A lesson on overcharging on postage

[ljhosking]

I’ve been selling online for 15 years, I have never deliberately overcharged on postage and if my postage quote was higher than the actual postage, I have always refunded. Postage is postage is postage, it’s not up to sellers to add costs to postage ie: packing, eBay and PayPal fees or as I’ve seen petrol costs to drive to the PO. I was overcharged $11.70 on postage, postage quoted $20, postage on parcel $8.30. Item was damaged because she didn’t box it as she said she would. Everyone told me “good luck getting that back, PayPal won’t give a partial refund for postage” Well.....PayPal did give me the refund, I sent PayPal screen shots of the messages between the seller and I where the seller states “eBay policies allow me to add costs to postage to cover my costs” wrong thing to write. eBay and PayPal do not allow sellers to add their eBay or PayPal fees to the postage, that goes against their polices. PayPal is starting to enforce this now and I recieved my refund last night. The seller is lucky I didn’t send the item back for a full refund, fair is fair. Add all costs to the item your selling, not to postage. I hope this stands as a lesson 

[davewil1964]

I suspect Julianna is beyond outcomes, sad or otherwise.

[springyzone]

I understand what is going on here, in that all the years you have been selling, you have been only charging exact postage & meticulously refunding if postage ended up being a little lower than expected. So you've been hurt when a fellow seller hasn't done the same and in fact  charged you more than double the actual postage paid.

I haven't gone in to look at the ad but from what others have said, it didn't promise to send in a box, just mentioned a box would add considerably to postage costs, which it would.

My first thought when reading your post was that sellers are entitled to add a little bit to postage costs to cover actual  expenses. Bubble wrap, tape etc are not free. As a seller, we usually did that unless the item was going in a prepaid satchel & was unbreakable etc. In that case, we charged exact postage.

As a buyer these days, I often find I am charged slightly more for postage & I am okay with that. Never have I been refunded and I don't expect to be. I actually don't think you should be refunding people either. If they agreed to pay eg $12 postage & it ends up costing you $10, forget it. The only time I as a seller would have considered a refund would have been if we had grossly miscalculated and charged  the buyer way over the real expenses.

Now as to your present case. Without seeing your parcel & what extra supplies were used, it is hard to say what a 'fair thing' for postage would have been. But I do think that the seller was....  foolish for charging you over double the cost of actual postage as that never goes down well. 

The fact the hat was damaged is more concerning & I believe if this was the case then you could have put in an item not as described claim.

Unlike others here, I did  find your post interesting because nowhere can I see that the seller actually said in the message that they were adding paypal fees etc to postage. In your post, you say they wrote they can add costs to postage to cover their costs.

That could be interpreted to mean costs such as bubble wrap etc

So I am wondering why ebay refunded the extra to you. 

I suspect the others are right & the seller should have written it was just packing & handling costs but I also suspect that what may have swung ebay your way was the fact that the postage charge was so far over the actual cost. Extra packing materials on an $8.30 item are unlikely to come to $11.70, & I'd say the ebay rep was suspicious the costs were indeed ebay & paypal fees.

Your post would not be a lesson to sellers to only charge exact postage costs but it is a lesson on how to respond to such a question & also, I think, a reminder that it probably makes for better buyer perceptions if the fees are hidden in the item price.

[yeoldecoinco]

The postage cost was clearly listed when you bought the item and you had the choice to buy it or not and knew what the postage would be.

As others have said, packaging materials AND eBay and Paypal commissions on the postage component, etc are not free, they have to be included in the price by the seller.

It is better for the seller to add these costs to the postage price than the sale price.

The sale price needs to be kept as low as possible to attract buyers.

Adding these fees into the selling price can make the price look uncompetitive in this ferociously competitive market.

Also, the postage price is clearly displayed. The buyer has the choice to accept or reject paying the amount of postage listed, if they think the postage is too much, then presumably, they don't buy the item. I know I don't. If I want to buy something and it looks like the postage cost is too high, I simply do not buy it and look for something cheaper.

A couple of years back I tried free postage on all items. It was a disaster for sales, because I had to add the postage price into the sale price for the item which made many items look too expensive. Buyers will often buy multiple items and then get an invoice for combined postage, with "free" postage they do not have an option to get a reduction in the overall postage price.

I often pay postage refunds and would not charge $20 for an $8.30 item. If  I did, I would refund $9 or so, figuring that the rest was lost in eBay and Paypal fees on the postage component. That is fair.

People often, for some reason, buy multiple items and pay the postage on each item, rather than waiting for a combined invoice.

This may be because the eBay system gives some buyers no choice but to pay individually for each item.

They often pay $20 for $8.30 or so in postage. When they do, I say to myself, $20 - 11% (eBay & Paypal fees) = $2.20. Less any additional 30c Paypal fees on each item that could have been avoided if a combined invoice had been requested = say approx $3 in total.

$11.70 - $3 = $8.70 refund. Simple. It is wrong to charge $20 for $8.30 in postage, but neither is it fair to the seller to refund the entire $11.70. Also, as some have pointed out, postage costs can vary a lot depending on the postcode and a seller has to take this into account when setting a flat rate postage cost.

Today, as with most days, I sent postage refunds in several packets to buyers who had bought multoiple items but paid for each one separately.

Their refund reflected the formula described above. It is good business to do this. Buyers are pleasantly surprised to get a refund and will often come back and spend more if they feel they are being looked after and treated fairly.

[yeoldecoinco]

Always a good idea to refund excess postage, keeping in mind the 11% eBay and Paypal charge on the postage component.

Makes good business sense and if a buyer is happy, they will usually buy more.

Here is an email from a buyer we received today:

"Hi Richard and Su
Thank you for my two recent purchases, which I collected this morning - very nice items. And I really appreciated the $5 postage refund, which was a lovely surprise."

Hopefully, this buyer will be back for more, which is what we want.

Short term view on excess postage is to put the money in your pocket.

Long term view is to encourage buyers by not ripping them off.

[digital*ghost]

I do this as well - automatically combine all separate orders as long as they are going to the same name and address (I get some buyers who purchase separately and send to different addresses), and refund overages the same day (via PayPal, or in cash if they used bank deposit, which has happened once or twice over the years).

Otherwise there is not usually any postage excess as my shipping is based on the cost of a 125g priority large letter, and is offered as a flat rate (this often means I pay more than the buyer did for actual postage costs, either because the letter is over 125g, or I've had to upgrade to parcel services).

Most people don't say anything about the refund(s), but repeat business is half my business, so I presume it's appreciated by those who continue to purchase and pay separately (I have a few regulars who do this). 

Funnily enough, not once in years of solid trading using this business model, has a buyer paid $3 for postage, received a 5kg satchel with insurance and SOD, and offered to pay the difference. Not that I would ever expect (or even hope) that they would, as I knew exactly what I was doing when I devised this model, but - as a mildly interesting sidenote - it's the same with products as well, which I sell in multiple-quantity packs. I have regulars and it's kinda funny that no one ever contacts me to say I sent them too many pieces in a pack (I often put extra in there, especially if they are measured by weight rather than counted), but they do contact me if there's only 99 instead of 100, and the fact they got 104 last time doesn't matter.  In other words, it's my loss if they get a "bargain", and my fault if they didn't, which I then need to rectify, lol.

Anyway, that wasn't my point, and I digress yet again  Those who say "postage should just be the stamp or label cost" (such as is suggested in the OP) not only appear to believe that their practices or beliefs are the only "right" ones and therefore should be applied to everyone "just because", they neglect to consider how many different types of businesses are out there, and that what's suited to one type of business doesn't necessarily mean it's suited to another.

Take a business selling fragile items that require lots of care and materials when packaging. If they put all of the costs of that in their item price, but those costs can be reduced significantly when the buyer purchases multiples, it's then possible a buyer will be paying excessive postage costs multiple times in a non-combinable, non-refundable way (at least officially, because the item price is the item price is the item price.... or maybe that's just the common perception  ). Low P&H costs on such items can actually turn buyers away, too, because they will get the impression the seller might skimp on appropriate packaging. 

Believe it or not, there are actually some customer bases out there that would get annoyed with token refunds for something like postage costing a little less than the seller charged - they paid the total, now they just want the stuff, stop messing with their accounting. 

At the end of the day, a seller who understands how it all works, what appeals to their target market, and has accounted for all of their expenses, will set up listing prices so that those expenses are covered plus extra for the profit they are looking for, in a formula that the majority of their customers either prefer, or will not take issue with. This can come from experience, trial and error, learning from others etc, but ultimately there is no one "right" way. 

[tazzieterror]

Digi, I normally agree with most of your points of view on these forums, but on this issue I'm going to walk a slightly different path. Regarding the following:

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@digital*ghost wrote:

...Those who say "postage should just be the stamp or label cost" (such as is suggested in the OP) not only appear to believe that their practices or beliefs are the only "right" ones and therefore should be applied to everyone "just because", they neglect to consider how many different types of businesses are out there, and that what's suited to one type of business doesn't necessarily mean it's suited to another.

...

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The seller in question is clearly not a business seller and is just an individual clearing out unwanted possesions, so "suitability" of postage charge models doesn't really come into play here (I realise on that point you were addressing the OP's general stance on the subject and not necessarily this specific transaction).

While there are costs involved in selling on eBay that need to be accounted for, here's what eBay's Selling Practices Policy says about 'Postage and handling charges':

What you can charge

• Actual postage cost: This is the amount for posting the item. It should be what you paid the carrier.
• Handling cost: This can include the cost of packaging materials.
• Delivery confirmation and extra services: If these options are offered to the buyer, you can only charge what they actually cost.

To those here who think the postage charge is there to recover your eBay and PayPal fees with, you are misguided in your belief. The amount charged should reflect the cost of getting the item to the buyer safely. To put it another way, if the buyer were to collect the item from the seller, you would expect the postage fee to be nil - other costs associated with listing, selling, and receiving payment should be factored into the selling price.

Following on from this, I also disagree that happily paying $20 for postage means one voids the right to complain when the item arrives with an $8.30 postage label on it, especially if the seller appears to have used a cheaper packing or postal method to that indicated in the listing. Maybe they spent another couple of dollars on a padded envelope or satchel, maybe they didn't and reused one, but either way they would appear to have charged significantly more for shipping than the costs involved.

And in this instance, the seller has botched their item description by copy/pasting the first paragraph from some other eBay listing or website, and including the following line:

'Please note that with wide brim hats, the need for a wide box frequently balloons the priority shipping fee.'

To my understanding of the English language, that's close enough to saying "this ships in a box" and I too would be miffed if it arrived squashed in a satchel or padded bag, and would be asking questions of the seller, particularly since the item has been described as 'RARE' and is fragile by its very nature.

Perhaps an astute buyer might pick up on the term 'priority shipping' and guess the seller has borrowed part of the description from an American listing or site and seek clarification, but it's really up to the seller to ensure their listing and description are accurate.

While I can sympathise with the seller and doubt this was a deliberate decision to gain some extra dollars, I'm glad the buyer was able to obtain a partial refund of the postage fee.

[digital*ghost]

I ultimately empathised with the buyer in their original thread, particularly after they posted the condition of the hat upon arrival, and I understood there was a strong implication a box would be used. That empathy did not transfer to this thread, because while the first thread obviously inspired this one, the motivations for posting are clearly very different.

I took issue with this post because I see it as a completely separate topic, and an attempt to take their one dissatisfying experience as well as their own practices, and come to the seller boards to tell all sellers how they should be setting up their postage costs, therefore I did not consider the "hat experience" to come into play when answering and did not refer to it at all when doing so. It's worded like a cautonary tale, but takes such a narrow view on the issue, the moral of the story is nowhere near what the OP intended. (I also question whether it was indeed PayPal that granted the refund, considering they offer no such protection on postage costs, and if it was PayPal, I would not be surprised if it was a discretionary refund and the seller lost nothing). 

The OP attempts to dictate that only postage costs should be charged to the buyer under the heading of postage, and specifically states "it's not up to the seller to add costs i.e. packing", which I strongly disagree with, and  -as you have shown - so does eBay policy. You'll also note that I didn't mention eBay or PayPal fees in my second, lengthier post when talking about postage costs, rather the only example I provided where I mentioned costs in addition to actual stamp price, was packing cost, and I tried to demonstrate how including those in the P&H cost can actually be better (for buyers and sellers). 

It is not up to anyone else to say what any given seller's handling costs are, or should be, and if a seller incurs costs to package an item, it is not only reasonable to include those costs in postage, but recommended if they are reducable costs, as it can be applied to combined postage rates. It doesn't matter if the seller is an infrequent casual seller, or a high volume business (I just tend to use "business" as a catch-all because I'm speaking from my own perspective as a business seller, and it's easier to type "business" than "selling activities at any level").

eBay allows sellers to charge for pick-up - it doesn't matter what buyers expect, what matters is whether or not a seller is acting within laws and policies. 

My purpose in posting in this (and in fact, many others), is to point out that just because someone doesn't get what they expected, doesn't mean the seller is automatically in the wrong. 

[countessalmirena]

tazzieterror, you make points worth considering. I do see digital*ghost's take on this a sensible one, particularly in view of the issue of "reducible costs".

I agree with you that the hat listing seemed to suggest a safer method of postage than simply squishing the hat into a satchel and hoping for the best. The seller should have known better than to list with a postage cost of $20, since that wouldn't have covered the cost of posting with the hat in a box - by a long shot! I wish I knew what the listing actually stated about postage method in the postage tab... because if it didn't refer to postage being in a box, then the buyer must bear some blame in not reading those details correctly.

(The buyer was of course entitled to receive the hat in safe condition.)

Where the Selling Practices policy page states:

❝Handling cost: This can include the cost of packaging materials.❞

... that appears to allow whatever may come under the heading of "handling costs" to comprise the total handling cost. Some sellers will have substantially higher handling costs; some sellers will absorb their handling costs; some will be able to reduce handling costs if the buyer is purchasing multiple items. eBay do not say that the handling cost is composed of the cost of packaging materials and nothing but packaging materials; they only state that handling cost can include the cost of packaging materials. I see a very legitimate handling cost being the cost to deliver the parcels to the nearest AP (or similar) for some sellers, because that is a cost which the seller incurs. Presumably that is one reason why some sellers have a 3- or 4- (or more) day handling policy so that they can bundle deliveries to lower their handling costs.

I also consider (as a buyer! I have only ever sold on eBay as part of an experimental fact-finding mission) that the postage price is the only possible item where the eBay fee on postage can legitimately be placed - in particular if the item's going to an overseas buyer. International tracked postage (possibly with signature on delivery) isn't cheap, and I can't see any other way for the seller to cover that particular FVF, since it's impossible at the time of listing to know whether the buyer will be local or overseas, and the disparity between the cost of local postage and overseas shipping would be so wide.

(Just for the record, if I were selling on eBay, I would think it ineffective to stuff the handling cost unreasonably.)

The issue of a pick-up fee is something I've posted about in one of the other recent threads (non-hat), and I concluded that as a seller can charge a pick-up fee and that in some cases it would be legitimate, it then comes down to the buyer's own decision about whether to go ahead with the purchase. Some buyers will always be put off by a pick-up fee, and will feel that it's outrageous irrespective of the seller's reasons for stating that there's a pick-up fee. I do consider a pick-up fee of $40 to be something I wouldn't want to pay. I simply wouldn't buy from a seller in that case.

Wait. Possibly I would. $40 as a pick-up fee for a rare and gorgeous item that I want and which is priced a great deal lower than I'd have expected, and which I have good reason to think is genuine - well, hold me back from paying that pick-up fee without an ounce of regret!

(It would probably be a poor selling strategy to include pick-up fees if one were selling only on a casual or infrequent basis, since quite a few buyers would probably be inclined to express their unhappiness with such a fee via feedback, even using the power of the red dot. But I do think that every seller should have the right to run their business according to their own business model, as long as it's not contrary to Australian consumer legislation, and of course it would be stupid for an eBay seller (in Australia) to have selling practices contrary to eBay policy...

Just as an aside, did you notice on that page eBay's spiel about item location misrepresentation?

❝What not to do

• Provide incorrect or inaccurate item location
• State 'Australia' when the item is actually being sent from China❞

What a hoot! It's one thing to have a policy, but eBay clearly don't (well, can't) even begin to enforce this when it comes to Chinese sellers!

[jimaras_50]

Ebay continues to rort money of other peoples blood sweat and tears. It's a common story with ebay - rules to line their collective pockets. In all, it is the fault of sellers.In most industries there are unions that battle to ensure workers rights. But the way ebay works, is having sellers challenging sellers. It should be sellers uniting and challenging ebay. But as long as their is independence between sellers, nothing will change. You will always be working for a pittance

[countessalmirena]

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@jimaras_50 wrote:

[...]

You will always be working for a pittance

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Not I.

I don't sell on eBay. (I'm a buyer only.)

I doubt your statement is true of many eBay sellers - those sellers who have focused on items that sell well and where the margins are sufficient to generate profit in spite of the eBay and PayPal fees, postage fees, and retail shrinkage (not least of which is due to BBB - Bad Buyer Behaviour). For sellers who haven't performed risk analysis and calculated what losses their business must allow, and also taken into account every single cost involved in their selling, selling on eBay must be terrifying and soul-destroying. I can only urge such sellers to rethink their business strategy, because ultimately a poor business model that doesn't create profit will hurt both seller and buyer.