eBay Opens Co-Funded Coupon Program Up To Canada, Sellers Debate If Terms Are Worth It
eBay is opening up their Co-Funded Coupon Program to sellers in Canada, providing opportunities for sellers to participate in special sale events - but are the potential sales worth the cost, lack of transparency and non-disclosure agreement requirements?
Some Canadian sellers recently received email invitations to join the program, along with a general announcement posted in the eBay Canada community forum:
eBay Co-Funded Coupon Program - Seller Participation Notice
eBay Canada facilitates co-funded coupon promotions where the discount cost is shared between eBay and the seller. Participation in these programs requires a formal contractual agreement within the Seller Portal.
Financial Settlement and Invoicing
If you choose to participate in a co-funded promotion, please be advised of the following billing procedure:
- Transaction Value: You will receive the full purchase price from the buyer at the time of the transaction.
- Contribution Invoicing: Your agreed-upon contribution to the discount will be invoiced as a fee.
- Billing Cycle: This fee will appear on your eBay monthly invoice up to 90 days after the promotion concludes. No separate payment is required; it will be processed through your standard eBay billing method.
Enrollment Process
- If you’re eligible you’ll receive an email from caseller@ebay.ca inviting you to the promotion up to 4 weeks in advance. You can also view promotions you’ve been invited to in Seller Portal.
- Follow the instructions in the email and log into Seller Portal
- Under the Contract tab you can view details about the coupon promotion
- Carefully review the contract and related coupon terms and conditions
- Click ‘I agree’ to accept. A PDF copy will be downloaded for your records.
Note: Increasing prices immediately before or during the promotion is prohibited.
If you don’t see an invitation, there is no active offer available for your account at this time. Future promotions may become available.
eBay does tell sellers in this announcement that they will receive the full amount of the sale and be invoiced for their portion of the coupon at a later date.
But what they don't make explicitly clear is that means sellers pay Final Value and Ad Fees on the full non-discounted amount of the sale including item price, shipping and tax, and those fees are not prorated or partially refunded once their portion of the coupon amount is invoiced.
eBay frequently offers these same kinds of co-funded coupon offers to US sellers in key categories like Motors Parts and Accessories and the confusing and unfair application of fees on the full amount has been a top complaint from those who have participated.
Liz Morton
For example, let's say eBay does a 10% sale event, where the seller is responsible for 70% of the discount amount and eBay covers the remaining 30%.
If a buyer purchases a $100 item and applies the code, they will only pay $90 but the seller will receive $100 (plus tax and/or shipping) in their payment account - and the seller will pay the full Final Value Fee for their category and any Promoted Listings ad fees if applicable on that $100 (plus tax and/or shipping).
Since eBay is covering 30% and the seller covers 70%, in this example the seller would then be invoiced at a later date for the $7 that would be their portion of the coupon on that $100 item, but the fees paid remain the same.
Unfortunately, it gets even more complicated than that. When eBay invoices the seller for their portion of the coupon ~90 days later, they bill it as one lump sum with no documentation or reporting showing a line by line break down of how eBay calculated the amount owed.
Since the seller receives the full amount up front, there is also nothing on the individual order or any Seller Hub reports that indicates the buyer used a coupon, so when that lump sum invoice shows up, the seller simply has to take eBay's word for it - there is absolutely zero ability to cross check or verify for yourself how many/which orders used the discount, making it impossible to do even the most basic return on investment (ROI) calculation.
Liz Morton
Not only is this set up an ethically dubious way for eBay to do business with their sellers, it also raises serious questions about the ethics and accuracy of their quarterly financial reporting to investors and the SEC.
eBay defines Gross Merchandise Volume (GMV) as "the total value of all paid transactions between users on our platforms during the applicable period inclusive of shipping fees and taxes."
So how does the way eBay structures discounts and coupons impact the way GMV is counted?
Let's say for example a seller has an item that would normally sell for a total of $100, including shipping and tax.
If that seller simply ran their own 10% off sale using eBay provided markdown tools or if the buyer received a full eBay-funded 10% coupon - the buyer would pay $90, the seller would receive and pay Final Value Fees on $90 and eBay would count $90 for GMV based on that being the total value of the paid transaction.
But with these co-funded coupons, eBay gets to book the entire $100 as GMV while having their portion of the discount accounted for elsewhere - and because of the 90 day delay in invoicing, it could even potentially push that reconciliation out to the next quarter, further obfuscating their financial reporting.
This all comes at a time when eBay continues to struggle with lagging GMV growth, but CEO Jamie Iannone finds himself in a tough spot as he has also claimed to have abandoned "unhealthy tactics" to buy traffic (and GMV) with frequent eBay funded discounts like his predecessor Devin Wenig used in 2018-2019.
Wenig leaned heavily on sitewide 15-20% "flash sales" throughout the year, but those promotions proved to be a double edged sword - once buyers get used to receiving discounts, they'll often wait for a sale before making a purchase, creating "one and done" or only occasional buying patterns.
That strategy was considered such a failure that Iannone felt the need to explicitly distance himself from it when speaking to investors in Q2 2021.
We've discontinued legacy tactics that led to low value, infrequent or one and done buyers. Our buyer base is starting to evolve based on this strategy. These high-volume buyers are growing compared to a year-ago and their spend on eBay is growing even faster. This higher-quality mix of buyers increases value for sellers and will lead to improved health of our ecosystem over the long-term...
..This is something that I laid out last July when we talked about the tech-led reimagination as being focused on turning buyers into lifelong enthusiasts on the platform and moving away from the tactics that we had in 2019 what was really just about the number of active buyers even low value buyers or one and done buyers.
However, despite his criticism of those past tactics, Jamie didn't completely abandon them - he's just finding new and different ways to slice and dice the same rehashed failed strategies.
Liz Morton
And if all of that isn't enough, sellers who wish to take part in the Co-Funded Coupon Program are required to review and sign legally binding contracts in order to participate - part of which includes a non-disclosure agreement preventing them from talking about their experience with the program.
In typical eBay fashion, it appears that Canadian sellers initially invited to join the program experienced problems with the Seller Portal page the announcement directed them to access for more information.
Has anyone participated eBay Co-Funded Coupon Program?
I got the email, but when I follow the link to "Seller Portal" (whatever that is, I've literally never heard of it) I just get this message:
Does this mean I'm not eligible for whatever this new promotion thing is? Did I do something wrong? Is it worth even wasting my time to contact them to try and fix this supposed "authentication error"? I'm so confused as to what this even is lol.
Another seller pointed out that the link to the Seller Portal provided in the announcement points to the US eBay.com site, not the Canadian eBay.ca site.
I think that the coupon was only intended to be used by US sellers. The link sent via the email redirects you to ebay.com instead of ebay.ca. Why can nothing work properly on .ca?
Others said that once you receive the contract to sign it does make it clear it is for Canada and pointed to this troubleshooting guide for those receiving errors:
So the question remains - is it worth it to sellers to pay final value fees on the full pre-discount amount in exchange for (hopefully) additional visibility and sales volume driven by eBay's marketing efforts?
Unfortunately it's difficult to find many real world seller discussions about how these co-funded coupons perform due to the NDA requirement, but let us know in the comments below if you'd sign up for this kind of deal if it were offered for your business!
