Letter: eBay Charity Program - Net vs Gross Proceeds
For the past several years, I have taken part in the eBay for Charity program by donating a percentage of certain listings to various non-profits. When I opt a listing into the program, a message appears on the active listing that says something like, “40% of the sale of this item will benefit Marine Toys for Tots Foundation.” This encourages buyers to purchase, and also saves me a bit in fees, since the variable portion of the final value fee is discounted by the percentage donated.
I generally do not donate 100% of the price to charity, but on one recent listing, I decided to do so. I expected the message on the listing to say, “100% of the sale of this item will benefit American Cancer Society.” However, it seems that the wording is completely reconfigured when you're donating 100%. It incorrectly states, “All net proceeds will support American Cancer Society.”
Net proceeds? That's not the way the program works. Net would mean my expenses are deducted before the 100% donation is calculated. But in reality, a donation of 100% means that I will be billed for the total selling price of the item. Any fees or other expenses I need to cover out of my own pocket. What is really being donated is 100% of the gross proceeds, not the net proceeds.
I contacted eBay through their official Twitter page to explain the issue. I stated that buyers thinking that only the net proceeds would go to charity would almost definitely assume that the actual amount donated would be less (possibly considerably less) than the item price, thus they would not be encouraged to buy to the extent that I feel they should.
The first representative who replied explained that “net proceeds” means the amount after fees, and that's what's sent to my bank. Sent to my bank?! This rep clearly didn't read my message, so I restated it. I heard back from another rep who was only slightly more lucid. He claimed that in my case, net and gross was the same, but that eBay uses the word “net” for cases when a seller has to pay fees.
But that's not correct. Even in this case, I would need to pay fees. Yes, 100% of the variable potion of the fee would be credited, but I would still owe the flat $0.30 fee, and the amount I would be invoiced to donate would not be reduced by that $0.30 fee, nor by any of the potential other fees the rep mentioned (bold, subtitle, etc.). I tried to explain this to him, and did not hear back for over 24 hours.
At that time, I asked if someone could respond, and I heard from a third rep, no more sensible than the first two. She sent me a link to the eBay for Charity terms and conditions, all of which I have closely read previously, and none of which addresses the issue at hand. When she sent me that link, she also quoted some terms: “you agree to[...]pay all applicable fees[...]” I pointed out that the terms do not address my question, and also added that she herself said that I, as the seller, need to pay the fees - meaning they are not deducted off the donation amount. So, as I've been saying, it's the gross proceeds, not the net proceeds. She replied by insisting that everything is in the terms. She then said what the earlier rep had said, that the donation would be 100% of what's left after fees are taken. Again, I told her that's not how it worked.
I sent her three screen captures of a recent charity sale I had made. The first showed the item price, and that 10% was going to charity. The second showed a breakdown of the fees. The third showed the amount I was invoiced for the donation. The invoice amount was 10% of the item price (gross proceeds), not 10% of the amount I made after fees (net proceeds).
She then completely changed her story. Now, “net proceeds” did not mean the amount after fees, but rather the amount after taxes. She said that the “gross amount” included taxes. But she changed the terminology! The phrase in question is “gross proceeds,” not “gross amount.” Proceeds (whether net or gross) do not include taxes. When I pointed that out, I suppose she couldn't think of any additional contradictory story, so she flat-out refused to communicate further about the issue.
As a last resort, I requested a call from eBay. I asked the same question I had asked previously, and was put on hold, supposedly so the rep could check on the issue and report back. However, when I next heard a human voice, it was a different person who had no knowledge of what the issue was. I explained what happened with being transferred without explanation, and also re-explained the question at hand. She said she would need to transfer me as well, to which I obviously voiced frustration. She said she would get the other rep on the line and explain the issue so I wouldn't need to go through it again. However, when the next rep came on, they had no clue what the issue was. He also said he would need to transfer me. This happened several times, with no one even making an attempt to address the problem.
I ended up filing a complaint with the Better Business Bureau, as I cannot get an answer from anyone at eBay that actually fits with reality. A buyer who sees that all “net proceeds” are going to be donated has no way to know what the expenses are (as they could, at least in theory, be including expenses besides eBay fees), so they might expect a lot less is being donated.
When I am donating more money than what I actually receive as payment, I expect the terminology to be accurate. This is unacceptable, but from eBay, not surprising.
~ Troy at Less Than Three Records
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