anything other than physical goods, before they are automatically renewed."

Naturally sellers themselves will have to adhere to the new rules if the FTC implements them. Would they impact you, and are there other questionable or troublesome pricing practices you encounter when selling online?



Comments (10) | Permalink

Readers Comments

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by: GetAGrip This user has validated their user name.

Fri Mar 24 10:42:37 2023

Unlike the sherwin williams problem Fleecebay charges are upfront and seller is warned well in advance. Nothing hidden about it. Sellers just chose to ignore it. Its not a surprise at the cash register.

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by: pace306 This user has validated their user name.

Fri Mar 24 12:49:28 2023

The article here is correct as (I think) Ina means that those fees (both of them) is whats known as "unjust enrichment".

What is a cause of action for unjust enrichment?

A cause of action for unjust enrichment arises wherever there is a benefit received by one party at the cost of another.

In SW's case - the TRUE costs of an item are hidden and a surprise for the end consumer

In eBays case - theres no damage to eBay and therefore they have no right/reason to charge anything.

*please note that I have been saying this for sometime* as have many others here. You cant just "put anything you want in a TOS" and expect it to be legal.

"California courts “have frequently construed causes of action labeled ‘unjust enrichment’ as a ‘quasi-contract claim seeking restitution,’ this was propounded in Rutherford Holdings, LLC v. Plaza Del Rey, [2] The appellate court in the Durell v. Sharp Healthcare has also held that “unjust enrichment is synonymous with restitution”."

But I %99 doubt that anything will happen in eBay's case, since eBay will (falsely) claim that a sellers bad behavior causes it (eBay) loss since buyers will blame the poor performance on eBay and not on the seller.

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by: GetAGrip This user has validated their user name.

Fri Mar 24 13:36:42 2023

@pace306

As ebay should. Sellers are representatives of ebay. If they are losey sellers and don't perform people blame ebay with the thinking Ebay should have gotten rid of the bad sellers.

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by: Fruitylovesyou This user has validated their user name.

Fri Mar 24 19:05:23 2023

Ina I think its more for traditional consumers like a Netflix or Norton subscription. fTC does not give a flying rip about any of the sellers online. Nope.  Its less than 3 months before the INFORM act is required by marketplaces to have their programs in place and there is a huge amount of info that Is being grabbed right now that blurs the lines between that law and the others. Seriously I think the sellers need to come up with contingency plans to protect their money because no one knows just how far these venues will take it.



They're not representatives of ebay. This isn't a trade association.

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This user has validated their user name. by: Marie

Sat Mar 25 03:27:20 2023

I've never liked the Penalty fees as I think it makes it very hard for a seller to work out of them and to improve their business.  It has always seemed to me that there are likely much better ways of accomplishing improving seller behavior.

With that said, whether these sellers are suffering in silence or just come here, it is rare to see a post in the Ebay Community from a seller affected by the penalty fees.  IDK if that means very few sellers get caught up in this or what.  It isn't likely a number Ebay would report publicly.

I have always found that from time to time Ebay has a completely different definition of a word than the rest of the world.  Subscriptions is one of them.  In the rest of the world Subscription means you will get something like a magazine or access to a gym or etc. for a stated period of time at a certain rate.  That rate hold for the entire subscription.

On Ebay Subcriptions can change with notice to the members to include the price of the Store but a seller can't cancel or downgrade the Store during the Subscription period without penalty.  So Ebay can do as it pleases but the Seller is tightly restricted.  To me this is not what a Subscription is suppose to be.  Now sellers save a good amount off the monthly fee with a Subscription, but they simply are not protected as that fee can change if Ebay says so.

I currently is very easy for a seller to cancel a Subscription, but it will cost them!!  The closer it gets to the end of the Subscription the less the penalty is.

Ebay does remind store owner 60 days or so in advance that their Store is coming up for renewal.  So that isn't an issue or shouldn't be.  I suppose some may ignore the email, but that doesn't mean Ebay didn't send it.

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by: Sierra This user has validated their user name.

Mon Mar 27 10:12:31 2023

''... for example, sellers with an annual eBay Store subscription who find themselves locked in.''

Based on what I read several years ago, I've been under the assumption that eBay sellers with an annual store subscription but wanted to cancel it would simply be charged the difference between the monthly store fee & the annual store subscription for the months they'd used. I've never seen/heard where eBay sellers have been ''locked in'' to an annual subscription when they wanted to cancel their store's subscription.

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by: Sierra This user has validated their user name.

Mon Mar 27 10:24:14 2023

Several years ago, one of the local Pizza Hut carry-out only stores added an unusual fee. I don't remember the exact name, but it included the word "California." It might have been something like "California convenience fee." I think this was a moneygrab by that particular Pizza Hut store. I didn't like it, but just rolled my eyes because paying it was cheaper than taking the time (and gas) to drive about 3x farther to the next closest Pizza Hut carry-out store (which has NEVER charged an additional fee).

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by: mepatriot This user has validated their user name.

Fri Apr 7 07:16:45 2023

The far bigger issue is the onerous, deceptive and fraudulent usage of so-called ''promoted listing,'' aka, ''pay-to-play,'' which was foisted on all eBay sellers a few years ago (if you want your items to remain visible in common searches) without their input, but which is now reaching an absolute crescendo of abusive, coercive and financially devastating effects upon nearly all small eBay sellers.

EBay provides no proof of efficacy if you choose to go along with this POGROM, and a quick visit to their ''community'' message boards will show that many, many sellers have had it.  Some are just walking away.  But, for eBay to treat longstanding sellers of Ten, twelve, fifteen or twenty years (and more) with PERFECT FEEDBACK SCORES, and perfect customer service ratings, as if they do not count for anything if they haven't been willing to give over the last vestiges of minimal profits to eBay just to have their items seen (as they always were prior to the one-sided institution of this extortion racket) is unconscionable, and, in my opinon, very probably actionable.

Many sellers like myself (12 years+, all perfect CS scores) have invested hundreds of hours and hundreds of thousands of dollars into being a good seller, only to now be shut off from public view if we are unwilling to be stripped of our last remnant of profit.  AND, many posters at the eBay community have talked about the lower levels of PL agreed to having, now, little discernible effect; and, that you must constantly give over a greater and greater percentage to have any noticeable impact at all on your views and sales.  If that is not extortion, I don't know what is!

To me this is not only extortion, but quite possibly restriant of trade, consumer fraud, and bait and switch.

Some legal firm could make a killing here if they got up a class action.  Just my opinion, of course.

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by: mepatriot This user has validated their user name.

Fri Apr 7 07:25:08 2023

Oh, and just a warning about the so-called ebay "community. " They make a big deal all the time about how it is supposedly not open to eBay employees, but I've noticed that the "rockstars" and "superstars" who constantly cheerlead for every eBay screwup, rigged program, and AI-generated B.S. "decision," always flock together to hit the little "adventurers" and other newish posters who complain about the "pay-to-play" scam, and other eBay rackets, overcharges, etc.

AND these posters can be as nasty as they want to newer posters who complain, and if that little poster responds in kind (and usually far less nastily) they are the one to get suspended.

I am currently serving my fifth suspension (30 days) for responding to a superstar that her post about the PL racket having no effect "on hiding a seller's items" with three simple words..."what a load.".   ....LOL.

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by: Sierra This user has validated their user name.

Sun Apr 30 11:18:46 2023

@mepatriot - Common sense dictates that when a seller's costs go up, their prices should increase as well.  



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