Offering Free Shipping

[canadianonlinegoods]

Hey Guys! 

Some eBay sellers in these forums were recommending me to offer free shipping in some of my listings, so I did so.

I offer 3 or 7 day returns and I was told a while ago, if a buyer wants to return the item that was sent to them free shipping,the seller pays their return shipping since it was free.So does this really mean I have to pay their return shipping even though in my returns policy I put "Buy pays return shipping"?

I am just a little confused on that. 

Thanks, Cheers!:)

[pierrelebel · Accepted solution]

To make a long story short, your terms as indicated in your listings mean nothing - I mean absolutely nothing - when you agree to list on eBay. 

Buyers on eBay are protected by the eBay guarantee:  http://pages.ebay.ca/ebay-money-back-guarantee/

Sellers - whether they like it or not - are stuck with that protection.

"Some eBay sellers in these forums were recommending me to offer free shipping in some of my listings"

???

Looking at your listings, I only found one offering "free shipping".  In any case, while "free shipping" is offered in more than 50% of all listings on eBay (yes, most of your competitors offer "free shipping") it has nothing to do with the cost of returning an item should the buyer file a claim that the item received is not what was purchased.

In the last few months I have noticed many sellers who no longer sell on eBay due to that extended Buyer Protection program.

[canadianonlinegoods]

Thanks for the reply. 

Looking at your listings, I only found one offering "free shipping" 

 I have 3 listings live that Offer free shipping, and still working on some listings that I have not yet posted. 

I know what you mean with the Buyer Protection , either way us sellers will loose out. 

But I was told if you, the seller offer free shipping and the buyer (In this case, a honest and fair buyer) requests a return, do they pay the return shipping or the seller pays return shipping was what I was confused about. 

Because what if you have an honest and fair buyer but as you stated the Buyer Protection Guarantee gives us sellers no chance whats so ever.

Since you are an eBay veteran, have you had issues with returns throughout your eBay career? 

I am just curious because as you can tell I just started back in September and hoping to grow but these eBay policies are really scary. 

I am thinking of going to amazon, if anything.

Thanks, Cheers!:)

[pierrelebel]

"have you had issues with returns throughout your eBay career?"

Of course any business will have some issues from time to time.  Once you obtain a substantial volume, you simply price the costs of the problems in your margins, just like retail stores do (typically 2% is built in the price at large retailers to cover their costs of pilferage, shoplifting, etc...). 

Personally, I have sold millions of dollars worth on eBay in over 106,000 transactions in sixteen years and the losses (all kinds - fraud, losses, damages, returns, NSF cheques, etc...) amount to less than one percent of the total value.

"...thinking of going to amazon"

I suggest you take some time really - I mean really - investigating that option for a Canadian seller.  The grass is always greener next door.

As stated often in the last sixteen years, mail order business (directly or through the internet) is not for everyone.

[rosscd57]

Plus - every buyer on the internet, including those buying on eBay knows: there is no such thing as free shipping!

.

[pjcdn2005]

But I was told if you, the seller offer free shipping and the buyer (In this case, a honest and fair buyer) requests a return, do they pay the return shipping or the seller pays return shipping was what I was confused about.

As Pierre said, what you charge or don't charge for shipping has nothing to do with paying for return shipping.

If you return policy says that buyers pay for return shipping in case of a return then that is what happens when a buyer wants to return an item for buyers remorse....they changed their mind, don't need it anymore etc.  If they want to return it because the item is not as described the seller is supposed to then pay for return shipping.

You may be confusing the issue with paying for original shipping. If a buyer wants to return an item for buyers remorse and they paid a separate shipping charge when they purchased the item, you can withhold the original shipping charge when you refund them although you should state that in your return policy so that buyers know what to expect.

The problem with that is some dishonest buyers may then claim the item is not as described instead of buyers remorse so that the seller has to pay return shipping and refund in full including original shipping.

I've heard of sellers using free shipping and withholding the amount it cost them to ship in a buyers remorse return but I don't know if ebay actually sanctions that and personally, I don't agree with the practice.

I've never sold at Amazon but I know that some sellers who sell both here and there say that the grass is not always greener there so if you decide to go there, make sure you know exactly what the rules are before you sign up.

As far as sellers leaving because of the money back guarantee....Perhaps some have but there are always sellers who say they are going to leave or do leave whenever there is a major seller update. But the only real difference between the mbg and the former buyer protection plan is that the seller pays return shipping for a snad.  I don't see that as a huge problem for most sellers although perhaps it is more prevalent in certain categories.

There is also the change of Paypal allowing buyers to file a case for 180 days after purchase but that doesn't mean that customers are going to start filing claims months after the purchase.

[canadianonlinegoods]

Thanks pierrelebel, 

Amazon, obviously I am not jumping to that game anytime soon. But if anything on eBay , I at least have a back up.

I love mail order business, ecommerce is simply awesome. 

Right now, on eBay I am just finding stuff around the house or from other relatives and also finding some deals which I can resell on eBay(which is working for most products). I don't mind if I sell many different types of items but I would also like to sell specific items.

I see you specialize in stamps? I just want to know how you maintain your store with product.

For me, I get at least 3-7 sales a month, which is nothing compared to you but I want to turn it into 3-7 sales a day. 

106,000 transactions, that is really something. Really, not a lot of people can accomplish that in a life time.You must be very proud of yourself. Someday I wish I can be were you are, at least thats my goal. 

 I can say I am sticking to eBay, but I am just really scared for those transactions where I will get scammed and than get the thoughts of dropping eBay(Which I do not want to). But as long as I have you guys on the forums for guidance and your experiences, I should be good.

Thanks , cheers!:)

[canadianonlinegoods]

I see what you mean, you stated that more clearly for me.

Like you said, there is honest and dishonest buyers that will say Item not as described causing us sellers to pay for return shipping. 

I have never had a return yet as I just started but I want to know the process before hand so there is not nay surprises.

Amazon, like you said, I heard stories that its not much better over there but I would also like to open my items to another market to increase more sales.But this wont happen anytime soon, I've already looked into it and Amazon looks a lot more confusing, personally.

Thanks for the replies!:)

[femmefan1946]

I see you specialize in stamps? I just want to know how you maintain your store with product.

Spend 30 years in the business, read a lot of literature including spending over $700 a years on up to date catalogues, buy philatelic estates constantly....

[mr.elmwood]

I think stamp sellers are nuts. I have no idea how you people do it. Of course, you stamp people look at me and my plastic car parts, Ross and his radios, and just shake your heads.

Returns are a red herring. My rate of return requests is a sliver of part of 1%. Why are you focusing on that? Would it not make more sense to focus on the 99%+?

Everything you do to create a good sale is controllable by you the seller. The better job you do up front, the less the odds of a less than 1% return rate.

You are worrying about pennies and dollars are slipping away. That is not good business.

[komics4sale]

To offer Free Shipping or not...........

Generally I think unless you are a large dealer, offering free shipping is not a good thing to do.

For smaller sellers I think you are better off by putting a Fair Shipping Cost in your auctions.

For sellers that sell very low priced items like inexpensive stamps, I find it almost always better to not offer free shipping.

For example, if you sell items for $1 to $2 each & offer free shipping, there will always be a few buyers who buy a lot of items, but pay for each item separately, even if you inform them not to pay separately.

 Paypal will charge you 30 cents extra every time they receive a payment for you.  (ie. they charge their usual 2.9% fee + an extra 30 cent for each payment).

Because of this extra 30 cents, Paypal's commission can be higher the Ebay's fees from lower priced sales.

I've toyed with offering this "free" shipping a few times & have found it to be almost always non beneficial to me.

On a different humorous note, if you have a seller that you don't like......just send them $10 for free, but do it 5 cents at a time.

Ends up to be 200 payments.

They will receive $10, but their fees to Paypal will be:  $10 x 2.9% =  29 cents + 200 payments x 30 cents = $60 for a grand total of $60.29 in fees.

ie  They will end up losing $50.29

Of course you will lose $10, but maybe sometimes it's worth the expense.

[recped]

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@komics4sale wrote:

To offer Free Shipping or not...........

Generally I think unless you are a large dealer, offering free shipping is not a good thing to do.

For smaller sellers I think you are better off by putting a Fair Shipping Cost in your auctions.

For sellers that sell very low priced items like inexpensive stamps, I find it almost always better to not offer free shipping.

For example, if you sell items for $1 to $2 each & offer free shipping, there will always be a few buyers who buy a lot of items, but pay for each item separately, even if you inform them not to pay separately.

 Paypal will charge you 30 cents extra every time they receive a payment for you.  (ie. they charge their usual 2.9% fee + an extra 30 cent for each payment).

Because of this extra 30 cents, Paypal's commission can be higher the Ebay's fees from lower priced sales.

I've toyed with offering this "free" shipping a few times & have found it to be almost always non beneficial to me.

On a different humorous note, if you have a seller that you don't like......just send them $10 for free, but do it 5 cents at a time.

Ends up to be 200 payments.

They will receive $10, but their fees to Paypal will be:  $10 x 2.9% =  29 cents + 200 payments x 30 cents = $60 for a grand total of $60.29 in fees.

ie  They will end up losing $50.29

Of course you will lose $10, but maybe sometimes it's worth the expense.

---

If you are mostly selling low value items, sub $10 including shipping (charged or not) you should have a PayPal micro-account.

5 cents plus 5% instead of 30 cents + 2.3%, break even is about $12.

As for your humorous note, recipients are never charged fees more than the payment itself so not only would it be a pointless waste of $10 there's a good chance you could lose your PayPal account on a permanent basis.

[Anonymous]

"Free Shipping" means the buyers don't have to pay extra for the shipping costs.  That is what it is for!

[rose-dee]

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@rosscd57 wrote:

Plus - every buyer on the internet, including those buying on eBay knows: there is no such thing as free shipping!

---

Sorry, but I have to disagree (or maybe I'm the only exception amongst millions of sellers, which I doubt). 

I do provide completely free shipping on selected items, or as an occasional promotion, i.e. I don't increase item prices to absorb the shipping.  I've said it before, but perhaps it's worth repeating my philosophy: I think rolling shipping costs into item price and making the customer pay his own shipping (while telling him it's 'free") is unfair and disingenuous. 

If I see an advertisement for free shipping, I don't expect last week's item price to be boosted up to account for the seller's cost of shipping.  This goes for eBay as well as for B&M retail stores.  

Yes, it is possible and even easy to hide shipping costs in an item price, but in my view a seller is shooting himself in the foot in the long run making a habit of this ploy.  Why?  Because this is a big marketplace with a lot of choices and eventually I think buyers will figure out which deal is the "real deal" and integrity will win out. Secondly, if buyers figure out which sellers are being honest and which are pulling the wool over their eyes, those buyers will return to the honest seller.  

The way I see it, every truly good deal makes a happy buyer who may come back, and it takes very few of those repeat sales to make up for shipping losses.  I can say this because I've had very good success with my truly free shipping promos. 

[rose-dee]

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@mr.elmwood wrote:

Everything you do to create a good sale is controllable by you the seller. The better job you do up front, the less the odds of a less than 1% return rate.

---

I think you meant to say "the better the job you do up front, the better the odds you'll have a lower than 1% return rate" -- no?  (I hope I'm not mis-reading the intent of your comment). 

In other words, how you treat your customers from the outset will determine your end results.  

If this is in fact what you meant to say, I couldn't agree more.  I think that's a key concept that separates the successful from the unsuccessful on eBay.  And many who come here to complain about the end result just can't see it. 

[mr.elmwood]

Buyers really believe we get free shipping from eBay, in the sense that we do not pay for it.

I can order from Lowes and get delivery at the shelf price with no additional charges for shipping. That is "free" on some level, to someone.

[rose-dee]

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@mr.elmwood wrote:

Buyers really believe we get free shipping from eBay, in the sense that we do not pay for it.

---

Yes, I think you're probably right, but then I have to believe that at least a portion of my buyers will see the shipping charge that's now displayed on those Light/Small Packet labels when I've offered free shipping.  They know they didn't pay for the labels. 

Also I usually tell my buyers what I've paid for shipping (that is, the actual cost) whenever I reduce the shipping for them as a courtesy.  I think it doesn't hurt to remind them that at least a part of the shipping service came directly out of my pocket. 

In saying this, I have to admit that I'm in a somewhat special position, being my own designer and "manufacturer".  I have a bit more of a margin to work with, so I can afford to be a little more flexible in offering free shipping on those items than many sellers can whose COGS and expenses are far higher.  

Still, something rankles in the idea of making a purchaser pay the whole cost of something that you're telling them is free.  Is that right?  I don't feel it is. 

[pierrelebel]

"that you're telling them is free.  Is that right?  I don't feel it is. "

Of course different sellers will have different opinions on the subject.

I try to look at the larger American e-commerce picture where eBay is only a small percentage. The trend for several years has been towards offering buyers "free shipping", meaning no additional payment is required from the buyer. 

LL Bean, one on the most respected names in mail order business has been leading the way as usual.  Large retailers such as Amazon have expanded the market.  It is a reality that sellers cannot ignore.

For more: http://www.retaildive.com/news/6-shipping-expectations-e-retailers-cannot-ignore/225368/

To suggest or imply that there is something wrong ("I think rolling shipping costs into item price and making the customer pay his own shipping (while telling him it's 'free") is unfair and disingenuous.") by sellers offering "free shipping" is "trying to be more Catholic than the Pope" in my opinion.  There is nothing wrong with it.  As you suggested in your post, it is all a question of gross margins.  Many sellers can afford to absorb the cost of shipping while others may find it more difficult to do so.  If our American competitors find ways to do it, Canadians will have little choice but to also find ways to compete or close shop.

We all have a different moral compass but the question of offering "free shipping" or not is not one of them.

[komics4sale]

Thanks for your information regarding Paypal's Micro Account.

I didn't know there was one available.

Thanks also for typing in all the important numbers for me to compare.

ie.  Break-even point of $12 & the Micro Account Fee Charges.

I knew there was a good reason for ebayers  to add &/or take valuable information from these Discussion forums.

Thanks again!

ebay id:  komics4sale

[pjcdn2005]

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@rose-dee wrote:

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@rosscd57 wrote:

Plus - every buyer on the internet, including those buying on eBay knows: there is no such thing as free shipping!

---

Sorry, but I have to disagree (or maybe I'm the only exception amongst millions of sellers, which I doubt). 

I do provide completely free shipping on selected items, or as an occasional promotion, i.e. I don't increase item prices to absorb the shipping.  I've said it before, but perhaps it's worth repeating my philosophy: I think rolling shipping costs into item price and making the customer pay his own shipping (while telling him it's 'free") is unfair and disingenuous. 

If I see an advertisement for free shipping, I don't expect last week's item price to be boosted up to account for the seller's cost of shipping.  This goes for eBay as well as for B&M retail stores.  

Yes, it is possible and even easy to hide shipping costs in an item price, but in my view a seller is shooting himself in the foot in the long run making a habit of this ploy.  Why?  Because this is a big marketplace with a lot of choices and eventually I think buyers will figure out which deal is the "real deal" and integrity will win out. Secondly, if buyers figure out which sellers are being honest and which are pulling the wool over their eyes, those buyers will return to the honest seller.  

The way I see it, every truly good deal makes a happy buyer who may come back, and it takes very few of those repeat sales to make up for shipping losses.  I can say this because I've had very good success with my truly free shipping promos. 

---

According to your theories, thousands of eBay sellers are dishonest and even more thousands of buyers are 'having the wool pulled over their eyes.'  I don't think you give buyers or sellers enough credit. It's all about perception. I've had friends tell me about a good deal that they found and that the shipping is free. When I've pointed out that shipping is never really free they have said that they realize that but that they don't like having to pay extra for shipping...they would rather pay one price. For them, free shipping = shipping is included.

Also, you say that the buyer will return to the 'honest seller'. Do you really think that buyers care whether or not the item they payed $20 has what you call 'truly free shipping' or shipping included? Do you think that they care that I paid $10 wholesale for that item and that you paid $7? No...I don't think that they care about any of that. Shipping, original cost, labour, etc etc....its all costs and for the most part, buyers only care about they pay, not what the seller's costs are.

Unless a seller has relatively unique items for sale, they are going to set their prices within a certain range to be competitive. In most sellers in my category have free shipping, I am probably going to want to list my items with free shipping too. But as I said, it is all about perception. If similar items are priced at $19.99 incl shipping, I might set mine at the same price rather than go over that $20 mark. But if other like items are priced at $15 + 4.99 shipping, I might feel comfortable going a little higher and listing at $17 plus $4.99 shipping. In the second scenario, my bottom line would be higher so don't assume that just because the shipping price is included in the total that buyers are paying more.

Obviously we all do things differently but it's wrong to state that some sellers are dishonest just because they don't do things the same way that you do.