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.