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By now, most sellers have likely gotten used to eBay's policy of collecting Final Value Fees (FVF) on the total cost of a purchase, including the shipping fees.

Though it has rankled many merchants, that policy is today a cost of doing business on the marketplace, and appeared to be an effort by eBay to crack down on sellers who tried to skirt the fees by lowballing the price of their merchandise and then overcharging on shipping.

But what happens with those fees when sellers end up refunding some of the postage that shoppers pay? Can sellers expect to receive a partial refund from eBay?

The short answer, according to several veteran sellers, is that it depends.

Babette Ogawa sells art glass supplies at the store Rocky Mountain Glass Crafts. Ogawa depends on eBay's shipping calculator to process transactions for the store, which carries a wide variety of items that range in weight from less than an ounce to several dozen pounds.

But she maintains that the shipping calculator routinely overcharges for postage, in part because when a seller purchases multiple items, it adds the box size for each one, as if they were all to be shipped individually.

Ogawa explained that her store displays a message at each step of the checkout process asking customers who are purchasing multiple items to email her before finalizing the transaction, that it will save them money. But in practice, most shoppers just click through and either don't notice or ignore the warning.

The result is substantial overpayments for postage that Ogawa, like other sellers interviewed for this story, refunds to her customers. But by that time, eBay has already assessed its FVF on the original amount calculated for postage.

"When eBay first started charging a Final Value Fee on postage, I knew that this would be an issue for my business," Ogawa said. "I contacted eBay and they told me that I could apply to get the Final Value Fees back on orders where I had refunded postage."

And at first, that proved to be the case. Ogawa approached eBay with records for a couple of transactions for which she had refunded shipping overpayments, and the company credited her account for the portion of the FVF assessed on the overages.

"At that time I was told to just keep track and when I had a few to call them. I called them a second time and was credited with no questions asked," Ogawa said.

She explained that she planned to contact eBay again with records of the accumulated overpayments for 2011, but in the hectic finish of the year, "I just got busy and let it go. When tax time rolled around and I saw that I had paid Final Value Fees on thousands of dollars in leftover postage, I vowed to keep track this year."

And keep track she did. A couple of weeks ago, Ogawa hired a temporary assistant to comb through all of her PayPal records from the first of the year through Dec. 1 and add up the postage refunds. That 10-hour task produced a report that showed at least $3,600 in refunds for shipping overpayments.

Armed with those figures, Ogawa contacted eBay's customer service department. But unlike her first two calls to secure an FVF refund, this time the representative said that he could not issue her a credit. An appeal to a supervisor produced the same result. Ogawa suggested that she fax over the report, but was told that would not change the decision. The representative invited her to email a scanned copy, but only so that he could show his supervisors, reiterating that the decision to deny the refund was final.

Jan Lane, who runs the Collector's ONE-STOP store, had a similar experience, though when her customers overpay for postage, it's not usually due to eBay's shipping calculator.

"Every day I have multiple item sales - sometimes the buyers wait for a combined invoice, but many do not. In the cases where the buyer has overpaid significantly I issue a partial refund for their overpayment," Lane said.

Earlier this year, Lane contacted eBay customer service with a list of transactions for which she had refunded a portion of the postage, and received a partial refund for the FVFs she had paid. She had no trouble when she made the same request the next month.

But the last time she called, she was told that she had too many credits pending - six, she said - and that her situation was under review by management, but that no refund would be forthcoming.

Like Ogawa, Lane made two successful attempts to obtain a refund, but was turned away the third time.

Such was almost the case for Terry Cohen, proprietor of Terry's Treasure Shop. The first time Cohen called customer service about an FVF refund, the representative was reluctant, seeming confused by the request. But eventually, after Cohen provided the relevant item numbers, she received her credit. The second time she called, the process went more smoothly.

But when Cohen called on Friday, the representative told her that eBay could not issue a refund, explaining that the FVF was assessed on the transaction as a whole, and not broken down between the cost of the item and shipping and handling charges. Cohen responded that, in fact, her records showed the charges delineated. The representative countered that eBay would only refund the FVF if the entire order had been canceled. Cohen asked for a supervisor. After a wait, the representative came back on the line, apologized, and said that eBay would issue the refund after all, and took down the 14 item numbers Cohen had called about.

"So if you stick with your follow through and make the dreaded "speak to a supervisor" request, I believe they will do the refunds. Obviously they want to try to talk you out of doing the refunds and make it a long, drawn out phone conversation," she said.

These sellers' stories point to an inconsistency in eBay's policy in handling postage-related FVF refunds, and highlight the tension that many sellers feel when assessing shipping charges.

Lane objected that eBay has sellers "between a rock and a hard place" when it comes to shipping, at once pressuring sellers to keep the charges low by incorporating shipping in the Detailed Seller Ratings, while at the same time driving shipping charges up by including them in the FVFs.

"This is one of my biggest complaints with eBay - first that they would even take a Final Value Fee on shipping cost, and secondly not reimburse the seller for issuing a refund to the buyer for overpayment of shipping charges," Lane said. "The buyers rate us on shipping costs - and who doesn't think shipping is high? - but in order to keep from losing money on shipping, the seller has to increase the shipping cost to at least cover" the FVFs.

Free shipping, of course, would resolve the issue, but for some stores, such as Ogawa's glass-craft shop, eBay's shipping calculator is a necessary part of the business, flawed as it may be. Ogawa estimates that she has refunded nearly $6,500 in shipping overpayments in the last two years.

"I offer free shipping where practical," she said. "But because my customers buy several items in each transaction, and my items weigh from half an ounce to 60 pounds, I cannot see changing the way I do business. If there were a good solution, I'd opt for that solution. But for now, calculated shipping is the only way I can run my business."

After several emails and phone messages, eBay spokesman Ryan Moore declined to provide the company's policy on issuing FVF refunds for shipping overages - or confirm whether one exists. (In 2011, eBay spokeswoman Johnna Hoff had indicated that the company was mulling the development of a formal policy.)

Moore did say that he believes that substantial overcharges produced by eBay's shipping calculator - to the point where sellers like Ogawa would ask for an FVF refund - are relatively rare. After hearing Ogawa's story, Moore said that eBay would investigate the matter.

The experiences of Ogawa, Lane and Cohen suggest that eBay may not have a formal policy for handling FVF refund requests, or that if it does, it is unevenly applied. The sellers interviewed for this story suggested that no policy exists, and Ogawa said an eBay representative had once told her that the company considers FVF refund requests on a case-by-case basis.

"I don't know if this is a change in their policy or if they ever had a policy," Lane said of her experience being denied a refund after two previous successes in recouping the FVF overpayments. "There has never been an announcement that they would give refunds."

Comment on the EcommerceBytes Blog.

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About the author:

Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects since 2007, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here.

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