eBay UK Buyer Protection Fee: Does The Math Add Up?
UPDATE 2-10-25
eBay UK community staff have confirmed this Buyer Protection Fee discrepancy is due to VAT not being calculated correctly.
jimthing
Just two days into the launch of eBay UK's new Buyer Protection Fee, sellers say the math doesn't add up with eBay apparently taking 3p less than they should on every transaction.
The apparent fee calculation error was revealed in an eBay UK community forum discussion started by a seller who was trying to figure out a way to create a simple spreadsheet with the calculation baked in to help them determine how to set item pricing in order to still show buyers more attractive round number or .99 pricing rather than random amounts many listings with the buyer fee added in currently show.
But while trying to work out those calculations, some sellers noticed eBay appears to be incorrectly taking 4% off of the £0.75 - leaving them actually collecting £0.72 for that part of the fee instead.
jimthing
Ebay have set this up wrongly, as they're working out the fee wrongly!
While Ebay's help says in their example:
£20 - Item price set by the seller
£1.55 - Buyer Protection fee (4% of £20 [i.e. £0.80], + £0.75)
£21.55 + postage - Price that buyer sees for the listing
£20 - seller earnings
The list-an-item page works it out incorrectly as:
£20 - Item price set by the seller
-£0.75 - minus fixed fee
= £19.25
£0.77 - Buyer Protection fee (4% of £19.25)
= £1.52 - TOTAL FEE (£0.75+£0.77)
£21.52 + postage - Price that buyer sees for the listing
£20 - seller earnings
This is ENTIRELY THE WRONG WAY according to Ebay's own help page!
As proof, the seller showed a screenshot of what the listing form shows when entering a price of £20 - saying UK buyers will pay a £1.52 fee for Buyer Protection.
But that clearly doesn't match the example eBay gave in their own help and policy page which shows on a £20 item it should be £0.80 variable fee plus £0.75 fixed fee for a Buyer Protection Fee total £1.55.
On another community thread dedicated to the issue, one seller surmised eBay may be taking the 4% variable fee off of the fixed fee - which would make sense given the amount of the difference.
jimthing
I've got no idea how exactly the calculation is going wrong but my guess is somehow the 4% of the buyer fee is getting mixed in with the 75p fixed fee - the 3p discrepancy is 4% of 75p
We can also see this isn't just a display issue on the listing form - the incorrect calculation is also what shows and is being charged to buyers on live listings.
Narrowing search results down to between £20-£22 shows no results at £21.55 and a lot of results at £21.52, proving the calculation on the listing form is what is being used for the live listing, not the calculation shown on the help and policy page.
Side note - it appears this has completely broken the sort by price functionality for buyers too.
Using the "lowest price plus P&P" sort option, it's obvious that eBay is sorting based on the item price the seller set, not on the fee inclusive price shown to the buyer, which makes lower total price options from business sellers appear randomly mixed in with higher total price fee inclusive results from private sellers.
That's a terrible buyer experience now matter which way you slice it.
While I do believe in this instance the calculation is incorrect and eBay will be fixing it soon, it's interesting to note the actual language in their help and policy page says the fixed fee will be "up to" £0.75 - seemingly leaving wiggle room for eBay to charge less than that should they choose to do so at any time, for any reason, on any transaction.
Either way, even small mathematical errors don't exactly inspire confidence in the process, especially not after eBay already had to make a last minute change to a phased roll out, then suffered a failure to launch and two day delay and buyers are already trying to find creative workarounds to avoid paying the new fee.
Liz Morton
Are you seeing discrepancies in eBay's Buyer Protection Fee math? Let us know in the comments below!
I believe I am not alone in saying this.
Also when making offers to sellers, again very confusing as the buyer does not know if the offer is still including the buyer PF or will that be added ?
Example
Seller lists at £20
Ebay shows price as £21.52 (this is what the buyer sees)
Buyer wants to offer £2 less -
so how much does he offer £18 or £19.52 ?????????
Why on earth has ebay made this
so confusing.
I buy and sell on ebay. But seriously I am now considering doing neither!!
If it's not that, I'm not sure what else it could be, but would be happy to take a look into it further if you want to email me some screenshots or more details - liz@valueaddedresource.net
A little searching, and I came upon so-called "Buyer Protection". The majority of my listings are in the Home & Garden category, by the way.
The introduction of Buyer Protection for my listings definitely happened yesterday as I had a single purchase yesterday and the higher price the buyer paid appears in Seller Hub, while sales from the day before and all previously have identical item and total prices (no "Buyer Protection").
It seemed too good to be true when eBay UK did away with final value fees for private sellers at the beginning of October. There was much fan-fair in the media. It should come as no surprise that having allowed us to bask in fee-free sales for a few months eBay is now pushing through changes aimed at increasing revenues.
Earlier this month, eBay began holding on to payments made to private sellers for up to 14 days. Where an item is delivered with tracking which shows it to have been delivered, payment comes through two days later.
Having previously done away with Final Value Fees on the seller, which in many categories was 12.8% +30p, it has now introduced the Buyer Protection fee on the buyer which is supposed to be 4% +75p. I say "supposed to" because I too noticed the discrepancy, which I will come on to.
To return back to my own experience, once it had sunk in what was happening, I realised that in order to have my prices showing with endings .49 and .95 I would need to reduce the prices in my listings. A spreadsheet was in order to calculate this for the different price points that are of interest.
I was left scratching my head when the figures the spreadsheet came up with were a few pence lower than what eBay says they are! I am talking here about the price I would need to set my listing at being too low, and therefore the spreadsheet further calculated the Buyer Protection fee higher than eBay says it is. It amounts to between 2 and 4 pence, having calculated the prices buyers would pay from 4.95 through to 45.95 with endings .49 and .95. Clearly there is always the question as to whether the result is to be rounded up/down to the nearest whole penny or always rounded up where there is a fraction, but this discrepancy is beyond any rounding error.
Examples:
Buyer pays 12.95. Spreadsheet calculates (12.95-0.75)/1.04 = 11.73. This means the Buyer Protection Fee should be 1.22. Yet eBay (on the listing page) says for an Item Price of 11.73 it is 1.19 which gives a buyer price of 12.92. Thus, the Item Price the seller must use to get a buyer price of 12.95 is 11.76.
Buyer pays 15.49. Spreadsheet calculates 14.17 with Buyer Protection Fee of 1.32. On setting the Item Price to 14.17 it says that the Buyer Protection Fee will be 1.28, which gives a total 15.45. Thus, the Item Price one must use is 14.21.
In my spreadsheet I also calculated Final Value Fees at the old rate (12.8% + 30p) and found that a buyer price of a little below £5 is the break even. Below that and the Buyer Protection is more expensive and above it is cheaper.
Why not just change the Final Value Fee to 4% + 75p in order to achieve the same end? There would then be no need to make drastic changes to the program code so as to facilitate a buyer fee which must be seamless to the buyer (albeit with a small message at the checkout) while non-existent to the seller (albeit with a small message on the listings page).
