eBay will be partnering with Escrow.com to provide escrow services for luxury watches priced at $10,000 or more starting the week of April 20th, 2021 and increasing FVF as of May 3rd, 2021.
As part of our ongoing focus on creating the best watches experience, starting the week of April 20, 2021, you will see an optional payment via escrow through our partner Escrow.com for luxury watch listings priced at $10,000 and up.
If you list watches priced at $10,000 or more, we recommend that you register with Escrow.com. Learn how to create and use an escrow account on Escrow.com
In addition, eBay covers any processing fees for escrow services so buyers won’t pay any additional fees.
What happens when a buyer chooses the escrow payment option
Escrow transactions differ from other sales in a few important ways:
- Either wire transfer or ACH electronic check can be used to fund an escrow transaction.
- When a buyer selects the escrow payment option for your luxury listing at checkout, eBay will redirect the buyer to Escrow.com. Following checkout completion, you will be notified by Escrow.com and eBay to create or log in to your Escrow.com account.
- The return policy for escrow transactions includes a 7-day inspection period. Your return policy will be overridden, even if you offer no returns, to the 7-day return option if the buyer chooses escrow.
- Payment will be held in escrow until the buyer has received and accepted the item, or the 7-day inspection period from the delivery date.
While eBay isn't directly charging a fee for the new escrow services, they are increasing the final value fees for Watches starting May 3rd 2021, which strikes me as a not so subtle way to spread out the costs of authentication and escrow to all sellers in the category.
This means sellers of watches that are less than $2,000 (minimum for authentication) or less than $10,000 (minimum for escrow) are effectively subsidizing these services being offered for the higher end, luxury sellers in the category.
For non-store or starter store sellers in Managed Payments the FVF on sales up to $1,000 is going up 2.65%.
For Basic, Premium, Anchor, and Enterprise Store sellers in Managed Payments the FVF on sales up to $1,00 is going up 1%
They didn't give current rates in the chart below for sellers not in Managed Payments, but non-store and starter store sellers there are currently at 10.2% which means a 2.65% increase and Basic, Premium, Anchor, and Enterprise Store sellers not in Managed Payments are currently at 9.35% which means an increase of 1%.
Clearly the smaller sellers are going to be bearing the brunt of this change.
Fee info from the eBay announcement:
New final value fees for non-Store and Starter Store sellers who use eBay to manage their payments
New final value fees for Basic, Premium, Anchor, and Enterprise Store sellers who use eBay to manage their payments
The new final value fees for sellers who do not use eBay to manage their payments*
*Third-party payment processing fees may apply.
I do have to applaud eBay for providing those side by side comparison charts for the new fees in this category.
Many sellers asked for a side by side comparison chart for fee increases included in the Spring 2021 Seller update, but Justin Johnson from eBay's Global Update Team said that was just too complex.
We don't have a side by side. This is really complex for us to display the data in a very, in a digestible and consumable way...I would encourage everybody to go look through the Seller Update pages. There's a link on the fees and financials page to go to a page with a bunch of fee tables that break this down a little bit more on a category level.
To complicate things a little bit, we also have to look at it for sellers that have a store versus sellers that don't have a store. And then both of those have to be looked at for sellers that are in Managed Payments and not in Managed Payments.
This is part of the reason we didn't do a side-by-side because it was just going to be extremely complex and not something that was probably going to be understood by even us internally, much less those externally that we were trying to help understand.
Since eBay thought it was too complex, I took the liberty of breaking it down into a side by side chart for sellers in Managed Payments.
I'm glad to see eBay has found some internal understanding and the team was able to provide this information to sellers in an easily digestible way this time.
CEO Jamie Iannone has said "openness, honesty, respect and doing business with integrity drives our success" - providing this kind of visibility on the impact of fee changes is what doing business with integrity looks like and I sincerely hope eBay continues the practice.