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eBay Service Metrics: Unfair?

Are eBay Service Metrics Unfair?

eBay Service Metrics are arguably unfair. In early 2020 if your Not As Described Returns Rate Service Metric was Very High eBay started applying a 4% surcharge to your seller Final Value Fees. Your Final Value Fees could increase by 80%+ overnight!

Below is a real-world example of the impact the 4% surcharge can have on your selling costs (taken from a real business before using our platform).

Chart illustrating how eBay Service Metrics are unfair. See the impact of the 4% Very High Is Not As Described Returns Rate Seller Fee Surcharge.
The cost of selling on eBay (eBay & PayPal fees) as a percentage of eBay revenue.

Reasons Why eBay Service Metrics Are Unfair

Comparing Parent Category Rather Than Sub-Category

eBay claims to compare your Service Metrics against similar sellers to determine whether your rate is Low, Average, High or Very High. A ‘similar seller’ is determined by a number of factors, including Category.

The trouble is, eBay compares on the Parent Category level, even if the majority of your items fall under one Sub Category. In this sense, eBay is comparing apples with oranges.

Here’s an example…

Let’s say you are a mobile phone retailer. You sell mostly high-end refurbished smartphones e.g. iPhones and Samsung Galaxy models. Your parent category is Mobiles Phones & Communication. Your entire product range therefore falls under the Mobile & Smart Phones sub category. However, eBay can still compare your metrics against people selling in all the other Mobile Phones & Communication sub categories, which can include all manner of dissimilar items:

A sample of eBay sub categories for the mobile phones & communication parent category to illustrate how eBay Service Metrics are unfair
A sample of eBay sub categories for the mobile phones & communication parent category

Comparing your Service Metrics against people selling dissimilar items is unfair because dissimilar items will probably have dissimilar return rates.

Continuing our example, will someone selling Dummy Mobile Phones have a similar % of people returning it for being defective? Probably not. Therein lies the problem of eBay comparing Service Metrics to peers on a subcategory basis.

No Appeal Process

Another reason eBay Service Metrics are unfair is that there is no appeal process. This is contrary to Seller Level metrics which have a well defined appeal process. Trust us when we say we tried everything to appeal the Very High Not As Described Returns Rate surcharge for our eBay business.

The Penalties Last A Long Time

As you can see from the chart above the Very High Is Not As Described Returns Rate surcharge took months to work its way out of the system, even though we took immediate action to address the problem.

How long will eBay’s 4% Very High INAD Returns Rate Surcharge Last?

To understand how long eBay’s seller fee surcharge lasts, it is important to understand how it is calculated. Essentially, eBay looks back either 3 months or 12 months, depending on your transaction volume.

The length of time eBay looks back is problematic. It means that even if you take immediate action to address a Very High INAD returns rate, due to how many historical transactions eBay takes into consideration, any changes could take a very long time to take effect and bring down the overall rate.

Even if you bring your projected rate down below Very High, you will still have to wait until the 20th of the month before it becomes your current rate and you start to see the 4% surcharge removed from future transactions.

Questions or comments

Returns.Guru cloud software is all about helping online sellers manage and reduce their multichannel returns. We want to see your business succeed. If anything in this article was unclear or you want to pick our brains about eBay’s Service Metrics drop us a comment below!

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