eBay Payment Processing Was Supposed to Lower Fees

by: pace306

As with ANY large entity, once they charge you some new fee, it will NEVER go away, ever.

Tolls never go down, NYC congestion pricing will never go away, Obamacare swore premiums would go down (they didnt), because once an entity gets its fat fingers on new revenue - it stays there, then goes up.

"Consumer advocates" IRL or people like the famous just retired GRIFTER never help. Its all just a cover (BS).

If you are religious - some believe in the original sin theory. Adam sinned and now 3000yrs later, we all pay for it .

eBays "original sin" was taking FVF on shipping. People came up with a way around eBays choice for how it wanted to get payed (they could have just charged you $25 a month to sell on the platform and not get greedy and hope people sold 10k item online), but this was a choice THEY made.

Most didnt complain. I did. There was a women here "M", who thought it was fair, after all - eBay "deserved" it.

Then eBay deserved the right to charge you extra for lots of things ($5 for a bold title?), extra charges when you fall below standard, FVF on taxes and more. (we dont discuss the FAKE PPC and advertising scam(s) here atm).

So yes, that was a promise eBay made - but it never was about prices going down, was it?

It was about control.

1) eBay bout part of a bank (notice its not a US based bank), so they could do "shenanigans" with your money. Who are you going to complain to? Some guy named Sven in Norway? Call Adyen (if you can) and they will tell you STFU - you arent a client so they need not tell you anything. Its your money in their bank but ...... you have zero say.

They keep your funds (or at least mine) for 3-5 days. Ever get a interest statement? Nah. They money made goes to eBay - to offset its "schemes". Any politician ever fight for you? Nope, Gavin is too busy fighting Trump to protect YOUR rights to that money.

eBay at first hated the Paypal split off idea, but then cozied up to it. Even though Paypal is a dead end company with no future, it still cost eBay a few percent each transaction - so they decided it was a GREAT idea.

Plus Paypal was more seller oriented. Get the right rep and if you could prove your case, you won. eBay hated that. eBay hates its sellers, and letting sellers win is a cardinal sin. Best off, let Paypal go. And they did.

No, fees arent coming down anytime soon (they boarder on PIGGISH now) because  .. they dont have to . Why should they lower ANY price?  The Mafia always wins, always.

by: etectra

Managed Payments was never about lowering prices.

It was about increasing them.

Before Managed Payment all sales funds were transferred to PayPal and then my bank where they started earning interest.

eBay expenses were billed on the 1st or 15th of the month. These eBay fees were paid with a credit card that refunded you 2% back. The credit card bill would not be due for nearly another month during which time my money would continue to earn interest.

After Managed Payments fees were deducted from sales so you could not longer earn the credit card rebate on the fees. You also lost the interest paid by the bank. So in my case Management Payments meant an immediate 2% increase in fees just to lost credit card rebates.

eBay also stopped accepting credit card payments for UPS, forcing you to use your funds, thus losing the credit card rebate for that expense. Yes, you can use a credit card for UPS labels on PirateShip but if you need over the default $100 insurance you can't buy extra insurance from UPS  - it needs to be bought from PirateShip's 3rd party insurance company with questionable terms. On the other hand you can buy extra UPS insurance through eBay, but you loose the credit card rebate.

Another reason eBay forced many fees to be deducted from sales is to take away the rights sellers had when they used a credit card. When eBay kept repeatedly charging my credit card for gallery plus fees that I never use I paid them back by filing chargebacks against them. They finally got the message and stopped charging my account.

Since Managed Payments I've taken other steps to protect my money from eBay.

eBay was given a virtual credit card number as the backup payment method. This virtual card is tied to a real credit card, but the virtual credit card has eBay blocked from charging anything.

With PayPal I would transfer all funds to Bank No. One. PayPal had the routing number and account number for this bank, but I had the bank put a block on PayPal removing any funds from the account - they were only allowed to all funds. This was done after the two initial trial deposits were made and then removed form the account. As an extra precaution all funds were immediately transferred to Bank No. Two, which has no ties to eBay or PayPal. When eBay moved to Managed Payments I established the same setup. Worse case scenario in the case of scam customers or eBay billing glitches is that I pull all my items off eBay and cancel current sales but in no way is eBay going to charge any of my accounts as they see fit.

I would also sign up for new credit cards from time to time with signup bonuses such as a $200 account credit for spending $500 in 90 days. I'd then have my customer's shipping labels earn me that bonus. My customers earned my an extra $2,000 in bonuses over time. This required great credit. You also have to space new applications out over time!

When eBay made Ayden (a Dutch company) the exclusive payment processor of eBay they obtained 15% of Ayden stock.

by: I Must be Crazy

Everything stated by Etectra is correct.  eBay has been working long and hard to chisel away every advantage a seller did have on the platform.  Managed payments not only eliminated the ability to earn interest on the float, but the liquidity most sellers could enjoy was also completely eliminated.  Funds were available immediately, allowing most sellers to use money earned on eBay to purchase new inventory and supplies.  You could turn the same dollar several times in a week.  That is no more.  It now takes 3-5 days for funds earned from a sale to be available for use.  Add to that, the immediate deductions of fees, shipping costs, and refunds from available funds.  There is a rolling balance that eBay retains that earns additional float for them.  I believe this is the number one reason GMV has lagged and even declined over the last several years.

Had eBay executives been better at doing their jobs, activist investors would not have recognized that eBay subsidiaries (Paypal) were more valuable without eBay, precipitating their spinoff and sale. Amazon has multiple subsidiaries and businesses under one umbrella. Nobody is screaming for them to sell off pieces of the company.  

Managed payments was never about reduced fees; that is preposterous.  Even at the start when fees were lower, it was a fraction of a percent. Just enough to give eBay the right to brag about ''lower fees''.  I almost doubt they are lower today. Given all of the disadvantages mentioned previously, it is a net loser for sellers.

by: Bill

That is why I quit eBay last year after selling on there since 1998.
They are a piece of crap and I very tired of their games.

by: my2cents

In 2011 Ebay started charging their selling fees on Shipping.  

When Ebay made the changeover starting in the summer of 2020, we paid PayPal about 2.9% on the total amount a buyer paid which included shipping and sales tax.

We paid Ebay about 10.2% FVFs in most categories.

Then Ebay went to the Simplified Fee in August of 2020 for sellers in Managed Payment.  So 2.9 + 10.2 = 13.1%.  Plus the 30 cent per transaction fee that PP use to charge.

The problem with this is that while the numbers look OK on the surface, much closer to a lateral move in costs, it really wasn't.  

We paid 2.9% on the sales tax when PP was our payment processor.  But when Ebay took over they went to this Simplified Fee we now got selling fees charged on the sales tax portion that the buyers paid.  That wasn't helpful, but it explains why they went to the Simplified Fee structure.

by: Rexford

Yep, and grocery prices were supposed to go down after the last election.

Look at what they do, not what they say.  

When a company has no real business plan to grow sales they will bleed the sellers until the sellers die off.  When your seller metrics drop because USPS lost 8 packages in one month and you had 3 or 4 scammers who dinged your metrics that same company will hide more of your listings.   When month to month, year over year, a company will not allow you to make more $$$ than the threshold that they have set for you, YOU can't grow your business.  When YOU can't grow your business that same company does not reap the rewards of those sales that you WOULD make if they dropped their threshold and gave you visibility 24/7.

by: etectra

@my2cents

"In 2011 Ebay started charging their selling fees on Shipping. "

I believe this was 2010. Part of their multi tier plan to raise fees as described below.

eBay negotiated a deal between USPS, China Post for eBay Chinese vendors in 2010. A eBay representative attended public announcement.

This agreement led to massive loses on international mail by USPS. USPS was unable to increase the fees they were being paid so to make up for the loses they raised domestic prices one or more times a year during Obama's 8 years in office.

In 2010 they only managed to make any money on international mail because eBay's program only ran half a year. From 2011 onward they lost increasing amounts on international mail, costly USPS billions.

eBay cashed in on the increased USPS prices, that they created, by charging FVF on shipping in 2010.

At the time of FVF on shipping eBay tried to con people into believing it would lead to lower shipping costs as the money earned by USPS on these Chinese package would stop USPS from raising rates, which of course was a lie since they were losing money on every single Chinese package.

eBay also tried to con its users by telling them they would be compensated for FVF on shipping by being given "X" amount of listings per month without insertion fees. Although they did give users various amounts of listing per month without insertion fees this why a lie by omission. Before 2010 eBay would routinely run free listing events through the yeat, typically one to three days, in which there were no insertion fees.

These events were by invitation only per their messaging system and not announced ahead of time. The largest invitation I got was for 100,000 listings without insertion fees, but I am sure larger seller got better invitations. This was perfect for me because I assembled listing in GarageSale ahead of time and had them automatically uploaded to eBay during one of these events, thus I didn't pay any insertion fees or a store subscription. I had a bunch of sales in a short amount of time and went back to other work.

One of these events, which eBay did away with after 2010, was more than all the month free insertions they gave you after 2010. So actually they took away a lot of free listings - not give you more.

by: my2cents

@electra
You can Google it if you want.  The change was made in 2011.  Not that it really matters much now.  

by: clarkphilatelics

Managed Payments accounting became a nightmare when payments and charges were comingled. Some offset income, obscuring gross income and some posted as credit card charges. It is obvious that no one at eBay has attempted to use downloaded MP transactions to do accounting. For example, why are eBay Item-ID numbers missing from refunds. Why is the custom label (SKU) missing from some transactions. Why are null column values marked with two dashes that must be removed before the data can be imported into a spreadsheet or database. Why does one column name include double-quote characters. Who does that?

Since eBay started comingling payments and fees, it has been nearly impossible to balance the account. Capture by QuickBooks was incomplete when initially offered. Recently Quicken added the ability to import register entries in CSV format. Converting Managed Payments transactions into an accounting register format is very difficult and may require advanced Excel or database skills. Of course, eBay does not supply account balances in MP downloads and eBay does not download in easer to process formats like Excel xlsx files. Must eBay laziness impact sellers who attempt to accurately account for eBay sales and expenses?

by: NYSteve

@Etcetera- i dare you to write a book   LOL!

i'd have one to add:  get a zero percent 18 month CC, take the 3% balance transfer and put it in a 18 month CD @ 5% (well, that was 6 months ago), then after 18 months get another card to buy the balance off card no.1  

by: Bluedenim2

@Rexford Yep, that is so true for eBay and Etsy. That threshold cap drives me batty.

by: Geetar

@clarkphilatelics. It's disgusting ebays reports. At least when you had paypal (witch wasnt much better) you could compare and correct all the variances. And dont forget about the missing data on sales tax collected the first year state sales tax was being collected by ebay. What a mess that was. I use shipstation for labels, but use it just as much for their reports...to solve the "ebay variances" problem. I guess balance to ebay employees means doing a handstand on walker west's bar stools.