Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sat May 16 2020 23:22:17

Early Adopters of eBay Payments May Be Out of Luck

By: Ina Steiner

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Despite playing guinea pig to eBay's Managed Payments when it launched in 2018, it appears early adopters of the program will be forced into a new fee structure eBay is rolling out in July that includes a per-transaction fee of 30 cents. 

eBay had promised early adopters they would be grandfathered into rates that were in effect when the program launched on September 24, 2018 through 2021. eBay executive Vikas Mehta led the initial rollout of payments in North America in 2018 and stated the following during eBay's weekly chat session on August 22, 2018:

"Our goal is to have selling fees lower than they are today. The payment processing fees for the initial launch are a flat 2.7% with no fixed fee, and no refund fees. This is your rate through 2021 for signing up for the initial launch of managed payments."

While eBay hasn't publicly announced the new fee structure going into effect in July or how it will impact those sellers who joined the program in 2018, a seller said they were notified that the new July rates would apply to them.

In a section of the email titled, "We're changing our fees starting late July," eBay wrote:

"We've simplified our fees. You will pay only one final value fee, consisting of a category-based percentage of the total amount of the sale plus a fixed fee per order. You'll no longer pay separate payments processing fees. This change supersedes any special pricing you may have had in the past."

While eBay also stated, "Most sellers can still expect to see overall savings," early adopters currently don't have to pay any fees in the event of a refund or cancellation; that won't be the case under the new rate structure (eBay will keep the 30-cent per-transaction fee).

Sellers continue to have questions about the new fee structure in which eBay is merging payment processing fees into final value (commission) fees, you can read more about the new rates in EcommerceBytes Update.

Update 5/17/2020: See more information in today's Newsflash article.

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Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Marie

Mon May 18 13:33:20 2020

@Fistfulofdollars

Have you looked at the fee difference on International sales?  I would be very interested to read what your findings are on that.  To my knowledge there is no way to block international buyers from paying with a different currency and the seller will be responsible for the conversion rate of 3%.

Plus the fees on international sales as I read it is on the total sales too.  So it will now be on the actual S&H the buyer pays [it is not currently like that, the fee is on the first US shipping rate stated or if it is free shipping there is no fee] and any taxes on the buyers invoice too.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

by: Silver Ice King This user has validated their user name.

Mon May 18 15:01:26 2020

@Salesrep1

I have no problem paying the discount fee on the Sales Tax as that has been that way forever with CC processors.  The problem I have is that ebay is charging the FVF on the sales tax under the guise of simplified payment methods.  In my State Ebay is already making a  killing on the Sales tax that is charged as they and the city of San Jose made an agreement that all of the sales on Ebay that have tax collected for the state of CA nor originate in the city of San Jose, which is an absolute lie since they do not even have any inventory to be sold.  This allows San Jose to collect the 1% (there are various amounts but using this as example)  local tax on every CA sale which should be going to the local where the sale took place in CA or for out of state buyers to the city where the buyer lives.  Instead San Jose gets it all and after $5 million has been collected Ebay receives 30% of all local taxes received by San Jose which has been estimated to be $10 million per year in stolen money from the taxpayers of CA.  

But that is not enough for Ebay, now they need to illegally charge a fee for collecting the tax for any and all states.  They do not even have a program in place that charges the correct Sales Tax for each state as many states exclude certain items from being taxable, but that would mean that Ebay actually would have to invest in something that will cost them a lot of money and its easier to just overcharge everybody, especially since they are now going to get around 11% of that money via fVF plus whatever other amounts they have cut deals with the various states to receive for having to spend the time as all other Sellers must do to accurately file their sales tax reports.  I am not talking the 1-3 % that some states already allow all Sellers to keep to help cover their costs, but the amounts that i am sure Ebay has negotiated with these other states for having to collect the Sales Tax for them.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Marie

Mon May 18 15:17:52 2020

@Silver Ice King

" The problem I have is that ebay is charging the FVF on the sales tax under the guise of simplified payment methods."  I too am firmly against this, however there has been no "guise" by Ebay.  They have flat out said it is a FVF on Sales tax.  They have not hid that fact.  If someone didn't read the information that is accessible that is different, but Ebay has stated this and is not hiding it in any way.

You hit the nail on the head.  That is one of my major objections to a FVF on sales tax.  Not just your state, but other states pay Ebay for processing the sales tax.  Ebay is being paid for their services and they are being paid by the states in which they provide this service for, which is exactly who should be paying for this, NOT sellers.

"...now they need to illegally charge a fee for collecting the tax for any and all states."  What law are they breaking?  I've read this before and I always ask, but either the post just gets angry I asked or ignores the request.  But I ask because I don't know.  What law are they breaking by doing this?

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Lightning

Mon May 18 20:35:38 2020

@Fistfulofdollars said it all:

''out of 123 sales to date (highest sale incl. tax: $355.83, lowest: $20.23) the fees were higher on 64 sales, lower on 59, but overall, I would be $2.90 to the good (saved) if on MP.''

Everyone is ignoring the math right in front of you, because people can't do math.  It's hard.  (Not really)  

For most, except MAYBE those with an overall average sale of $4, God help you, this change is NEUTRAL.  Meaningless.  

Every time eBay changes something, the fearmongers come out and decry it.  PLEASE roll your wheelie chair over to your calculator and do the math to SEE if it really matters before you jump to conclusions.  

This change is NOTHING.  It's just a procedural change that overall has almost ZERO effect.  It may cost you a little more at times, or maybe a little less.  Pocket change either way.  The .5% rate drop just about covers everything, and sometimes more.

Anyone, including myself, who has posted here on this subject, has spent more money in their invested time than they will possibly lose all year.  If after all this, you can't figure out that this change has no teeth, then Forrest Gump was right: Stupid is as stupid does.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Lightning

Mon May 18 20:40:37 2020

@SIK
"The problem I have is that ebay is charging the FVF on the sales tax under the guise of simplified payment methods." ....AND dropping the overall FVF by .5% to compensate.  What is so hard to understand about this???

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

by: Fistfulofdollars This user has validated their user name.

Tue May 19 00:03:08 2020

@Marie

I did not factor currency conversion in any calculations. I do not sell outside the US and I didn't read any further into the MP outline regarding whether or not there is a conversion fee for foreign currency.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Marie

Tue May 19 02:17:23 2020

@Lightning

My numbers say about the same thing as yours, so far for US sales.  With the exception of International sales.  Those fees are increasing due to how they are calculating the fees.

While I appreciate the reduction in the FVF on the product, I can't get on board with a FVF on sales tax.  Ebay already gets paid my the various states for their services to collect and remit these taxes.  And then there are the international taxes that are charged on a buyer's invoices sometimes.  I just don't think taxes should have a FVF.  I get money processing fees, but not a FVF.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

by: ebayout This user has validated their user name.

Tue May 19 04:31:58 2020

I've been on ebay for 20+ years...$500,000+ sales.
Have they sent me a thank you card?
Have they given me a free month's store fee?
Have they treated me the same as the guy who signed up yesterday?
Suffice to say...the feeling is mutual.
So...no, ebay You can't have my bank account #...or my SS #.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Marie

Tue May 19 13:42:33 2020

@Fistfulofdollars

Oh I wasn't talking about the conversion rate that could be charged on an international sale.  But the fact that the simplified FVF will be charged on the entire amount that the international buyer pays to the seller.  That is VERY different than it currently is and that will, at least for me, significantly increase my fees on international sales shipped outside the USA.

Currently we do not pay FVF on any taxes that Ebay applies to an international sale, but we will in MP.  Currently we pay FVFs on the lowest shipping rated stated for US shipping, but in MP it will be on whatever rate the buyer pays.  

So if you currently offer free shipping on a listing and you sell to an international buyer with a ship to address outside the USA, there is no FVF on shipping that you charge them for that international shipment.  But in MP there will be.

So all of that even before you get to a conversion rate.  Which Ebay has been silent on if they are going to give us the ability to block buyers paying with a non US currency like you can in PP.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Lightning

Tue May 19 22:43:25 2020

@Marie
I hear you on principle, Marie, especially that international situation.  But I am all for something that is easier, if it comes out about the same.

We didn't like the sales tax, and we didn't like PayPal taking a fee on the tax, but very little backlash about that move.  EBay wants to charge one rate for fees on the item, shipping, and tax, and REDUCE the overall fee so that the numbers work out the same (or very close), and everyone is screaming grand theft.  As long as it is about the same, which it appears to be, I am on board.  

Right now, it's 9.something for FVF on the item, 10% FVF on the shipping, 2.7% on the processing (If on MP), no FVF on the sales tax (unless it's through PayPal), and the 30 cents gets bounced back and forth like a ping pong ball.  They say that's a mess, and I'd say it's hard to disagree.  One small silver lining is that they are proposing removing that multiple line item 25 cent charge.  That alone could make the whole thing wonderful for some sellers who sell a bunch of inexpensive items to one buyer, like model train parts, seeds, patterns, etc.

As far as international, the only non-US country I ship to is Canada. When the time comes, I'm adding $5-$10 to the shipping to cover the added cost, if the new FVF is on that international shipping.  Like Tool says, just put it on the buyer's bill.  Any loss of sales won't affect me, as I do so little in Canada.  I only open it up as a courtesy to some regular customers there.  But this is a good excuse to shut it down, and blame eBay.

For those with a large volume of international sales, no doubt it will be felt.  By both the buyer and seller.  Another adjustment.  And it will be harder to stay competitive.  Maybe eBay didn't factor that in, as they're not the brightest bulbs on the street.  

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Marie

Wed May 20 01:52:46 2020

@lightning

The 25 cent per item purchased on a single payment in MP will be gone in July.

The FVFs on International is for the entire payment.  So if it is to a buyer in a country that Ebay has to charge tax on like Australia, you will also pay FVFs on that sales tax at the international rate of 1.65% above your regular FVF for that category on Ebay.  And if there is a currency difference another 3% on top of that.

It came to light today that Ebay has nothing in the plans to allow a block for sellers to block international buyers paying with non US currency like we currently can in PP.

Also Ebay has told their current MP members that in July they too will be subject to these new rates.  The agreement Ebay had with some of those sellers to hold fees down to what they are currently paying until the end of 2021 is gone now.  Ebay is not going to honor that agreement.  These fee increases will hit these sellers much harder than those of us coming into MP in July because they are paying lower rates right now.  

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

by: Snapped This user has validated their user name.

Wed May 20 09:28:55 2020

How many more frogs have to die before the survivors (so far) will finally realize that eBay will just keep throwing another log on the fire under the pot?

Some say - no big deal - it’s “just pocket change” - as if they have a right to judge what ‘value’ that should represent to all. How many more ‘promises’ just eBay break before it becomes ‘unacceptable’?

Do the math? Sure. Why not spend your time on that ‘necessity’ unceasingly instead of on the things truly needed to do your business?

Hop on in then. The water’s fine.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Marie

Wed May 20 15:25:22 2020

It isn't as bad as some want you to believe for those entering MP in July.  Except on International sales.  

For me, international sales are important but not a main part of my sales, so I will just stop shipping internationally come July.  And if I get an international sale with a ship to address in the USA, and if that buyer pays with a different type of money other than US funds, I'll determine at that time on a case by case basis if I want to cancel the transaction for a problem with the address or honor the sale.

There are gains. We can now get our FVF [simplified fee] refunded when we do a cancellation or a refund.  That is not something you can get through PP anymore.  And for those that qualify for the TRS discount, your discount will be calculated off the Simplified Fee which contains the money processing fee and the FVF on shipping, which currently you do not get the discount on those fees.

Now for those that are currently in MP the fee structure change is big for them because of the reduced rates they got for being in the program while they were still working on its functionality.  And they should rightfully be rewarded for that.  Ebay however has decided that they have had enough rewards apparently.  Sad but sure seems to be the truth.  

I am however firmly against the FVF on sales tax but I don't think anything will come of that no matter how much we protest.  But I will continue to protest anyway.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Lightning

Thu May 21 01:41:23 2020

@Snapped
We're all in the frog Jacuzzi, always will be.  It's eBay's pot - we just get to cook in it.  EBay can break as many promises as they want to, pull the rug out from under you.  It's like you vs. a tidal wave.  Tidal wave wins.

The ''pocket change'' reference is the relatively low amount of money this simplified fee involves in contrast to the extreme indignation taken by those who don't measure its implications.  You feel much better when you just put on your sheep costume and follow the critics, wrong or right.  Your head feels much worse when you do the responsible thing and ''do the math''.  So I get why people end up on that side of the fence.  It's easy.

I didn't know there was EVER a time in business when we didn't have to ''unceasingly'' evaluate changes in the business landscape.  I must have been out of the room during that 15 minute podcast.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

by: FeelingFroggy This user has validated their user name.

Thu May 21 08:48:54 2020

Ebay would be better served if they just eliminated all fees and just lumped them into on fee and call it a service charge. They the people wouldn't have anything to cry about. If you are a credit card processer that is what you do. On my card processor its called a simple fee at 3 per cent.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Marie

Thu May 21 12:39:00 2020

@feelingfroggy

Well they took your advice.  That is exactly what they are doing.  They just call it by a different name.  Simplified Fees.  Once we get past this initial change when Ebay raises the Simplified Fee we won't know what the actual breakdown is.  It is just the first round you can back into what the breakdown is.  Future changes of the fee won't have that option really.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

by: GotToGetOut This user has validated their user name.

Thu May 21 16:40:04 2020

Marie, you're so right.  It will cost more.  Why Ebay insists it will cost most people less is ridiculous.  That's what really bothers me about Ebay.  They lie.  Years ago, they started counting neutrals as negatives (duh!! -- the only thing I ever saw them reverse).   Another lie -- the reason we don't want people to over-charge for shipping is because it's not fair to the customer and then when they start charging fees for both the item and the shipping, no problem if they overcharge for shipping.  Etc.  

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

by: censoredandcensured This user has validated their user name.

Fri May 22 07:34:37 2020

@ebayout

"So...no, ebay You can't have my bank account #...or my SS #."

You gave them to PayPal so what's the difference? eBay needs them for the same reasons PayPal did. Keep in mind that the IRS requires them to issue a 1099-K if your gross transactions and number of transactions exceed $20K and 200. Otherwise they would shut you down if you didn't/don't provide that info. And remember, they need your bank account # for the same reason PayPal (or any payment processor) does - to transfer money to your bank.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

by: lancecorp This user has validated their user name.

Fri May 22 17:04:03 2020

Most people are upset because they don't trust Ebay with that information - plain and simple. They have not treated sellers well in the past, are not transparent, have mountains of glitches, and have been hacked at least once. Many like myself have no confidence in the site.

Perminate Link for Early Adopters of eBay Payments May Be Out of Luck   Early Adopters of eBay Payments May Be Out of Luck

This user has validated their user name. by: Lightning

Fri May 22 22:18:20 2020

@Marie re: ''And for those that qualify for the TRS discount, your discount will be calculated off the Simplified Fee which contains the money processing fee and the FVF on shipping, which currently you do not get the discount on those fees.''

Could you tell me where you found that info?  As TRS discounts are now, you are correct that the discount is based on the item FVF only.  Since the item price is ALWAYS known, why would they now base the discount on the fees paid for the  item, shipping, and taxes?  Just because they will be lumped together, doesn't mean they can't be un-lumped back to the item price, or does it?  I mean, all amounts (item, shipping, etc) and fees are listed separately on the invoice, no need to even break them back out.  Curious when/if that info was presented.  Hoping that's true, would like to see it in print.

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