Excessive Shipping, Handling, and Insurance Fees

Table of Contents:

Q: "I offer my buyers U.S. Postal Service insurance on all shipments, but I recently found out where I can get shipping insurance at a lower rate than USPS offers. Since eBay does not have an option for me to charge insurance at the lower rate, can I still quote USPS insurance rates on my eBay listings and pocket the difference?"

A: The Excessive Shipping Charges policy on eBay, which can be found at pages.ebay.com/help/policies/listing-shipping.html, does not allow you to charge anything but the actual cost of insurance. Even if eBay doesn't enforce this policy against you, I will feel very sorry for you if your buyers ever find out what you are doing here. Don't do it. Instead, give your buyers a small refund for the difference in insurance cost, and send them an e-mail explaining why they are getting it. You will receive positive feedback on eBay like you wouldn't believe.

Q: "Can I self-insure when I sell on eBay?"

A: Absolutely not. The Excessive Shipping Charges policy on eBay, which can be found at pages.ebay.com/help/policies/listing-shipping.html, expressly prohibits charging your buyers for self-insurance. It's viewed as an excessive handling charge.

Q: "I have a couple of employees who help me pack and ship my eBay items. Can I add a few bucks to the handling charge I include in all my eBay listings to help cover their expenses?"

A: You may add a shipping and handling charge to the purchase price in your eBay listings. While eBay's policies clearly prohibit you from charging excessive shipping fees, they are a little more flexible when it comes to handling charges. The only requirement is that your handling charge be "reasonable"—you do not have to specify what your handling charge covers.

Look at other eBay sellers with similar merchandise and see what they charge in terms of a handling fee. If your handling charge isn't grossly out of line with theirs, you shouldn't have a problem. If you must charge a handling fee that's out of line with other, comparable eBay sellers, include a paragraph in your Terms and Conditions section explaining why you charge what you charge. And if people stop buying or bidding from you, bring your handling charge back into line with what others are doing.

Q: "I sell a lot of stuff on eBay. Do my shipping charges have to reflect my actual cost of shipping, to the absolute penny, or can I average the charges over multiple items to save time?"

A: You can average the charges over multiple items as long as your buyers don't feel they're being gouged. Nothing will get you into trouble on eBay faster than charging an excessive shipping fee. Experienced eBay buyers (especially those who are also sellers) generally know about shipping charges and will raise their eyebrows if they see you charging a shipping fee that is grossly out of line with their own experience on eBay. Generally, it's best to charge buyers what you actually pay for shipping. If you must average your shipping costs, put a paragraph in your Terms and Conditions explaining why you do that and assuring buyers that their actual shipping fee is never more than a few pennies more than your actual shipping costs.

Choice Listings

Q: "Can I take a photo of several items and list each of them separately on eBay with a photo of all items together?"

A: Yes. This is a perfectly valid way to get buyers excited about your other listings on eBay, although a film loop is a lot more effective and classy looking.

Just be sure you clearly identify which item in the photo the buyer is bidding on—there have been instances in which buyers thought they were bidding on the second item from the left when they really were bidding on the second item from the right. If that happens, you probably will have to refund the buyer's money to avoid negative feedback, even if you thought your listing was crystal clear.

Q: "Can I post a Buy It Now! listing on eBay showing several items and offer my buyers the opportunity to pick the one they like?"

A: No. This is a classic violation of eBay's Choice Listings policy, which can be found at pages.ebay.com/help/policies/listing-choice.html. These are prohibited because they enable you to list several items at once on eBay while paying only a single listing fee.

There are two exceptions to the prohibition:

1. Listings "may offer custom-made items or services that are created or customized to the buyer's specification. All offered options must be provided at no additional charge to the buyer."

2. Multiple-quantity listings (Multiple Item Listings, multiple-item fixed price, or Store listings) may offer a choice of color in otherwise identical items. However, the seller must be able to fulfill the entire quantity of every listing in any offered color even if every winning bidder makes exactly the same color selection. It is not permissible to state: "The highest bidder gets first choice."

Choice listings may not be offered "subject to availability" or require the buyer to contact the seller to see which colors are available or what quantity is available. The exception for choice of color does not apply to single-quantity listings.

Sales Taxes

Q: "I just sold something on eBay. The bidder paid, but when I went to ship the item I saw that he is a resident of my state and I realized I should have charged sales tax. My auction listing didn't say anything about sales tax. Can I go back to the buyer and ask him to add sales tax to his winning bid at this point?"

A: No. The law in just about every state I'm aware of prohibits you from tacking sales tax onto the buyer's purchase price if you did not say in advance that you were going to do so. That's why, in every one of your eBay listings, you need to include a statement along the following lines: "Note to Residents of State X [your state]: State and local sales taxes will be added to the winning bid or Buy It Now! price."

You are still required to pay sales tax to your state tax authority for this item. Unfortunately, you will have to take it out of the winning bid amount or Buy It Now! price.

Forced Sales

Q: "I just sold something on eBay and realized after the fact that I made a terrible mistake in the item description. I have apologized, explained the mistake to the buyer, and offered him a full refund of the purchase price plus shipping charges, but the buyer is furious and says I must go through with the transaction. Can eBay force me to sell this item? Can I be kicked off eBay if I refuse?"

A: If there are good reasons for you not to sell an item, as there are here, eBay cannot force you to do so. Still, there is a risk that this crazy buyer will complain to eBay that you are a nonperforming seller, and you will be on the defensive.

I recommend that you ship the item to the buyer and refund the difference between what the buyer actually paid for the item and what you think the item is worth when correctly described. Then explain to the buyer via e-mail why you did what you did. Few buyers (even crazy ones) will complain about getting an item they want for a reduced price. If the buyer still is not happy and protests the transaction, you will look a lot better to eBay's dispute resolution team.

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