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

Sat May 23 02:27:00 2020

@ Lightning

Because they are moving to the Simplified Fee.  It would defeat the purpose of the Simplified fee if for TRS discount purposes they start to break apart the sale and the fees so that they only give the discount on the product price.

That really long thread of Brian Burke's this came up.  And he answered it that yes the TRS discount will be based off of the amount of the simplified fee charged to the seller.

For those entering MP in July there are three things that sellers come out ahead in fees in MP.

If they are TRS and have any listings qualified for TRS+ the discount will be based off the Simplified Fee that includes the FVFs for product, shipping and sales tax, along with the payment processing fee.  So the discount will be larger.

When we cancel a transactions, the Simplified Fee is refunded.  They just keep the 30 cent transaction fee.

When we issue a refund, the Simplified Fee is refunded [unless Ebay forced the refund].  They keep the 30 cent transaction fee.

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

Sat May 23 13:39:29 2020

@Marie - Thanks, I'll check it out.  Sounds like a decent arrangement (for a change).

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

Sat May 23 14:50:01 2020

@lightning

Yes there are some good parts.  The only real issue I see is this darn FVF on Sales Tax.  Everything else I've read I can deal with.

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

Sun May 24 23:42:16 2020

@Marie
The way I look at it is that it is not an FVF on the Sales Tax itself.  It's just a grouping of the various elements that make up the sale, and then an FVF on that mess.  It's a math thing, and the overall rate was dropped by 1/2% to make it work out to roughly the same number.  It wasn't a decision to suddenly start charging an FVF on Sales Tax.  It just happened to be included in the process, but arriving at the same destination.  Faster and easier, and not hurting anyone.

It's just like having to multiply 117 x 5.  You could do it the usual way, like your math teacher would on the board, or you could say to yourself it's 100 x 5 = 500, and 17 x 5 = 85, so the total is 585.  You could do it in your head.  Either way, you get to the same place, so it's all good.

Another hypothetical example is paying Federal taxes.  You deduct the standard deduction, and pay the tax rate on the rest.  So if they said, hey, let's stop with the standard deduction and pay a lower rate on the whole thing, skip that step.  As long as it came out the same, the taxes due were the same either way, it would be hard to complain about making the process easier.

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 25 01:49:30 2020

@Lightning

Yes and as long as you get at least a few sales with no sales tax on them, per my numbers so far it turns out to be a neutral change.  

With that said I still do not like FVFs on sales tax.  It just seems wrong to me.  Just my opinion of course.

But the same isn't going to hold true on International sales.  There are however some information I'm unclear on and still having trouble getting answers out of Ebay.  Hopefully after the holiday they will pay a little attention.

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