Why eBay Is Charging Final Value Fees on Shipping and Handling

Thursday, 7 April 2011 at 5:52 am Pacific USA Time.

I don’t have inside info on this. But I have an opinion, and many of you are asking about it. eBay recently announced that it would soon charge sellers the final value fee (aka FVF aka eBay’s commission on your sale) on not just the sale price, but also what you’re charging for shipping and handling. Why would eBay do this? Here is my best theory…

It’s about the shopping cart they’re working on. People will be able to buy from multiple people, and then have ONE checkout from one shopping cart.

If I put 3 things in a cart, some of those sellers might charge for shipping, some might have free shipping. That may be confusing to the shopper… Amazon doesn’t do that. J Crew doesn’t do that. Why am I being charged for shipping? Then, you have another potential issue. Someone has read a listing where it very clearly said FREE SHIPPING. They now assume FREE SHIPPING, and when they drop someone else’s item in the cart, and it’s NOT free shipping, they may get confused and feel lied to. Hey, that said free shipping, why am I paying for shipping?

I think eBay figured, “Aw crap, we tried getting sellers to lower shipping. We tried getting them to make it free. We gave them preferred placement in search results if they made it free, and some still didn’t make it free. Well, now we’ll really push them by saying hey, you’ll pay fees on it either way, so make it free.” The real message is: make it free so that the shopping cart is easier for shoppers.

eBay clearly is NOT taking into consideration the other problems like now you have to deal with sales tax on a higher number. Additionally, if someone makes a return, they expect 100% of their money back rather than JUST the purchase price. So we are working with our clients on rewording return policies to indicate a “restocking fee” since you can’t say you’re keeping money for shipping. Shipping was FREE!

So sellers, reword your return policy so that people understand that if they return it, they will not get 100% of their purchase price back, unless you are OK doing that and eating the shipping.

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Categories: eBay

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5 Responses to “Why eBay Is Charging Final Value Fees on Shipping and Handling”

  1. Your theory has merit Debbie, but the eBay thought process is clearly flawed. The first thing that they should realize is that they have made it very advantageous to offer free shipping, as you stated. Yet 70% of sellers have still not converted. There’s GOT to be a reason for that. The reason is the same reason as to why many of their strategies are flawed and meet with opposition from some sellers.


    eBay need to get out of that mode, and start to realize that somebody selling a 40 pound air conditioner should NOT be subject to the same shipping rules and practices as somebody selling 2 ounces of stamps.

  2. Miriam says:

    Thanks for the “restocking fee” idea. I tried free shipping on a few items. One of these items was returned. I had to refund the entire amount. I was out $12 since it costs a lot to ship large women’s shoes to the East Coast. I was not happy, and I vowed never to offer free shipping on heavy items again. Maybe I will take your advice.

    Miriam @ The eBay Life Blog

  3. Gary Overton says:

    I have never understood why sellers want a shopping cart on eBay. It is going to cause a lot of problems like this one. Most eBay buyers are confused anyway. A shopping cart is only going to make it worse

  4. Craig Clark says:

    I was thinking something similar. But offering free shipping when you sell some items can be problematic. For example, right now I am selling a dinner plate for $14.99 plus $9.95 shipping. Then if someone buys more than one, I just send a corrected invoice with lower shipping. If I include the shipping in the purchase, the seller is going to pay much higher total costs, because each plate is $24.94.

  5. Veronica says:

    I am brand new seller so my estimates might be off a bit. But here is what I am seeing here. So if I am selling a heavy 5 pound lead crystal item at a buy it now price of $39.95 and add free shipping (my cost approx. $14.00) plus insurance (let’s say $2.00) my gross profit left after shipping and insurance is $23.95. Then we add all the ebay fees. So now, to prevent a major loss on a return, I should state in my listing that the restocking fee, if they return this item, is going to be (maybe) $16-$17. Who is going to buy that unless they are absolutely sure they are not going to want to return the item? Seems like we all need to start blasting ebay with these situations to make them come to their senses?