Do sellers get hit the 3% PayPal fee if you cancel the sale ?
JimTyler
Posts: 3,454 ✭✭✭✭✭
Some nimrod buys your coin on a buy it now you would have never sold to if you had a chance to vet first ( review feedback, feedback count, purchase history, etc.). His payment goes straight to PayPal with fee deducted ( nothing new). So you cancel because you smell a fish. Do they keep the fee in this example ?
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If you refund a payment for goods or services, there are no fees to issue the refund, but the fees you originally paid as the seller are not returned to you.
https://www.paypal.com/us/smarthelp/article/is-there-a-fee-for-issuing-a-refund-when-using-paypal-payments-advanced-faq3108
As I understand it, you are SOL.
But Ebay and Paypal are the bestest in the world!!!!!!!!!!!!
So this seller had to eat the PayPal fee because of an obvious human error then relisted sold again with the corrected title. How long is this going to last ?
https://www.ebay.com/itm/2019-S-NGC-PF70-Enhanced-Reverse-Early-Releases-Proof-Silver-Eagle-certified-COA-/312935002489?hash=item48dc613179:g:OjMAAOSwBeBeFeKC&nma=true&si=SmOKeSrp6JH0uhzu1NploaFQ8Hk%3D&orig_cvip=true&nordt=true&rt=nc&_trksid=p2047675.l2557
It’s bad. I got a return the other day because the buyer was dumb and I ate the fee and shipping. I blocked him and moved on
How many blocked buyers come back again?
Maybe as Ebay sellers, it is us that are the dumb ones.
I just cleared $20 on a $800 sale.
If it gets returned I lose $20, if it gets lost I lose $800.
Raise your prices 3% and insure your shipments. Problem solved.
Or raise it 100% and retire to Vegas. Problems can be easily solved by simpletons.
Ok- so you'd prefer to whine. So noted.
Again, you need to decouple ebay fron paypal. The transaction processing has a fee, whether Paypal or not. If you reverse the transaction, the payment processor keeps the fee. Some cards actually charge a second fee to reverse the payment.
Through a quick google search, I found that sellers on an Amazon message board have found this to be true.
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I've heard they're "...gonna live forever. Baby, remember their name..."
"To Be Esteemed Be Useful" - 1792 Birch Cent --- "I personally think we developed language because of our deep need to complain." - Lily Tomlin
That sounds nice but it doesn’t work. Once you raise it (even 3%), everyone passes by the listing as they consider it overpriced. Some will even complain that the seller is price gouging. Often that 3% is the entire margin and the only thing keeping your listing being cheaper than the others.
Fair enough, but the Ebay/paypal complaint threads are coming in large numbers now. Seems I have a lot of company as the goliaths melt like a wet MGM witch.
Everybody pays these fees. There will always be some sellers who are willing to settle for a smaller profit than others. Or perhaps those sellers are just better at buying their inventory. Who knows? Regardless- whether it's charging fees or something else entirely, everybody involved- eBay, PayPal, buyers, sellers, USPS, etc.- is going to try to get the best deal they can for themselves. Nothing is going to change this.
I can change it for me, don't play.
Sure everybody pays those fees, but it’s another step in clearing the field for the bigger sellers. Those with a large volume of sales can keep building each of the fee increases in while the others are priced out of selling on eBay. It’s a little here and a little there but soon people will be wondering why there is so little available on eBay. It’s actually already happening with all the threads and posts about how few auctions or good deals there are on eBay. Each small increase just decreases the seller pool and moves us closer to a time when only a handful of sellers will represent the majority of all eBay coin listings.
This doesn't make sense to me. The fees are incremental. Larger volume should just mean more returns and the same percentage of costs. None of the eBay/PayPal/postal fees are fixed costs, other than the nominal cost of having an eBay store.
The only people it favors is people who have a smaller rate of return.
You don't need to raise your rates 3% unless you have a 100% return rate. If you get stuck with one cancellation per 100 sales (which is a LOT, by the way), that's an increased cost of 0.03% per sale.
The mistake amateurs keep making is assuming that every transaction needs to be viewed in isolation. I make sales that lose money all the time. I just have more sales that make money. Given the margins on coins, almost any return results in a sale that is not profitable. But you need to consider that cost as distributed over all sales, not seated on a single sale.
[Exception noted for the unlucky person who made one sale and had one cancellation/return.]
eBay is the way it is because eBay thinks that's what buyers want. More streamlined and consistent policies on all the different stuff for sale over the entire website? Corporate does that sort of thing well. Lots of small sellers, each with their own ideas about running a business? Not so much. Those variables are what buyers complain about, and eBay toils to eliminate. If you (in general, not directed at anybody in particular) want smaller, often infrequent sellers who offer good deals, you're not going to get The Disney Experience when you buy from them. Be careful what you wish for.
What is being missed or ignored or neglected is that the cost of transacting rare coins online has increased significantly. Coins will always move, but to a lesser degree, at least among the non giant Apmex dealers that get a sweetheart low final value fee from Ebay.
If one is keystoning their inventory successfully on the site, the occasional return cost is no more than a nuisance. On a $5000 coin with maybe a loss if you have been holding it for a while, you will get whacked for $200 if the buyer is dissatisfied.
Eventually most of the sellers walk away. The ones that remain attempt to use Ebay to steer business to their website. Not a bad move, but that does not do much to assure Ebay's future.
Ah... A fresh new topic for 2020!
Smitten with DBLCs.
If eBay depended on coin sales to survive, maybe. I bet they don't, though. What do you think?
I think that coin category is the canary in the coal mine. Higher dollar, low margin items feel the new fee hits before the guy selling 4 packs of castile soap.
The question is...how many dings can the sellers absorb. We can argue whether taxation on many Ebay purchases is fair or not, but it will cause sellers to lower prices or endure reduced sales. Add a paypal fee on the sales tax and it is another small chip in the wall.
You don't need to lose 100% of your volume to go broke or 50% or 25%. 15% can take you down.
I think we are at 31 months now.
It makes sense as this isn’t based on percentages but based on total costs. Even if bigger sellers and small ones have the same rate of returns, the bigger ones are able to absorb it based on volume. Two to three returns total for a small seller can be enough of a loss to stop selling on eBay.
If a small seller has 100 sales at a profit of $20 per sale, they make $2,000 in a year. Three returns that cost the seller $50 each (shipping, fees not refunded, supplies) cuts the profit down to $1,850. At $2k it was already a shaky proposition to sell. After the three returns, the seller could easily decide it is just not worth it anymore.
A bigger seller has 100000 sales and a profit of $20. They make $2,000,000. A 3% return rate at a $50 cost per return cuts the profit down to $1,850,000. The big seller has high costs too, but their total profit still justifies selling.
Now if one is a small seller and the rate of return happens to be slightly higher than average or one to two bigger items get lost (and the full price is a loss), then the math is even less favorable.
I was talking to a paypal rep. a few days ago about this topic. He said, yes, on returns paypal keeps the fees, but for canceled transactions they credit the fees back, except on ebay. That's because ebay treats canceled sales (i.e. nothing sent, nothing returned) as returns.
Would it cost ebay anything to change this policy? It definitely costs sellers, and unnecessarily IMO.
What percentage of eBay sales are coins, though? Certainly not 50% or 25%, and I doubt it's even 15%. I would think it's more like 1%-2%. And I don't think there's the tiniest risk that all coin sellers will voluntarily leave.
I'm sorry, but that is nonsensical. A buyer only does 2000 per year and 1850 makes it less worthwhile.
1st of all, your return cost of $50 means that each sale is $1500. So, your hypothetical example has a $2k profit on $150k in sales. If your business has a 1.4% profit margin, it is already on life support.
Second of all, my return rate is 0.5% not 3%
Finally would you quit your your job over a 6% pay cut.
If you redo the numbers with a more logical 10% gross margin, 150,000 in sales yields 15,000 in profit so 150 in returns is 1% of your profit.
Even a 5% margin is $7500 gross profit and $150 for returns represents a 2% cut in pay.
Would you quit your job over 2%?
You also failed to consider that selling 2 coins ona 5% margin yields $150 in profit. So all you need is sell 102 coins instead of 100.
It’s perfectly sensical as many of the small sellers aren’t doing this as their main job. It’s a way to flip a few coins in order to offset the ones they buy. There are plenty of sellers that used to auction their duplicates or former collections. As long as they weren’t taking a complete bath, it was worthwhile to do so on eBay. And with enough people doing that, there was a healthy supply of auctions and fairly priced buy it nows. With each of these fee increases and policy changes, there is less incentive to auction on eBay and the buy it now prices have to go up to account for the fees. All of this leads to less sales from sellers and an overall reduction in what one can find on eBay.
Also, the $50 was a sample number for the total cost of the return. It might be a bit high but it’s possible even with a $500 sale based on the total cost (PayPal fees not refunded+supplies+shipping costs both ways+insurance when initially shipping). Some of the lower dollar returns would be lower losses, but a return on one of your higher dollar items (say a gold coin or a nice toner) could be even more.
You are assuming that sellers of items in the other 900 categories are not kvetching on other forums over the same concerns.
On a $1000 rare coin, the two way shipping hit is $20 or so. What about the guy selling shoes that gets hosed for $20 on two way shipping because the buyer didn't like the color of the tassells.
Ebay can come up with any sales prevention scheme that they want. Sellers though will find a way to mitigate the damage or simply leave.
Seems that the outcome of the Paypal no refund rule is that so many buyers will be blocked that they will drop off the site.
None of it is good for the venue.
If you're casually selling extras, losing a few percent on a sale to added fees won't hurt as much as if you're depending on your eBay sales to put food on the table.
Just sayin'.
Quick google search...
What is a typical markup for retail?
Even though there is no hard and fast rule for pricing merchandise, most retailers use a 50 percent markup, known in the trade as keystone. What this means, in plain language, is doubling your cost to establish the retail price.
What percentage of coin sales do you suppose involve that sort of markup?
Only parking lot finds
All the more reason why you aren't going to quit over $1850 vs. $2000.
But, again, your numbers represent a very unsuccessful business in the first place. A $500 sale (using your number) has $15 in fees. Insured shipping is another $10. Bubble envelope or box, 50 cents. Total cost $25. So, using your new numbers:
100 $500 sales represent $50,000 in gross sales. $2k profit represents a 4% margin. A [ridiculous] 3% return rate means $75 in return costs for a net $1925 which is suddenly not worth doing? And still, 3 extra sales at a 4% margin represents $60 in additional profit. So, again, sell 103 instead of 100 items.
If that makes it not worth your time, so be it.
And, again, if a 3.7% decrease in sales makes it not worth doing, it's probably not worth doing for the big company either. That's more salaries, more effort, etc.
It's not even "a few percent". Again, even using his HUGE 3% return rate. The total additional cost to EACH item is 0.09%. It's not even one-tenth of one-percent. If one-tenth of one-percent makes it not worth doing, it's already not worth doing.
It's like someone (I think it was you) said earlier about focusing on the 1 transaction where there's an issue and overlooking the 100 that went just fine. No doubt, I would prefer to not have to pay the transaction fee on a return. On the plus side, I only get a couple of returns a year on a thousand (more or less) sales.
Yes, I had 5 returns last year on 3000 transactions. The return rate is much lower than his fictitious 3%.
The other fun math fact is that he also assumed a profit margin so low that the 3% PayPal fee had an undue impact on the bottom line.
Here's some fun math.
Assume I sell 100 items with a 3% return rate. Each item sells for $1000 and each return costs me $40 (shipping + PayPal). Also, assume my profit margin on each item is only 0.1%
So, my $100,000 in sales yields $100 in profit. Now, 3 returns ant $40 each and I'm losing money!!!!!! LOL
Assume a more normal 10% margin and your $100,000 in sales yields $10,000 in profit and your $120 in returns is insignficant.
You can get all kinds of fun results if you are allowed to just make up the numbers.
You're not paying attention to the fact that many small coin sellers aren't running a typical business. They are selling off extras, moving on from items they no longer like in their collection, and occasionally flipping. They play by the rules and continue to sell on eBay until it is no longer feasible. A few returns and it is no longer worth it.
The threads and posts are easy to find on this forum and others. More and more people are noticing less auctions and less fairly priced buy- it-nows. More people are abandoning eBay as a venue for coins. Sure eBay will be around for a long time, but each policy and additional fee increase will siphon off more sellers. Eventually the coin category will mainly be filled with several handfuls of big sellers with fixed price listings (Apmex, Liberty Coins, Pinehurst, MCM, etc) and the occasional person disposing their collection (or that of a relative).
Where are they going?
I'm not ignoring it. Those people are especially not going to quit over $50 in fees. If you are just cleaning out your collection, profit is not really a concern at all.
Well, if they have all $1000 coins, they can go anywhere. If they have $50 raw coins, they can go nowhere.
But it appears the target is shifting.
For some coins, eBay is not the place. You want to sell bullion, you better go to a coin shop. You want to sell $10,000 coins, you can go anywhere [including eBay]. You want to sell $10 to $100 coins, eBay is THE PLACE.
This discussion always gets derailed by two fallacies:
1. Coins are a barometer for eBay's core business.
2. eBay costs are excessive relative to other venues.
Very few in PCGS plastic...at least above $50. Consider all the Saints and Morgans and silver Eagles. Not a lot of room on those.
A quick story from over 40 years ago which will shed some light on the illusion of markups.
My best friend's family owned an independent catalog store outside of Detroit. I was a floor manager. Markups ranged from triple keystone on costume jewelry to 2% on Sony TVs. Fine jewelry was in the 33% range.
One day a kind of putzy friend of the family walks in. The old man (yup we had one) walks out to kibbitz with the guy.
After a few minutes, the guy says he wants a Mr Coffee. We had them on the shelf for $29.99. Doc Benjamin, the owner gets one from stock and says to Chuck "give me $30." Chuck responds that he wants it for his wholesale cost.
Doc says sure. He goes in back and returns with the invoice from North American Philips. Cost was $32.50 each. Tells Chuck that was his cost and he sheepishly paid it.
We learned the lesson of the loss leader. The old man explained that J.L.Hudson, the major department store chain in town set the price on consumer electronics and they sold the Mr Coffee for $30. He could have sold them at $35 for a small profit or not carry them at all, but it was a popular item and he used it get people in the door.
Customers don't care what you pay for an item, they care what you sell it for.