Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Mon Sept 17 2018 21:26:37

eBay to Implement Penalty Fee Policy October 1st

By: Ina Steiner

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eBay confirmed today that it will begin charging US sellers penalty fees for what it considers excessive claims or under-performance beginning October 1st. However, eBay UK sellers caught a break - earlier in the day, eBay UK announced it is postponing implementation for sellers in that country until next year.

eBay will charge an extra 4% Final Value Fee (FVF) when sellers fall below standard. The average FVF is 10%, so 14% is a 40% increase in fees.

In eBay's reminder today, it explained:

"The additional fee of 4% for very high rates of "item not as described" and for below standard performance are not subject to maximum final value fee caps, and will be applied to the total amount of the sale, including shipping. Final value fee discounts, including Top Rated Seller discounts, will not apply to the additional 4% final value fee."

Here's an example it provided on its policy page:

Seller B sold a men's wristwatch for $9,640, including shipping. The seller has an Above Standard seller performance level and a Very High evaluation for 'Item not as described' returns on eBay.com in the Jewelry & Watches category, so an additional 4% final value fee applies.

Final value fee calculation: 10% of $9,640 = $964 (fee capped at $750). 4% of $9,640 = $385.60. Total final value fee: $750 + $385.60 = $1,135.60

Readers should note that eBay's example is an increase in fees of 51%.

A reader emailed us to voice frustration, calling it "the most convoluted, self serving, inappropriate, insulting and ridiculous policy change eBay has EVER done. They will be judge, jury and executioner on a policy that they will receive a financial gain from." 

And, they added, "Let us not forget that eBay promised that SNAD requests would NOT be held against us as long as we resolve the issue with our buyers while it was in the request stage."

Be sure you review the changes carefully as this can clearly be an expensive proposition if run into some troublesome buyers or experience challenges in your business - here's a link to the eBay Announcement board post.



Comments (86) | Leave Comment | Permalink

Readers Comments

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: Bob V2 This user has validated their user name.

Mon Sep 17 21:54:13 2018

I don't understand what the big deal is.  I've sold over 10 thousand items on eBay and not had a single INAD because I am meticulous about accurately describing each item and I provide lots of detailed photos.  All you have to do is be honest.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: captainzombie This user has validated their user name.

Mon Sep 17 22:41:15 2018

@Bob, uhm, you know how many photos I provide along with filling out all of the item specifics and a detailed description? Guess what? People still do not read or view pictures, causing false SNAD claims.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: Vernfern This user has validated their user name.

Mon Sep 17 23:04:02 2018

False SNAD claims is a major concern for a lot of sellers. Sell too many items to people who borrow / can't make up their mind / order multiple items and keep the one they want (abusing returns as SNAD / defective to get free returns) and dinging the seller. eBay does not seem to grasp that ''free returns'' can not work for many items sold on that site - yet this is a way to punish those who do not use that feature.

Ultimately this is just a money grab. It fleeces sellers who simply can not use ''free  returns'' due to the product they sell. However I strongly suspect once a seller has a fee boost, that will be the point where they leave. Then eBay no longer makes any money from that seller. I don't think eBay thought of that... or if they did, they simply do not want that seller around any more.

Too many sellers are not around anymore. eBay is not making a dime from those long lost sellers. I am one of them.  

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: pace306 This user has validated their user name.

Mon Sep 17 23:41:10 2018

TRY AND DO IT TO ME - I DARE YOU - I DOUBLE DOG DARE YOU

Since its eBays finger on the scale - its arbitrary and capricious and illegal.

eBay decides that you lie (in my case I have invoices to prove the buyers are lieing) and just makes things up out of thin air.

Their TOS wont save them in this case

I feel bad for the poor sellers who they do this to - the ones that cant fight back against the big theft machine.

I dont have these issues - but I dare eBay to come at me. They have tried before and failed (with other issues)(Im looking at you VEROpigs). Having 2 lawyers in the family (soon to be 3), that means you never have to think about a lawyers letter :)

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

This user has validated their user name. by: Marie

Tue Sep 18 02:54:22 2018

@Bob V2
Some categories on Ebay are more hot for buyers than others.  Returns happen far too often in fashions, jewelry and electronics for example.  But then there are other categories that have extremely low rates of returns.  It appears you sell in one of those categories.

Being honest in your listings, while a good policy to have, it just doesn't determine if a buyer will file for a return or not.  Buyers change their minds from time to time.  And for some it happens too often.

Since you sell in a category with lower return rates, then you might want to pay very close attention to this change because they are comparing you to what they determine to be your peers.  And if your peers have very low return rates as well, and lets say you hit a bad month and get a few returns for whatever reason the buyers may have, you could end up in the penalty fees very quickly.

Since this is being evaluated by a secret metrics of Ebay's design, it would be very difficult to say it was right or wrong.  This whole thing is just wrong on so many levels.

I don't say all this stuff because I'm worried about myself.  My return rate is low as well.  But that doesn't mean something may not change for a short period of time and enough returns will happen to get me into trouble.

But moreover, I just feel this new policy is WRONG!  Completely WRONG!

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: angryllama This user has validated their user name.

Tue Sep 18 02:56:11 2018

The Opportunity for MAYHEM here is essentially unlimited.
YES, this is ANOTHER silly, venal, Mean-Spirited and TOTALLY UNNECESSARY change to currently silly, venal, and Mean-Spirited eBay policies.
Yet it is Thermonuclearly WORSE.
It does seem insane that eBay CORPORATE would simultaneously try to change the entire ethos of eBay by attempting to HAMMER and POUND all their currently Semi-Happy sellers into becoming UNPAID fulfillment centers AND then PUNISH the GOOD ones with so little regard to PAST performance and in CONFLICT with what should have been in the "settled law" category, e.g. NOT counting Not as Described REPORTS to be equal to ACTUAL failure to work things out with said Reporting SellerS.
MAYHEM ?  keep reading.  
I have had NO problems with COMPETING SELLERS tampering with MY account via BUYING my items for the Express Purpose of leaving NEGATIVE feedback and/or Buying to get the Opportunity to SNAD me over and over to put me into this Silly Awful Execreble FORTY PERCENT increase in FEES for GAWD only knows how many Weeks, Months, Years to come.  BUT THAT COULD CHANGE IN A HEARTBEAT.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

This user has validated their user name. by: Rexford

Tue Sep 18 06:01:45 2018

Just another opportunity for them to steal from sellers.  They promote returns at every turn. Can someone say conflict of interest?  It isn't enough that the rig search and steal from sellers shipping charges--they now exploit/rig returns for profit.

Build elsewhere.  I mean really, is this who you want for your business "partner"?

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: maxmad This user has validated their user name.

Tue Sep 18 06:39:21 2018

instead of protecting consumers, in many cases from dangerous not as described products ebay decides it's better to profit more from those nasty items and sellers.

This has got to be one of the most awful disgraceful things ebay has done to consumers, I hope some lawyer sues the crap out of them, the next time someone is injured from a bad product, because ebay knew there was something wrong with the items , but did NOTHING to stop it, instead of removing the seller and items, ebay lets them continue possibly harming more consumers, because ebay makes more money , a totally ruthless dirty disgusting company.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

This user has validated their user name. by: The End

Tue Sep 18 06:49:31 2018

I've encountered Senior Citizens ( my own mother does this) who will make a purchase for the excitement of getting something in the mail, only to give themselves something to do by going through the Return Routine. Gets them out of the house.....
I tried to explain to my mom what the seller has to endure with her antics only to hear her say, "I don't care".
We need to cut off these buyers.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

This user has validated their user name. by: RKTOYS

Tue Sep 18 07:58:19 2018

@vernfern
Exactly right.  The first time I get pushed into where this fee would apply is the last time I will sell on eBay.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: thriftyone This user has validated their user name.

Tue Sep 18 08:08:16 2018

@ BobV2...I have very low returns, but have had a couple of them lately that I will be getting dinged for that were not valid. The first one was a 1970s patch that was in great condition and they returned it for color, which by the way was accurately displayed in the photographs....this was authentic and I think they had buyers remorse. The second one is a real head scratcher....I will be taking a hit for an item that was received as damaged....here is the kicker....they had not received the item yet; it was still in transit... So I guess you can consider yourself lucky for not getting the same types of customers that a lot of us have had to deal with....

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: TomH This user has validated their user name.

Tue Sep 18 08:18:39 2018

I am with some of the others.  I will never pay that penalty. If that ever happens then I am happily gone completely.

Their policies have slowly pushed me from a store with an average of 1500 items down to their lowest intro store and listings of 50 a month.  And, those few listings are more trouble than anywhere else that I sell on.  For me, it is probably more habit than anything else that I am still on their lousy platform.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: Troy Stiffler This user has validated their user name.

Tue Sep 18 08:55:52 2018

This is another reason to gravitate away from eBay.

I FINALLY got around to developing my own site (which has been sitting there for years). And then properly setting myself up within Google (the feed and Adwords). I'm a bit humbled that I'm getting so much website activity. Still not the scale of eBay. But more than any of the 'junk channels' (Bonanza, eCrater) ever got me. Plus the fees are almost zero (though with Adwords, I'm at around 5%).

Everyone has their own complex market. I wouldn't really know what it's like to sell in the non business-industrial categories. But if you can push away from eBay, do it. They are predators.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: extremetm This user has validated their user name.

Tue Sep 18 09:24:07 2018

This policy is the definition of racketeering and is ripe for a class action suit.

I hope sellers leave in droves and ebay fails. This will be the line for many.

What a disgraceful company.  

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

This user has validated their user name. by: Ric

Tue Sep 18 10:14:35 2018

Watching eBay's backasswards attempts to "improve" the shoppers experience (which are in reality only more money grabs) is like watching rocks swim.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: pace306 This user has validated their user name.

Tue Sep 18 10:50:41 2018

If there are bad sellers - CLOSE their accounts. Its not hard to do, its not complicated.

What it "is", is that eBay doesnt want to do that .....what they want to do is "punish people" by stealing their funds under the guise of "teaching them a lesson".

1) eBay is HARDLY the one to teach anyone anything since they do more wrong then anyone

2) its keeps bad actors on the site

Like with VERO and other areas - eBay is lazy and refuses to fix issues. If they would, theres a good chance that eBay would "work".

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

This user has validated their user name. by: iheartjacksparrow

Tue Sep 18 11:04:26 2018

I'd like to know who is going to be crazy enough to list a $10K watch for sale when a a $5 piece of garbage will probably be returned to the seller.

Since eBay virtually begs buyers to return what they've purchased ("Return this item" button is the default selection on your purchase summary), I'm sure all the executives are gleefully counting the days until October 1st when they can slap the fee increase on a huge segment of their sellers.

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: NDrosos This user has validated their user name.

Tue Sep 18 11:55:26 2018

I have given them feedback numerous times, if they are going to be doing a change like this, there NEEDS to be a way to fight SNAD!

Our business has software to verify every package we pack. We have 2 different employees verify items before they are fully packed in to box. Our software even has images from different angles to visually verify each item being packed is correct.

I can guarantee, it's not possible to be any more accurate than we already are.

It still claims we are "high" and around double of the "average" rate.

I know this is 100% false. The only way those numbers can add up is if "peers" are being calculated as everyone who ever sold in the category, even if they only sold 1 item.

We also do free returns. This reduces SNAD significantly. This means basically, if you do not offer free returns in the Motors category, and sell any sort of bulk, you are guaranteed increased fees.

I feel bad for sellers who have to manually verify, as just a couple mistakes will lead to increased fees.

Furthermore, this is so easily exploitable for abuse. If we wanted to, we could have all our employees order from a competitor, and say SNAD. Bam, immediately our competitor is out of the picture, as they will have increased fees and can not fight it?

It makes no sense until we have the ability to fight this !

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: angryllama This user has validated their user name.

Tue Sep 18 12:48:32 2018

U.K. Rolled Back to 2019 for this FUBAR plan. Perhaps because THEIR CONSUMER PROTECTION LAWS have Teeth in them?

Perminate Link for eBay to Implement Penalty Fee Policy October 1st   eBay to Implement Penalty Fee Policy October 1st

by: thriftyone This user has validated their user name.

Tue Sep 18 13:11:26 2018

I also believe with this new policy in place, sellers need to demand who Ebay is comparing us to...they should provide us with seller IDs or store names or something that we can verify that they are comparing apples to apples...as we all know they are not to be trusted..........

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