For many years eBay has attempted to curb sellers' use of excessive shipping and handling, and now, it may be bringing buyers into the equation. eBay only charges fees on the item selling price, not including shipping charges. So if a seller prices the item at 99 cents and charges $20 for shipping, eBay only receives final value fees on 99 cents - not on the total $20.99 that the buyer paid.
eBay has tried many tactics to encourage sellers to offer low or free shipping, including requiring sellers to offer a shipping option under a certain price for some categories, offering better Best Match placement for listings with free shipping (and penalizing those with excessive shipping), and other fee-related listing incentives for offering free shipping. Enter the eBay Bucks loyalty program.
In the past it didn't matter to a buyer whether he paid $5 for the item and $15 for shipping, or $20 for the item and received free shipping. The total cost was the same to the buyer. Why should they care if eBay didn't get the full fees?
But eBay's new program, eBay Bucks, changes that. Buyers are able to earn rewards based on the purchase price of items they buy on eBay using PayPal. The buyer earns 2 percent of the purchase price (up to $200 per item and a maximum of $500 per qualifying period) and receives an eBay Bucks Certificate at the end of the quarter to use against purchases in the following quarter. Shipping is not included in the "purchase price" used to determine the reward amount.
Now the buyer has a reason to buy the $20 item with free shipping over the $5 item with $15 shipping. In the first example, the buyer receives 40 cents, in the second example it is only 10 cents. It sounds like small numbers, but if you're looking at items in the hundreds of dollars, or a buyer who purchases a lot throughout the quarter, which sellers do you think buyers will choose? Same item, same price, but one gets them a higher coupon to use during the next quarter.
This is the first time eBay has gotten buyers involved in the excessive shipping and handling battle, and if it may be far more effective than the other programs. Once the program is established and buyers really understand how to maximize their bucks, sellers who offer free (or greatly reduced) shipping and handling will likely be able to command higher prices.
Right now eBay Bucks is still in the beta phase, but more and more eBay users are being invited to participate. You can find more information about program on the eBay Bucks page.
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Lissa McGrath is the author of three eBay books, "The Complete Idiot's Guide to eBay" 2nd Edition (Alpha, 2010); "The Pocket Idiot's Guide to eBay Motors" (Alpha, 2008); and "20 Questions To Ask Before Selling On eBay" (Career Press, 2006). She is also the editor of eight other eBay books. You can reach Lissa directly at lissa (at) lissamcgrath (dot) com or through her website, LissaMcGrath.com.
