Why Are We Paying the 13% Fee on Shipping & On Tax?!?
Summary: A discussion was initiated by everything-wonderful expressing frustration over eBay's 13.25% fee, which is applied not only to the shipping costs but also on the taxed amount, arguing that this practice is unreasonable. marnotom! responded humorously but pointed out that despite frequent complaints, this system has been around for a while, sharing personal insights from past experiences. mrdutch1001 advised familiarizing oneself with platform policies as the fees are calculated on the total transaction, while reallynicestamps explained payment processing norms and costs. byto253 critiqued the fee structure as a hidden increase, and while agreeing eBay’s model may be frustrating, emphasized the importance of understanding the industry norms. Towards the end, debill1427 suggested adjusting sales strategies, but was reminded that the discussion's relevance may have waned over time.
This is ridiculous . We pay the 13.25% or w.e it is fee on the shipping cost and on the tax. ON THE TAX?! wow . I dont even get that money, the government does. Why is the person buying the item taxed, then I'm taxed on top of the tax?! this is literally blasphemy. I sold a $44 item and after fees ( which were $10.56 ) I'm left with like $35 . $10.55 in fee's on a $44 item....It woulda been one thing if it was actually 13% fees and they took like $7 which is 13% of $44 . Then eBay puts a cheeky little 'Order earnings' at the bottom as if thats how much I actually made when I still have to pay to ship it. Go to the library to print my goddamn printing label because if I dont buy them off eBay and go print it, I have to charge more on shipping and nobody ever buys the item because I price myself out of the sale. This is a joke.
debill1427
·2 years agomrdutch1001
·2 years agoyou have responded to a thread from 2023 that has little relevance anymore...
mrdutch1001
·2 years ago@kh-phdan
ZOMBIE THREAD FROM 2023!
byto253
·3 years agoShipping I am ok with as that was abused when there were no fees on shipping many moons ago.
Simple greed for 13.25% fee on tax, just have to figure if the total fee is worth it for you. It is a back door fee increase. If it was for "handling" the transfer it would be waaaay less. The credit card companies sure would like to get a 13.25% fee on the tax charged on goods. The imposition of taxes has been a great windfall.
But, that is the lay of the land.
reallynicestamps
·3 years agoThe credit card companies sure would like to get a 13.25% fee on the tax charged on goods.
Credit card companies DO charge their fees on the taxes.
And have since ... I remember paying sales tax on a wax dinosaur in Buffalo NY when I was a child of eight or so. So in the early 50s.
There were not many credit cards around at that time, but Diners Club charged their fees on the ENTIRE amount of the purchase.
Buyers, like yourself, don't realize this.
Many don't realize that the merchant is paying fees on credit card payments.
And those fees vary with the average size of payments made with cards.
byto253
·3 years agoYes, credit card companies always have, I never disagreed with that. I had a merchant credit card account in the 80s, with the old slide carbon copy card imprint machines and even in the old less competitive, more manual days, we did not pay over 5%. And if I recall correctly it was lower and the typical small business rate was 3 to 4%. Currently with digital technology and electronic fund transfers, the average merchant rate is around 1.5%. Even for a market vender using square trade the rate is 2.6% + 10 cents per transaction.
eBay's taking of 13.25% on taxes collected cannot be justified as simply a processing fee, it just does not add up. At the 13.25% it is a de facto back door fee increase and collecting taxes has become a nice profit center.
It is the lay of the land, and as sellers we have to look at the full impact of fees and decide what makes sense for us. That is fine and the way it is, but the idea that the 13.25% is to just cover the cost of process and remitting the taxes does not add up.
Anyway, we seem to each have similar posts whenever this topic is posted and we can agree to disagree.
reallynicestamps
·3 years agoI absolutely agree on the 13.25%. Since eBay is collecting on the entire payment, the fee should be adjusted.
Even though the actual dollar amount is going to be small, it would make sellers happier.
My bugaboo is that many of those complaining have no idea (and refuse to learn) that this is Standard Practice, that merchants have been paying it for ... ever, and that it is legal.
On the third hand, most retailers are only processing taxes for their own location, while online venues process for nearly 100, including US, Canadian, Australia, UK, and EU taxes. So there is that.
I wonder if a tax holiday would make for happier sellers? Maybe August or January, whichever is a general low point for sales?
The 13.5% is another can of caterpillars.
marnotom!
·3 years agoWhen Managed Payments fully kicked in, the 12.35% FVF hit on the transaction value was an adjustment over the former 10% eBay FVF plus the former (30 cents +) 2.9% PayPal fee. As PayPal fees have gone up, at least some of the increase we're now seeing in FVF might be due to increased payment processing fees.
I wouldn't be surprised if one of the reasons eBay and Adyen went for combining FVF with payment processing fees was to keep everyone guessing about the split between the two. And it would eliminate complaints about why FVF didn't apply to the taxes on the sale but payment processing did.
One thing that doesn't get mentioned about credit card merchant account fees is that they not only apply to taxes on a sale, but restaurant and other service industry tips as well. I suppose the rationale is that in countries where tipping isn't a thing, restaurant servers are paid better and meal prices are a bit higher to allow for that. It does add to restaurant operators' bottom line, though. In most jurisdictions in North America (and possibly elsewhere), restaurant operators are allowed to deduct the merchant fees from the tip before disbursing it. Not sure which practice I find more irksome: that of the credit card processors or that of restaurant operators.
byto253
·3 years agoThere is no world where processing is 13.25%. Credit card fees average 1.5% now, a reasonable processing fee as large sums are moved electronically quickly and efficiently. Comparing merchant credit card fees to eBay's 13.25% is not even in the same ballpark, even if charged on tips.
eBay charges it, fine, but I don't think even eBay tries to rationalize it by saying it is just for processing. Defending a 13.25% fee on taxes collected on the basis of "processing costs" does not add up. I don't think eBay themselves tries to justify it on that basis.
I don't complain about the fee on taxes - I get it, it was an opportunity for eBay to increase effective fee rate and revenue and they took it. I make my decisions on that basis. But let's not pretend there is a benevolent angle to this where the poor company is only covering its processing costs.
This is a publicly traded company looking to maximize profit. As it stands, it is a win-win for governments and eBay, they both do better with it.
marnotom!
·3 years agoI apologize if I was unclear in my post, but I wasn't trying to compare eBay's fees with credit card merchant fees. I was trying to go into more details about card payment processors' modis operandi. I was also trying to point out that eBay didn't simply add its old FVF of 10% to PayPal's 2.9% to come up with the Managed Payments FVF percentage. I think eBay is more concerned about an average amount they generate in revenue from a sale, not the actual percentages.
If eBay didn't charge its "simplified" FVFs on sales and didn't charge FVFs on the full transaction value, all it would do is come up with a mathematical split between eBay's listing and selling-related charges and Adyen's payment charges that would likely see a higher total percentage for both than the "simplified" Final Value Fee.
When the dust settled on the Managed Payments rollout, sellers who did the number-crunching and shared it on the discussion boards came to pretty much the same conclusion: up to a certain point, something like 7 or 8 percent in taxes charged for a sale to the US, they were paying less in FVF than what they were in the PayPal days. For sales with higher sales tax charges, they were paying more. Averages at work.
Again, apologies if I was unclear in my posts, but I wasn't trying to suggest anything along the lines of what your response suggests. When I wrote about eBay and Adyen "combining FVF with payment processing costs" I was referring to whatever costs eBay was trying to cover with its former method of calculating FVF with whatever costs Adyen is trying to cover in its payment processing charge which is now folded in with what we know eBay's FVFs to be today.
reallynicestamps
·3 years agoThe Standard Practice in the payment processing industry is to regard the buyer's ENTIRE payment as the "thing" the processor is ummm.... processing.
The processor doesn't care what you bought, how it was shipped, or whether or not it is taxed.
The ENTIRE payment is what the processor is handling.
And the ENTIRE payment is what the fee is paid on.
Look at any cash register receipt you have handy.
Notice that the bottom line is the total.
THAT is what the merchant paid his card fees on.
Merchants pay two percent or more of the ENTIRE customer payment to the processor.
Including taxes.
And the smaller the amount of the payment, often the higher the fee charged.
Which is why many corner stores refuse credit or debit cards when you buy a pack of gum.
The fee is greater (many convenience stores pay over 10% to the processor) and eats all the shop owner's profit.
https://www.youtube.com/watch?v=x-o3CJytIPE
mrdutch1001
·3 years agoGenerally speaking it is in a seller's best interests "to be in the know" and acquaint oneself with the rules, polices AND FEES associated with the sellling platform on which a seller is listing their wares....
What you are describing in nothing "new"...although apparently "new to you".
Fees are on the TOTAL transaction.
https://www.ebay.ca/sellercentre/selling/seller-fees
https://www.ebay.ca/help/selling/fees-credits-invoices/frais-pour-les-vendeurs-particuliers?id=4822
https://www.ebay.ca/help/selling#selling-fees
"I still have to pay to ship it".... buyer pays the shipping so how did you not allow for that in your listing pricing?
Know what you sell, Sell what you know...
Hoping you feel better after that rant!
Have a great week!
everything-wonderful
OP3 years agoMy point is we shouldnt pay fees on top of taxes that s*** is ridiculous. Do You work for eBay? You seem to be on their nuts pretty hard on these forums
marnotom!
·3 years agoI will admit that describing this practice as “literally blasphemy” does almost put a fresh spin on things, though. Thanks for the Monday morning chuckle.
everything-wonderful
OP3 years agoif you had a dollar for everytime someone posted this, You still wouldnt be able to cover the fees!
marnotom!
·3 years agoIn the old days of eBay, my wife and I sold many items on a consignment basis for a friend. I can't remember the cut we took, but it was more than 13.25% but less than 50%. Believe me, once we did the number crunching and took stock of all the work we put into listing, selling, and shipping these items, we realized that we'd seriously undervalued our services. Would you consider $10.55 enough compensation for listing, selling, and shipping a $44 item on behalf of someone else? We wouldn't.
And that's the way I look at eBay's fees: Would I want to get paid what we pay eBay for selling something? Guess that makes me greedier than eBay.