Ina Steiner EcommerceBytes Blog
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by Ina Steiner, Editor of
Mon June 18 2018 20:52:55

Do New Penalty Fees Create Conflict of Interest for eBay?

By: Ina Steiner

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eBay must adjudicate SNAD claims, but when eBay sides with buyers, it benefits in more ways than one thanks to a new policy it announced last month as part of the Summer Seller Update. This creates a conflict of interest, one seller asserted in a question submitted to eBay executive Bob Kupbens for an upcoming Q&A video chat.

The issue is more important than ever as sellers feel squeezed by eBay practices around returns - some sellers say eBay is doing less to protect them from buyers who file false SNAD claims (Item Not as Described) to avoid paying return shipping in cases of buyers' remorse.

According to eBay's new policy that takes effect in September, sellers who have high rates of after-sale requests (SNADs and INRs - Item Not Received claims) will face a penalty: eBay will charge them 40% more in Final Value fees. You can read more in June's Update editorial.

A seller said that policy creates a conflict of interest: eBay will receive greater revenue by siding with buyers against sellers in SNAD claims.

She described what she saw as the problem and asked Kupbens in her submission if there was anything in the works to correct it - here is the fulltext of her question for the eBay executive, who will be answering questions next week:

Increased FVF's for SNAD cases creates a huge conflict of interest
The upcoming change to collect an additional 4% in FVF's for sellers that eBay has deemed to have too high of a SNAD rate has created an environment where it is financially adventageous for eBay to allow buyers to abuse the Money Back Guarantee. Simply put, the more bogus SNAD cases that are filed the more sellers that eBay is able to collect an additional 40% in FVF's from.

As an honest clothing seller, a large chunk of the SNAD cases I have received have literally given "doesn't fit" for the reason. These cases are the definition of remorse as I provide many measurements and eBay actually gives "doesn't fit" in the options of remorse return reasons. 

To be clear I am not asking for these cases to be decided in sellers favor or to receive money or credits from eBay. The buyers do not want the item and it is bad business to force them to keep that item. All I am asking for is for an easy option to have obviously bogus SNAD cases changed to remorse after the case has been CLOSED. I understand that it is impossible to make this determination in many cases, but in cases where the reason typed out by the buyer is literally a remorse reason the seller should not be dinged for a SNAD return.

The problem is eBay will soon be financially rewarded for leaving these cases as SNAD. It seems that a neutral 3rd party reviewing return reasons is the only way to remedy this situation. Is anything in the works to correct this massive conflict of interest that eBay has created?

Update 6/21/18: We had a seller ask, "the article mentions both a 4% and 40% increase in FVF. Is that a typo?"

No, that's not a typo. eBay will charge an additional 4% in FVFs. When you do the math, it turns out to be a 40% increase in what you pay in FVFs - here's how we explained it in the editorial in the last issue of Update:

"A savvy seller pointed out that the additional 4% fee is not a 4% increase in fees, but rather, a 40% increase. For example, on a $100 item, sellers would pay an average 10% in Final Value Fees ($10) – with the 4% penalty, they'd pay 14% in Final Values ($14). Sure enough, going from $10 to $14 is a 40% increase in fees."

Thanks for the great question.

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Perminate Link for Do New Penalty Fees Create Conflict of Interest for eBay?   Do New Penalty Fees Create Conflict of Interest for eBay?

by: pace306 This user has validated their user name.

Fri Jun 22 16:37:45 2018

Knowing eBay (scum of humanity)(and thats being NICE to scum everywhere), its really just a tax on sellers.

The tax goes to pay for the salaries of the CS agents that eBay hires "because smaller sellers cant do their jobs right and are unreliable".

Larger sellers dont have to deal with all this - their feedback is hidden and ignored (pay for play).

I guess the next "tax" will be to get sellers to pay for snacks in the vending machines, a "DW learjet fvf", a grounds keeping/lawn "tax", and anything else they can think of.

The flood gates opened when eBay gave themselves the power to FVF sellers on shipping. To quote Dire Straits - putting a FVF on shipping, or this new %4 one on FAKE SNADS that eBay itself creates (since it NEVER believes sellers) really is "money for nothing and your chicks for free".

DW & eBay - your blood sucking partners in ecommerce.

(Im trying to get DW or Bobby Cupcake or even the Grifter to sue me ... !)

Perminate Link for Do New Penalty Fees Create Conflict of Interest for eBay?   Do New Penalty Fees Create Conflict of Interest for eBay?

by: ebayout This user has validated their user name.

Sun Jun 24 17:55:42 2018

I'm no lawyer (my late brother was), so I'm asking on his behalf...
The ebay/seller agreement is essentially a tacit agreement.
Is there such a thing as a tacit agreement in perpetuity, even when the agreement is ARBITRARILY disadvantageous to one of the parties?

Perminate Link for Do New Penalty Fees Create Conflict of Interest for eBay?   Do New Penalty Fees Create Conflict of Interest for eBay?

by: makinmagic This user has validated their user name.

Wed Jun 27 19:52:23 2018

I would LOVE to leave, but unfortunately, this is my only source of income. Damn it, ebay.  

Perminate Link for Do New Penalty Fees Create Conflict of Interest for eBay?   Do New Penalty Fees Create Conflict of Interest for eBay?

This user has validated their user name. by: FEEbay

Fri Jun 29 11:35:07 2018

Well folks---This is it..... We will be saying good riddance to these assclowns come October. We have 3 accounts, and two of them are judged "very high," because OF COURSE--/buyers lie to get a free return all of the time, just like they do on Amazon. Ebay knows this, and they don't care- This is a pure money grab to placate Wall Street, and everyone knows it. Ebay is not getting 14% FVF on my products....forget it. They are less than 10% of our sales at this point, and will be ZERO come October 1st....  

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