Author Topic: eBay to start charging Final Value Fees on postage (Australia) - PETITION  (Read 3036 times)

*CountessA*

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I'd like to draw everyone's attention to the petition here:

Link to petition on Change.org about Final Value Fees on postage for Australian sellers

This announced change by eBay will hit certain sellers much harder than others. For sellers who sell small-value items that are too large to fit into a "Large Letter", for example, this may make it impossible for them to continue. For sellers whose items include things that are quite heavy, just consider for a moment how impossible the situation will be for them to cope with trying to work out how to survive such a fee when their postage cost could vary from around $8 (local) to over $170 to Zone NT2. (And that's not even as BAD as it could get... The postage price to Zones W3 and W4 are even higher.)

eBay suggests that sellers simply add on the price of postage (plus of course the additional fee charged by eBay) to the price of the item.

In the case of the first sort of seller I've mentioned above, consider their postage cost. For an item whose weight is over 250g but under 500g, which can fit into a Large Letter (and can be sent in this way with adequate and suitable protection), postage cost is $3.50 - $3.40 for those with an Australia post business charge account. Let us proceed with postage cost of $3.40, plus 60 cents to cover such things as bubble wrap, tape, etc. This amount won't cover a seller's time in packaging, so let's assume the seller in our example has minimal need to protect the item. This gives us $4.00 postage cost.

Final value fee of 9.9% on the postage cost of $4.00 is 39.6 cents. So the postage cost then becomes (for practical purposes) $4.40... and on low-priced items that 40 cents may not be able to be absorbed by the seller. The sellers thus needs to increase his postage charge to cover this fee - and every time the postage charge is increased, eBay's percentage becomes higher.

                     Let x = postage cost excluding eBay's fee; eBay's fee on the postage is represented by x/9.9. Since x -x/9.9 must equal 4, x = 49/9, which is 4.44943 (let's round that up to 4.45)...

... and thus the seller will need to increase his postage charge to $4.45 to cover the 45 cent additional fee.

This extra 45 cents may well represent a postage component that the buyer of a low-price item is not willing to pay. It's particularly something to bear in mind if the seller has previously, for example, kept the price just UNDER $4.00 for postage... at $3.95. There is no doubt at all that $3.95 looks a great deal cheaper than $4.45; it is a well-known marketing fact. The seller will be forced to charge more than the buyer wants to pay.

Or perhaps - instead of putting this additional cost onto the postage price - it should be placed onto the cost of the item itself. You can see how this will immediately cut into the seller's slender margin to an unsustainable amount.

Oh - and of course this means that sellers can no longer give discounts for combined postage; not with FVF being charged on each postage amount and with eBay's attempting to make sellers offer free postage.



In the case of the second sort of seller I've mentioned above, consider a sewing machine which weighs 12kg. It's not a small item in size, either (it would be around 30 x 60 x 40 cm as a conservative guess). Postage from VIC to WA (not the most remote WA, either - just W2) is $99.75 (calculating on today's AP rates). Compare this to the local cost - $9.75.

(This is a MODEST example - by no means the most extreme possibility, and as such they don't represent the worst of the cost issues.)

How can the seller incorporate that into his item price? Should he calculate for the worst case scenario? Should he strike a middle ground and be prepared to subsidise the postage cost heavily if the buyer happens to be in remote WA???

Here are his choices for a sewing machine listed at - let's say - $100. He'd have been paying 9.9% of this price (that is, $9.90) before the FVF included postage. Now, let's say he follows eBay's suggestion to add the postage cost onto the item. Well - what will be item be now? $109.75? $199.75? Or more than that? Or less than that? How can he justify DOUBLING THE PRICE of the sewing machine (with free shipping)? (And will any buyer in the same state, or whose postal zone gives a postage price of, say, $40 or $50, even consider buying from him?) That is not even taking into account that the fee charged by eBay would double.

Can he cater for the wildly different postage prices by leaving postage as a separate charge on his listing, then?

Well, the fee charged on his postage will vary from 97 cents to $10.86.

Let me put that into context. His postage fee could be 97 cents or as much as 11.19 times MORE than that.

That is over 1000 percent difference in FVF for the postage component.

His total FVF would then be anything from $10.87 ... or as much as $20.76.

Is it reasonable for a seller to be put into this ridiculous situation? He would be accused of postage piracy if he slaps on an extra $20 or so to the postage when a local buyer purchases it. He could add the $20 to the starting price of the item, but that is a one-fifth increase in price!

If he does what eBay is trying to "educate" sellers to do, and include free postage on the sewing machine, we can now see he'd have to change the price to $199.75 plus $20.75 just to make sure he's NOT subsidising the buyer's postage costs.

This is clearly, clearly, clearly ridiculous.


Let's not forget, too, that eBay have specifically said they will PENALISE sellers who don't offer free shipping. Hamish Moline (eBay's B2C marketplace senior director) says that eBay will set its algorithms to demote items that have an additional cost for postage.  “You’re at risk of being ranked more lowly,” Mr Moline admitted.
 
                  - Source: The Daily Telegraph


This means that sellers whose business model CANNOT possibly work with the free postage "suggestion" are going to be punished by being so far down the ranks that they might as well be invisible.

They will be PAYING MORE THAN BEFORE for a service that will be SIGNIFICANTLY LESS THAN THEY PREVIOUSLY RECEIVED.

Their fees will increase - in some cases, dramatically (as in, by 100%) - and their listings will be low-ranked (as in, hidden).


As a buyer, I am outraged by this. My favourite sorts of purchases have already been affected during the last few years - with more and more of the sorts of sellers from whom I buy being driven away from eBay due to increased costs and risks.



My apologies: I know this is a ... ahem ... a bit of a scroller. However, it could be worth reading so that you realize to what extent this will affect a significant number of sellers.

I urge you to contact the ACCC and make a complaint NOW. The link is http://www.accc.gov.au/consumers/complaints-problems/write-a-complaint-letter.

For those who need help in drafting a complaint letter in respect of this, feel free to ask me for assistance.

The petition will probably do little good, if any - at least, in respect of getting eBay to change its mind. eBay are a business; they are in the business of making money. One does not blame a business for wishing to make money - but of course eBay is scarcely doing poorly. Even so, they are extremely unlikely to "change their minds" because of very angry eBay members. If you recall, the PayPal-only requirement which eBay attempted to impose was thwarted - not by angry protest, not by petitions, not by letters to eBay, not by upset posts by eBayers - but by the power of the ACCC. (If you recall, the ACCC revoked eBay's immunity in respect of Australian law when eBay lodged a notification in respect of its intent. eBay finally backed down after the final decision by the ACCC was a foregone conclusion: not one moment earlier.) We do not - as individuals, or collectively - have the power to sway eBay. But what we can do - and what we MUST do - is give the ACCC the fuel to proceed with an investigation. The ACCC will act on complaints received - and the more complaints received, the more they will have to power their investigation. Sheer weight of numbers, backed up by evidence and by complaints that illustrate that the proposed change is unfair or wrong in respect of Australian consumer law, will be the iron fist in the iron glove.

That's why I consider the petition almost in the light of a tactical diversion, or a signpost to other angry eBayers who will have received that notification recently to their great dismay. Most Australian eBayers may not be aware that there is anything to do - other than to "suck it up" or walk away in despair. They need to be made aware. The more eBay users there are who will submit a complaint to the ACCC, the higher the chance that something will be done. I would therefore urge people to sign the petition, and to post about the petition on Facebook, Twitter and other social media.

Complaints on eBay's Facebook page, complaints on your Facebook complaints - all well and good. Do that - but do that as a tool of raising awareness of the situation and awareness of what to do in an attempt, at least, to have this stopped (if this is unlawful and can be stopped).

The ACTION needed is a complaint to ACCC. You can also complain to the NSW Department of Fair Trading (since eBay's office is in NSW) and perhaps even your own state's department of Fair Trading or the equivalent.

MOST IMPORTANT: http://www.accc.gov.au/consumers/complaints-problems/write-a-complaint-letter


ALSO MAY BE IMPORTANT:
In Victoria: http://www.consumer.vic.gov.au/contact-us/make-a-complaint
In NSW: http://www.fairtrading.nsw.gov.au/ftw/About_us/Online_services/Lodge_a_complaint.page
In SA: http://www.cbs.sa.gov.au/wcm/consumers/consumer-advice/making-a-complaint/lodging-a-complaint/
In WA: http://www.commerce.wa.gov.au/consumerprotection/Content/Consumers/Complaints/Making_a_complaint.html
In NT: http://www.consumeraffairs.nt.gov.au/ForConsumers/Complaint%20Form/Pages/default.aspx
In QLD: http://www.fairtrading.qld.gov.au/complaint-general.htm
In ACT: (can't find the actual complaint form, but here's the contact information): http://www.ors.act.gov.au/page/view/1544/title/contact-us
In TAS: http://www.consumer.tas.gov.au/html_forms/enquiry_form

"No man is an Iland, intire of it selfe; every man is ...a part of the maine; ...any mans death diminishes me, because I am involved in Mankinde"

*smee*

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Rebellion!

pra666

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Yes sign the petition

But lower your fees by not offering paypal.


You don't have to accept paypal as a payment; you need only one of paypal, paymate or merchant credit card.

*CountessA*

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Praa, as I understand it, Paymate's fees are slightly higher than Paypal's - so using Paymate would give more of a moral satisfaction rather than helping by reducing sellers' costs.

I've thought for years that business sellers on eBay should be accepting payment through their credit card facilities. For businesses who already have a business account and payment gateway for over-the-phone or online payments, it seems madness to have a SECOND payment gateway taking a cut of the payments. One pays the business account and gateway fees anyway... and they are (well, mine certainly) not as high as Paypal fees.

But for people who don't sell as a business but are selling things around the house or as a hobby (well under the GST threshold, etc), there's certainly no way for them to be eligible for a business account from the bank!

So they are stuck with either Paypal or Paymate as "safe" payment methods.

And none of this will help them when it comes to the FVF being applied to postage.

It's a horrible situation for certain types of sellers - and it's going to impact on buyers; that's my genuine perspective on it.

"No man is an Iland, intire of it selfe; every man is ...a part of the maine; ...any mans death diminishes me, because I am involved in Mankinde"

pra666

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I've noticed people are more likely to pay by bank deposit than by paymate. If you allow for the lack of GST input credits via paypal, paymate and paypal fees are identical.
I am less affected by this change than most as postage cost is relatively low compared to item cost for the collectables such as coins, banknotes, badges, stamps that I sell. (My average sale price over the last 10 years or so is about $60; postage plus padded bag plus registered is now $6.10).

*Brum6y*

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Ebay has made the situation intolerable by their blind push for 'Free Shipping' across the board - and this latest addition to their money grabbing portfolio is simply adding insult to injury.

For products that are usually just a single item purchase, getting the shipping cost right for various destinations is the only real challenge.  If eBay's postage calculator is accurate, then it can take care of the variety of destinations to cover postage ... but that doesn't allow for this extra surcharge, so the seller will have the impossible task of covering it for the variety of situations Countessa as outlined.

However, using the postage calculator is still not what eBay want.

While the fundamental of the tag 'Free Shipping' is understood as a marketing ploy, it is, in fact, a complete fabrication.  (I have often heard of Sellers who are still looking for a post office that will send their stuff for free.)  More accurate would be the phrase 'Shipping Included'.

Thus, stating 'Free Shipping' actually means adding the shipping cost into the item price.  Since this cannot be made variable, the only way a Seller can even attempt to safely offer this is for postal services where distance is irrelevant, which means they are limited to an article no heavier than 500g (be it letter or parcel) - which may cover a great percentage of products on offer, but there is still a huge range of items that are outside this.


Nevertheless, I feel there is a greater evil in the 'Free Shipping' mantra - and that relates to multiple purchases and combined invoices.  As I understand it, when issuing a 'combined invoice', a Seller can adjust the invoice (downwards) by an amount up to the shipping costs.  You cannot discount the item prices.  When the items are already tagged 'Free Shipping', this value is zero, so no adjustment is possible.  As a result, the Buyer will be forced to pay for the 'included shipping' on each and every item.  This is really a difficult situation - as the buyer will (more than likely) have a reasonable idea of how much the postage should be - and they will be put into a bad mood (just the thing you want pre-DSR).

Even more challenging is when the buyer is well aware of the postage and demands a discount for their multiple 'Free Shipping' purchases because, quite simply, the Seller cannot change the invoice to accommodate such a request.  The only way out that I can see - when paying via PayPal - is for the Buyer to pay in full and the Seller to then do a partial refund ... and that's not exactly professional.  At least with other forms of payment, the Seller can instruct the buyer to pay a specified amount and then simply mark the eBay invoice as 'Paid'.  Some of the problems with this are: that the invoice now does not reflect the truth of the transaction, where some process is required to address the reconciliation headache, as well as fees being charged by eBay on an incorrect, inflated amount.


I have mused upon this aberration and have developed a declaration that would not only be eye-catching, but would also be defendable in court:

CHEAPER THAN
FREE SHIPPING!!
**
** For multiple purchases in comparable postal tables when shipped together


But I daresay eBay wouldn't be too happy if it started turning up on listings.....

*Brum6y*

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Giving the ACCC some ammunition is, IMHO, to be highly encouraged.