Saturday October 20, 2007

eBay - Watch out for "Handling" fees

I recently purchased a very small item on eBay. Less than a square inch in size; well under an ounce in weight. I paid $2.99 for the item. Shipping (and "handling") was $7.98.

Following the principle of Never attribute to Malice what can be explained by Stupidity, I assumed this was one of those companies that ships everything by UPS, DHL, or FedEx. I assumed that the carrier charges a silly rate and that the seller passes that on the customer.

It turns out I was wrong.

The item arrived, folded into an invoice (one sheet of paper) and tucked into a standard USPS letter-sized envelope. Actual postage: 41 cents. So, where did the balance of $7.58 go? Apparently, it went into the seller's pocket. :-(

As the seller explained to me when I complained, "eBay charges us so much that we can't stay in business without charging handling".

Let me get this straight. For a $3 item, eBay charges 0.40 for the listing and 5.25% of the closing sale price. So, the seller "lost" 56 cents on this transaction. I paid $3; the seller kept 2.44.

Ah, but the seller also charged me $7.98 for shipping and only spent 41 cents. Figure in the price of the envelope, maybe as much as 45 cents? So they also pocketed a little over $7.50 more in return for folding a very small item into a piece of paper and sealing that into an envelope. Pretty good rate for what, 5 minutes work? 10 at the outside?

At the very least, I would have liked to see the seller use a padded envelope (or even just attach the item to a sheet of stiff cardboard)! Do something to make it appear that I paid for some actual handling!

Surely this is against eBay's rules and policies? Let's look...

Users may not use systems or techniques to circumvent, or avoid, eBay fees. Sellers should review the ‘Some Examples’ section below to ensure they are not engaging in practices that circumvent eBay fees.

eBay Rules and Policies: Circumventing Fees;

Sellers may charge reasonable shipping and handling fees to cover the costs for mailing, packaging, and handling the items they are selling. While eBay will not prescribe exactly what a seller may or may not charge, eBay will rely on member reports and its own discretion to determine whether or not a seller’s shipping, handling, packaging, and/or insurance charges are excessive. Shipping and handling fees may not be listed as a percentage of the final sale price.

Sellers who want to be sure they are in compliance with this policy may charge actual shipping costs plus actual packaging materials cost (or less).

In addition to the final listing price, sellers are permitted to charge:

Actual Shipping cost: This is the actual cost (i.e. postage) for shipping the item.

Handling Fee: Actual packaging materials costs may be charged. A handling fee in addition to actual shipping cost may be charged if it is not excessive.

eBay Rules and Policies: Excessive Shipping Charges Policy

In my case:

  • Actual shipping cost: 41 cents
  • Handling fee:
    • Actual packaging materials: cost of letter-sized envelope, purchased in bulk.
    • Actual cost of "handling"...??? (I'm guessing a lot less than $7.50)

I believe that the "handling fee" charged was excessive. From my reading of eBay's "Fee Circumvention tutorial", eBay would agree.

So, now what do I do? Do I fight this? Do I forget it? Is it worth notifying eBay? Is it worth getting the seller's hand slapped, possibly costing them loss of status (or worse)?

Violations of this policy may result in a range of actions, including:
  • Listing cancellation
  • Limits on account privileges
  • Account suspension
  • Forfeit of eBay fees on cancelled listings
  • Loss of PowerSeller status

Is notifying eBay worth having the seller come whinging at me again? (He has my telephone number. He already left two whiny voice messages in response to my complaints.)

What is this experience worth to me?

eBay - Watch out for "Handling" fees ( in category Noteworthy ) - posted at Sat, 20 Oct, 11:14 Pacific | «e»

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