I’ve done a few threads on eBay feedback, today I want to discuss ways to fix the eBay shipping scam. In this scam, a significant proporation of eBay sellers are listing items low, sometimes below cost, and charging shipping fees far above cost. It’s not uncommon to see an item with a $1 cost and $30 in shipping rather than fairer numbers. The most eBay has done about it is allow the display of the shipping fees when you do a search, so you can spot these listings.

I am amazed eBay doesn’t do more, as one of the main reasons for sellers to do this is to save on eBay fees. However, it has negative consequences for the buyer, aside from making it harder to compare auctions. First of all, if you have a problem, the seller can refund your “price” (the $1) but not the shipping, which is no refund at all. Presumably ditto with paypal refunds. Secondly, the law requires that if you are charged more than actual shipping (ie. handling) there is tax on the total S&H. That means buyers pay pointles taxes on shipping.

Again, since eBay would make more fees if they fixed this I don’t know why they have taken so long. I suggest:

• Let buyers sort by shipping fees. Pretty soon you get a sense of what real shipping on your item should be. A sort will reveal who is charging the real amount and who isn’t. Those who don’t provide fees get listed last — which is good as far as I am concerned.
• Let buyers see a total price, especially on Buy-it-now, shipping + cost, and sort on that or search on that. Again, those who don’t provide a sipping price come last.
• Highlight auctions wthat use actual shipping price, or have a handling fee below a reasonable threshold. This will be unfair on certain high-handling items.
• Of course, charge eBay fees on the total, including handling and shipping. Doesn’t help the buyer any but at least removes the incentive.

Now let’s talk about the reputation dynamics of the transaction. The norm is buyer sends liquid money sight unseen to the seller, and the seller sends merchandise. Why should it necessarily be one way or the other? In business, high reputation buyers just send a purchase order, get the item and an invoice, and pay later.

I think it would be good on eBay to develop a norm that if the buyer has a better reputation thant he seller, the seller ships first, the buyer pays last. If the seller’s rep is better, or it’s even, stick with the current system.

Sellers could always offer this sort of payment, even when the seller is high-rep, to high-rep buyers as an incentive.

There should also be special rules for zero-rep or low-rep sellers. By this I don’t mean negative reputation, just having few transactions. Who is going to buy from a zero-rep seller? The tradition has been to build up a buyer rep, and then you can sell, which is better than nothing but not perfect.

When the seller has a very low rep, the seller should just automatically assume it’s going to be send-merchandise-first, get money later except with very low rep buyers. Low rep sellers should be strongly encouraged to offer escrow, at their expense. It would be worth it. Often I’ve seen auctions where the difference in price is quite large, 20% or more, for sellers of reputations under 5. eBay should just make a strong warning to the low-rep sellers that they should consider this, and even offer it as a service.

Update: I’ve run into a highly useful Firefox extension called ShortShip. This modifies eBay search pages to include columns with total price. Their “pro” version has other useful features. You can sort by it, but it only is able to sort what was on that particular page (ie. the auctions close to ending, typically) so the price sort can be mistaken, with a cheaper buy-it-now not shown. eBay is so slow in adding software features that extensions like this are the way to go.