eBay began charging sellers penalty fees in October for excessive claims and for under-performance, and in June, eBay will hike those fees
from 4% of the selling price (plus shipping costs) to 5%, the company announced in its April 30th Spring Seller Update:
Final value fee increase for sellers not meeting performance expectations
Starting on June 20, 2019, we will increase the additional final value fees charged to sellers who have very high rates of "item not as described" returns and sellers who are not meeting minimum performance standards from 4% to 5%. See our selling fees article for information about how we calculate final value fees.
Yet the "Seller Protections" section of the Spring Update was an acknowledgement by eBay that it hadn't been doing enough to crack down on bad buyers who file false claims against sellers.
Sellers connected the dots on several threads on the eBay boards:
"What were they doing before when we were reporting buyers?"
"That sounds no different than what goes on currently. What has changed? In particular, if you are indeed listening to sellers, sellers want protection on their current transaction, not future restrictions on a whatever this buyer might do to other sellers."
"This totally ignores and does not address the fact eBay is still charging many sellers inflated 4% fees because of too many returns. Keep in mind, buyers can still lie about the reason for their returns. All it takes is for the buyer to state the item is not as described, then sellers get defects galore, charged more fees, have their account status dropped below standard, etc. All being said, everything eBay stated in regards to these supposed new seller protections is incredibly vague, it also doesn't address eBay's unfair punishment of sellers for circumstances that are clearly outside of their control (buyer changed their mind, lied about reason for return)."
What kind of impact will the June fee hike have on sellers who are impacted? Here's an example from eBay's help pages of how it currently calculates the 4% penalty fee:
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
As of June 20 when eBay raises the penalty fee to 5%, "Seller B" in eBay's example would pay $1,232, an increase of 8.5% from what they pay now, and 64% higher than what they would be paying without the penalty fee.
If it feels like eBay has its hand in your pocket, it's because it does. The value of items sold on eBay's US marketplace dropped 6% in the first quarter, year-over-year, yet eBay's revenue increased.
eBay CEO Devin Wenig referred to it as a "GMV to Revenue gap" and said it would continue (GMV is the value of goods sold on the marketplace, aka sales). In other words, eBay will make more money from sellers for each dollar of sales.
Which begs the questions, does raising the penalty fee to 5% really act as more of a deterrent to poor seller performance than the current 4% penalty, making eBay better for buyers? Or is it about boosting eBay's revenue at a time of decreasing sales?
We don't know exactly how much the penalty fees eBay implemented in the fall contributed to that inverse sales-to-revenue number. But don't you wish your revenue increased when your sales decreased!