Ebay's new insurance policy
hammered
Posts: 2,671 ✭✭✭
Not sure if it's been discussed at length, but I'm a little concerned about how to handle Ebay's new policy on insurance (effective 9/22).
First, I am unsure why Ebay is doing this - insurance should be optional for the buyer, but now they are making the seller eat the insurance charges.
Many of my buyers select insurance (maybe 25%), some for higher dollar items, others for low dollar items. It's up to them. Optional has worked well for me so far.
So I am wondering how to handle it. Do I increase my basic shipping charge, to cover those buyers who might want insurance? Can I list a shipping charge in the listing, but raise it on the invoice if the buyer says they want coverage?
I cannot afford to add insurance on every item for free. I already pay a lot of $ in ebay and paypal fees.
BTW, I use the auction format almost exclusively so folding this into my BIN is not realistic. How does one do this and maintain the traditional auction format?
Any suggestions?
First, I am unsure why Ebay is doing this - insurance should be optional for the buyer, but now they are making the seller eat the insurance charges.
Many of my buyers select insurance (maybe 25%), some for higher dollar items, others for low dollar items. It's up to them. Optional has worked well for me so far.
So I am wondering how to handle it. Do I increase my basic shipping charge, to cover those buyers who might want insurance? Can I list a shipping charge in the listing, but raise it on the invoice if the buyer says they want coverage?
I cannot afford to add insurance on every item for free. I already pay a lot of $ in ebay and paypal fees.
BTW, I use the auction format almost exclusively so folding this into my BIN is not realistic. How does one do this and maintain the traditional auction format?
Any suggestions?
0
Comments
I cannot afford to add insurance on every item for free. I already pay a lot of $ in ebay and paypal fees.
BTW, I use the auction format almost exclusively so folding this into my BIN is not realistic. How does one do this and maintain the traditional auction format?
Any suggestions? ..."
//////////////////////////////////////
A necessary step in sellers accepting the "new rule," is for them
to understand that they have ALWAYS been responsible for the
safe delivery of the items they sell on EBAY and collect for via
PayPal.
That FACT will not change after the "new rule" is in effect.
.........
In ALL but the most narrow circumstance, insurance is for the
benefit of the seller, NOT the buyer.
...........
Using BINs with free-shipping, the insurance fee is simply added into
the price of the item.
Using auctions, there is no practical way to "add" the insurance fee
to the price.
ANY attempt to invoice extra for insurance will bring a warning/vacation
first, and then a NARU.
..............................
ecrater.com works well, IF enough adwords are purchased.
Sellers can charge whatever they want, get paid
however they want, and charge extra for insurance.
There probably will be buyers who insist on insurance for low dollar stuff even if you explain that you're responsible. In those cases, just ask them to pay for it and that it isn't cost effective for you to pay for insurance on every item.
Many sellers/buyers on ebay over-insure; I haven't had to file an insurance in claim in a few years. I could have lost several $100 items during that time span and I'd still be ahead by not paying to insure every item in that price range.
Just because sellers are responsible, doesn't mean you have to flush money into the USPS system.
<< <i>I believe you can add it into the shipping and handling charge (i.e. it's a handling charge). You just can't charge the buyer separately for it anymore >>
/////////////////////////////////
It is not an acceptable element of "handling," if stated as an ala carte fee.
It must be inclusive to the S+H charge. Sellers can simply state a gross total
fee.
I don't really see any problem with the new rule........EXCEPT that BestMatch
search-returns will disadvantage higher S+H fees.
The correct model is:
$x Shipping and Handling.
(On the SYIF, check "insurance included.")
///////////////////////////////////
BINs are the future of EBAY.
Count on it.
So I can't really raise my p/h to cover the additional costs.
At some level ebay needs to understand the sellers pay the bills, and quit nickel and diming us.
///////////////////////
Stating that you charge an extra fee for INS - even at a buyer's request - is a violation
of the new scheme. IF that buyer reports the solictation of extra money, the seller will
have a problem.
ANY such request for extra money in an email, an invoice, or a listing is a violation.
As most know, ebay raised final value fee's about a year ago, and when they did that they also rolled out a tiered power seller discount plan based on maintaining strong DSR ratings.
By eliminating the insurance option, it almost forces sellers to eat the cost of that or raise their shipping to cover it.
Raising shipping and passing it along to buyers will result in lower DSR ratings for sellers and less money ebay will have to pay out to the sellers.
It's a good way to eliminate sellers on ebay, and/or make buyers pay more for their items. Nobody wins but ebay.
<< <i>One of the issues to me is that now that I am required to cover the insurance, buyers can still ding me on DSR's.
So I can't really raise my p/h to cover the additional costs.
At some level ebay needs to understand the sellers pay the bills, and quit nickel and diming us. >>
//////////////////////////////////
Auction sellers are hurt a little by the change.
BIN sellers should be fine.
The world's largest Outlet Mall is not much interested
in offering auctions.
...............................
Another option is to simply self-insure most items.
Each time something sells, drop a dollar - or a quarter - into
a jar. You should have lots of money left at the end of each
year.
..........
DC is really the only INS that most items require.
///////////////////////////////////
That is always pretty true.
.......
The push is - and has been for 3-years+ - toward "free" shipping.
The model works GREAT on BINs, and DSRs are adequate.
Once everybody is forced into the "free" shipping scheme, the
DSRs in the S+H category will be off the menu.
<< <i>"...There probably will be buyers who insist on insurance for low dollar stuff even if you explain that you're responsible. In those cases, just ask them to pay for it and that it isn't cost effective for you to pay for insurance on every item...."
///////////////////////
Stating that you charge an extra fee for INS - even at a buyer's request - is a violation
of the new scheme. IF that buyer reports the solictation of extra money, the seller will
have a problem.
ANY such request for extra money in an email, an invoice, or a listing is a violation. >>
It's all in how it's done. If a seller explains that he's responsible for the item and that the item is "self insured," but the buyer insists on paying for usps insurance for some weirdo reason (and there will be buyers like that), I guarantee you the seller will not be punished if for some reason the buyer then forwards the emails to ebay. Any intelligent person would view that as a buyer entrapping a seller and just trying to cause trouble. The point of this rule isn't to force sellers in to buying usps insurance for every item - it's to let buyers know the sellers are responsible for safe delivery.
//////////////////////////
FINALLY, somebody brave enough to "guarantee" an action
that EBAY will or will not take.
As for an "intelligent person" making a decision at EBAY, I
can only suggest that folks visit the campus to determine
the "intelligence" of the workforce.
MANY of the "decision makers" could not stock shelves or
run the register at a 7-11. They have some spoken word
skills, a smathering of written communication skills, and
they follow a manual written by folks equal to themselves.
......................................
MOST buyers already KNOW that sellers are responsible for safe delivery.
The problem IS that MOST sellers continue to think/claim that their responsibility
ends when they hand a sold item to a carrier.
As MOO noted, lots of sellers have been trying to transfer that burden to
buyers for years.
I'll let you know if I have any trouble from ebay by handling this matter in this way, but it won't happen. Hopefully, I'm wrong about buyers insisting on having the option to pay for usps insurance even though the item "is covered," but there are some real oddballs out there. I listed cheap stuff from my collection when I first started selling, and I remember having buyers pay $1.50 to insure cards they bought for a dollar. That's just wrong.
<< <i>
<< <i>I believe you can add it into the shipping and handling charge (i.e. it's a handling charge). You just can't charge the buyer separately for it anymore >>
/////////////////////////////////
It is not an acceptable element of "handling," if stated as an ala carte fee.
It must be inclusive to the S+H charge. Sellers can simply state a gross total
fee.
I don't really see any problem with the new rule........EXCEPT that BestMatch
search-returns will disadvantage higher S+H fees.
The correct model is:
$x Shipping and Handling.
(On the SYIF, check "insurance included.")
///////////////////////////////////
BINs are the future of EBAY.
Count on it. >>
exactly, shipping and handling all inclusive--don't break it out or even mention it. Not a-la-carte.
Question:
Currently I have Insurance mentioned in the text listing of maybe 50-100 of the 800 items I have in my store as a requirement, (although I don't even stick to my own rules and if they pay the invoice before I send it, they get it for free).
I do not have it as a requirement in the Listing under the Shipping breakdown section in any of my listings, just mentioned in the text of, as I said maybe...50-100 listings. Usually items over $25. I don't know which ones.
This is the Big Question!!!!!
Do I have to go through and read all of my listings and make sure I take out any mention of Ins. in them??? Or face having a bunch removed again and another major ding to my compliance !!!!!!
Sounds like another round hours and hours of fun, thanks to another Rule change in the middle of the game!!!
Thanks for the info ahead of time!!!!
Neil
Of course you can choose to purchase insurance on shipments, but not ask buyers to buy insurance separately. In some categories like Antiques, Collectibles, and Jewelry, shipping insurance for sellers is essential. When appropriate, you can include the cost of insurance in your item or shipping price."
I stopped over one year ago - and opened an online store.
no regrets. no fees. no problem.
I see sellers raising their shipping costs on auction items in response to the rule change, but I don't predict that more items will be shipped with insurance.
If a buyer requests ins, then the higher shipping charge will cover it, if they don't request it, especially on low $ items, the seller pockets the difference. Either way, I think the buyer ends up paying more in the end.
In those cases, the sellers often will just use delivery confirmation (which will show up as delivered - so the seller wins with paypal if it's less than $250), and unless the recipient is honest enough to return the package, the buyer is sol. I doubt many sellers offer refunds to buyers when the tracking shows that a package was delivered. The same applies when mail is stolen after delivery.
I'm treating it like the payper payment policy. I don't state that I accept them, but if a buyer requests it then we work it out. If a buyer has special circumstances and they want to pay for insurance for a low to medium dollar item, same thing. 1000 to 1 I'll never spend a day in ebay's naughty corner. On more valuable stuff, I'll pay the insurance myself just as I have been.
<< <i>I see this actually as no-win for the buyer.
I see sellers raising their shipping costs on auction items in response to the rule change, but I don't predict that more items will be shipped with insurance.
If a buyer requests ins, then the higher shipping charge will cover it, if they don't request it, especially on low $ items, the seller pockets the difference. Either way, I think the buyer ends up paying more in the end. >>
First,
PoppaJ Thanks,
That answered my question, yes I am going to have to go in and manually change my listings. And after a little test run with 8 auctions, I found out I am looking at more than the original 50-100, more like 200-300 listings. And it took 15 minutes to do about 10, so have several hours of fun ahead.
Hammered You are right,
As I am doing this editing, I am raising my shipping costs on my Store items that Sell Between $25-$50, not to completely cover the cost but to offset some of it. I will not eat all of the raised shipping costs, can't afford to, already lose on shipping for most listings or barely break even for some. So in that regards you are right. My items above $50 already had most of the Ins. cost built in, and it was required, (The ones that didn't, Will Now), so no need to raise those, just need to fix the listings. It will have one for sure affect, before I didn't have all of my Sales between $25-$50 sent with Ins, only Buyers that paid for it, now All Buyers will have it.
Personally this is a redicalous waste of money to the USPS. But how could you do the Self Insured thing in your listings, when you are not allowed to even mention Insurance???
Neil
Why would you have to mention it? For most buyers, who don't care about usps insurance, it goes without saying that you're responsible. Just set aside money as "insurance" and leave it be. If a buyer insists on usps insurance, they'll let you know and you can proceed however you wish. Most won't.
<< <i>Personally this is a redicalous waste of money to the USPS. But how could you do the Self Insured thing in your listings, when you are not allowed to even mention Insurance???
Why would you have to mention it? For most buyers, who don't care about usps insurance, it goes without saying that you're responsible. Just set aside money as "insurance" and leave it be. If a buyer insists on usps insurance, they'll let you know and you can proceed however you wish. Most won't. >>
Good day,
Maybe it's just me, but with the Insurance Sticker from the USPS and the Delivery Confirmation Sticker from the USPS on the Bubble Wrap envelope, it just keeps people a little more honest. Out of the last 3-4 Thousand sent with those....0 and I mean Zero came up missing!!!
Imagine that!!!
And as a side note, I haven't raise my shipping rates in the last 7-9 times that USPS has, I have absorbed them each and every time, and when the changed the padded envelope stuff, absorbed the Cost increase. Have been charging the same rates since about 1999/2000. So I was way over due and its all due to E-bay's helping out the Poor Buyer!!!
Go Figure!!!
Neil
they are my current reality... I love me some auctions though buying..
<< <i>BINs are the future of EBAY. >>
I hope that's a long ways off
<< <i>"It's all in how it's done. If a seller explains that he's responsible for the item and that the item is "self insured," but the buyer insists on paying for usps insurance for some weirdo reason (and there will be buyers like that), I guarantee you the seller will not be punished if for some reason the buyer then forwards the emails to ebay. Any intelligent person would view that as a buyer entrapping a seller and just trying to cause trouble. The point of this rule isn't to force sellers in to buying usps insurance for every item - it's to let buyers know the sellers are responsible for safe delivery.'
//////////////////////////
FINALLY, somebody brave enough to "guarantee" an action
that EBAY will or will not take.
As for an "intelligent person" making a decision at EBAY, I
can only suggest that folks visit the campus to determine
the "intelligence" of the workforce.
FEEBAY AND PIGPAL SUCK!!!!!!!!!!!!!!!!!!!!!!!!
MANY of the "decision makers" could not stock shelves or
run the register at a 7-11. They have some spoken word
skills, a smathering of written communication skills, and
they follow a manual written by folks equal to themselves.
......................................
MOST buyers already KNOW that sellers are responsible for safe delivery.
The problem IS that MOST sellers continue to think/claim that their responsibility
ends when they hand a sold item to a carrier.
As MOO noted, lots of sellers have been trying to transfer that burden to
buyers for years. >>
<< <i>
<< <i>"It's all in how it's done. If a seller explains that he's responsible for the item and that the item is "self insured," but the buyer insists on paying for usps insurance for some weirdo reason (and there will be buyers like that), I guarantee you the seller will not be punished if for some reason the buyer then forwards the emails to ebay. Any intelligent person would view that as a buyer entrapping a seller and just trying to cause trouble. The point of this rule isn't to force sellers in to buying usps insurance for every item - it's to let buyers know the sellers are responsible for safe delivery.'
//////////////////////////
FINALLY, somebody brave enough to "guarantee" an action
that EBAY will or will not take.
As for an "intelligent person" making a decision at EBAY, I
can only suggest that folks visit the campus to determine
the "intelligence" of the workforce.
FEEBAY AND PIGPAL SUCK!!!!!!!!!!!!!!!!!!!!!!!!
MANY of the "decision makers" could not stock shelves or
run the register at a 7-11. They have some spoken word
skills, a smathering of written communication skills, and
they follow a manual written by folks equal to themselves.
......................................
MOST buyers already KNOW that sellers are responsible for safe delivery.
The problem IS that MOST sellers continue to think/claim that their responsibility
ends when they hand a sold item to a carrier.
As MOO noted, lots of sellers have been trying to transfer that burden to
buyers for years. >>
>>
FEEBAY AND PIGPAL SUCK !!!!!!!!!!!!!!
<< <i>
<< <i>MOST buyers already KNOW that sellers are responsible for safe delivery.
The problem IS that MOST sellers continue to think/claim that their responsibility
ends when they hand a sold item to a carrier.
As MOO noted, lots of sellers have been trying to transfer that burden to
buyers for years. >>
>>
I get what you are saying, but I do not completely agree. The best comparison I can make is an appliance store. They will cover manufacturer defects with their warranty but that's about it. If something happens to the appliance by some other method, the only way to cover it is to buy the optional, extended warranty at the buyer's expense.
It is the ebay seller's job to ensure the item is properly packaged and mailed using the proper method. But once it's out of my hands, it's out of my hands. If the buyer wants protection for things out of my control, he needs to purchase the extra coverage. He, like the buyer of the appliance, should be reasonably expected to assume some of the risk, and to select optional protection. Maybe it's a trade-off for the convenience of having the item delivered to his door and not having to shop around town for it.
//////////////////////////////////
The UCC arguments - and the right to contract - simply do not
fly with EBAY/PayPal.
When your contract terms conflict with EBAY/PP TOS, you lose.
Sellers who claim their sales are FOB simply are not recognizing
that on EBAY/PP there is no such concept.
Further, virtually ALL retail commerce has moved in that direction.
EBAY cannot be expected to be any different than their ONLY
competitor, AMZN.
...........................
I still have ONE FOB customer from the old days. Once or twice
a month, I ship a palletized load to him. He either sends me a
check in advance or pays COD to the carrier.
Once the load leaves my back door, I am off the hook. The buyer
pays ALL freight and insurance costs. LOTS of regular B2B biznez
is still done that way; retail B2C seldom is.
<< <i>
<< <i>
<< <i>MOST buyers already KNOW that sellers are responsible for safe delivery.
The problem IS that MOST sellers continue to think/claim that their responsibility
ends when they hand a sold item to a carrier.
As MOO noted, lots of sellers have been trying to transfer that burden to
buyers for years. >>
>>
I get what you are saying, but I do not completely agree. The best comparison I can make is an appliance store. They will cover manufacturer defects with their warranty but that's about it. If something happens to the appliance by some other method, the only way to cover it is to buy the optional, extended warranty at the buyer's expense.
It is the ebay seller's job to ensure the item is properly packaged and mailed using the proper method. But once it's out of my hands, it's out of my hands. If the buyer wants protection for things out of my control, he needs to purchase the extra coverage. He, like the buyer of the appliance, should be reasonably expected to assume some of the risk, and to select optional protection. Maybe it's a trade-off for the convenience of having the item delivered to his door and not having to shop around town for it. >>
Here's how I think about it. I realize reasonable minds can disagree, but here's what I see in e-commerce (my full time job is with a major e-commerce retailer). There is such as thing as industry standard that almost every e-tailer follows these days.
The industry standard is the Seller has the responsibility to make sure the item gets to the buyer. You don't see Amazon charging insurance for your order. Were the order not to arrive, they bear the burden and either re-ship a comparable item, or refund you the money. They DO NOT come back with "sorry, you didn't buy insurance." With our customers, if an item doesn't arrive, we can track it and determine what happened. If, for some reason, the item gets lost in the mail, we gladly provide a credit, refund, or replacement. We see it as a cost of doing business rather than paying for insurance on every shipment we make. When it's all said and done the % of items "lost" in the mail is miniscule.
So, while ebay has allowed sellers to charge insurance to buyers, my guess is that they've heard feeback loud and clear from buyers that they don't like it because it's not something they're used to paying for anywhere else. The extended warranty example doesn't quite fit because warranties really are about covering the operation of the product once it has shipped safely to your house. Warranties have nothing to do with insurance around shipping. In other words, if that appliance did not arrive at the house, most retailers I know would be on the hook to provide a replacement or refund your money. In addition, the warranty is usually between you and the manufacturer not between you and the retailer, though I know some exceptions do exist (i.e. remember Circuit City?), yet most retail shipment transaction are between the buyer and retailer (not manufacturer).
It's clear that some sellers in this forum feel justified in forcing the buyer to pay for insurance and that the they are not liable for items lost or damaged once the item is in the hands of the shipper. I get that argument. But, it's not the industry standard, which--rightly or wrongly--IS what most customers are going to judge you by. So, one (not calling anyone out here specifically) can choose to complain incessantly about how unjust the ebay system is OR one can choose to adapt to the eBay changes and find a way to cover your cost or justify a change in your shipping/insurance policy. If not, ditch ebay, pure and simple. For me, I switched to BIN and never charge for shipping and insurance. Even if I sold via auction, which I do on occasion, I've found offering free shipping does several things. First, it maintains my rating (5, 5, 5, 4.9) which saves me 20% of my final value fees. That alone saves me far more money than I expend in cost to buy shipping and insurance. Second, though I can't prove this in eBay, I hope it is one reason that draws back customers to purchase from me again. Many of my sales are to repeat customers. And, my items are $500 and up, so I can understand that it might be tougher to do on lower ticket items.
My overall point is that eBay is trying to win back buyers. Buyers who have lots of choices where to buy their goods. Buyers who are used to getting free shipping on items over $25 (Amazon) and buyers who have many, many e-commerce alternatives besides eBay. Nearly every major online retailer offers free shipping hurdles on orders over $x (avg=$50), yet I'm constantly amazed by ebay sellers complaining about not charging enough shipping on eBay orders much more expensive than this.
However, eBay has to balance these changes (which favor the buyer) against pissing off the eBay sellers who have been supremely important to their historical growth rates. Simplifying the shipping, handling, and insurance into one line item (to me) simplifies the transaction for the buyer AND gives the seller the ability to charge for shipping, handling, and insurance. I do believe, however, that sellers that continue to charge exorbitant shipping rates and bundling insurance--however hidden--are going to pay for it in the DSRs and may come to find eBay no longer wants to do business with them. Year in and year out, all our e-commerce research suggests that the number one point of dissatisfaction among buyers is them having to pay for shipping. We may not think that is fair, right, or just, but at the end of the day, we have to find a way to meet that need the best we can and still turn a profit.
Again, people have different takes on this. Personally, I'm really glad I will not be forced by certain sellers to buy insurance, and I'm glad that there will be pressure for sellers to offer free shipping. To me, this is ebay establishing new policies that helps put them more squarely with e-tail standards around shipping and insurance. It's long overdue. In the meantime, ebay is giving lots of seller incentives to push sellers in this direction. In my case, it nets out in my favor.
Sorry for the novel, by the way. My fingers need a rest.
None of this makes any sense.
A better comparison is buying an appliance on line and never receiving it and the appliance company saying "too bad, you should have insured it".
If you think shipping an item is out of your control how can you possibly think a buyer has any control over it (or should have any responsibility for receiving it)?
When you pay your electric bill by mail and it doesn't arrive do you blame the electric company?
Isn't the convenience of having an item delivered to your door more than offset by the seller not needing to pay for a brick and mortar shop?
"Molon Labe"
<< <i>For me, I switched to BIN and never charge for shipping and insurance. >>
You make very good points, and thanks to the others who posted here as well.
I believe my underlying fear regarding this rule change is the future of the online auction format, which I think is crucial to the sports cards industry. Everyone seems to be in agreement that BIN is the future of ebay. I hope not.
Using BIN exclusively eliminates bidding wars, which are important for things such as vintage cards and antiques in establishing market price (IMO).
An item that sells for $2000 one month may sell for $800 the next, but that's the unique thing about this industry. These aren't ipods or DVDs we're selling, and the prices aren't fixed.
To counter the absence of a potential bidding war, I can put a BIN that's too high, causing my item to sit for a long time, but I don't want my items to sit.
I just sold a 74 Tigers team chklst PSA 9 for $300. I expected no more than $200 for it, and that would have been my BIN. I also sold a 77T Yankees team PSA 9 for $50+. I would have guessed closer to $20 on it.
BIN's are bad for me because I never know when an item will exceed what I expect to get for it. I think BIN can be bad for the buyer as well because if there is an item a collector has been waiting for, newly listed with a BIN, they might miss out on it b/c another guy snaps it up w/ the BIN before the collector even knows it's listed. The auction format gives every potential buyer time to notice it and bid or put it on their watch list.
So if this switch is inevitable, I hope another collectibles auction site emerges as a viable alternative.
Edited to admit that the appliance sale was a bad analogy.
I think a beautifully centered, high grade card should always be able to be auctioned. Even if I'm the loser it's exciting to see one of those cards that just pop going way over VCP.
"Molon Labe"
////////////////////////////////
THAT is why EBAY cannot afford to give much of
a darn about little sellers of collectible items.
NO public company can make satisfactory money
running auctions for low/mid-priced collectibles.
UNLESS, EBAY decides to bifurcate the used-items
and collectibles from the main site, sellers of such
items will just have to adapt to the rules that best
suit the BIG sellers of new commodity items.
JD continues to say he is creating the world's largest
"Outlet Mall." There will be places in that mall for
stores that sell BIN-collectibles, but auctions just
cannot contribute enough to be supported by "easy"
customer-service policies.
The EBAY model can ONLY compete with AMZN if ALL
EBAY sellers are able to offer the same service levels
that AMZN's shoppers have come to expect.
................
The insurance "change" may now help small sellers
better understand that using BINs with "free" shipping
is the best way for many of them to do well on EBAY.
holy crap, your nuts
im not in business to lose money, stop worry about your DSR ratings and keep the money in your pocket.