Mercari Shifts Fees From Sellers To Buyers, Adds 3 Day Returns For Any Reason

Mercari is shaking up their fee structure, dropping selling fees while passing payment processing and service fees on to buyers but there's a catch - buyers will now be able to return items within 3 days of delivery for any reason!

What's Changing?

Sellers will see 0% fees for new listings created after 8:30 AM ET March 27, 2024, however they will now be paying a $2 fee for each direct deposit withdrawal.

Once the change goes into effect, buyers will be charged $0.50 plus 2.9% of the transaction price for payment processing PLUS an additional service fee at checkout.

The buyer service fee will vary based on factors such as brand, item category, and transaction specifics, and is expected to be as low as 5%, according to a Mercari spokesperson.

Both the payment processing fee and service fee will be charged to buyers at the time of their purchase, which could potentially increase abandoned carts or cancellations if buyers balk at seeing extra costs added at checkout.

For Sellers:

• 0% selling fee for new listings created after 8:30 AM AM ET on March 27, 2024
• Listings created before 8:30 AM ET on March 27, 2024 will be subject to the previous fee structure, but Mercari will be gradually updating existing listings to transition them to the new fee structure over the next several weeks.
• A $2 non-refundable fee will be charged for each direct deposit request

For Buyers:

• Mercari will charge buyers a payment processing fee of $0.50 plus 2.9% of the transaction price (including item price, shipping, service fee and sales tax) at time of purchase
• The payment processing fee is not applied if the buyer uses their Mercari balance or credit
• Mercari will charge a buyer service fee that varies based factors like brand, item category, and transaction specifics - expected to start "as low as" 5% but may be higher for some items.

While 0% selling fees may sound great, sellers are not completely off the hook.

In order to make the idea of paying service fees go down smoother with buyers, Mercari is also changing their return policy to allow buyers to return any item within 3 days for any reason.

“At Mercari, we remain committed to making secondhand selling as easy and rewarding as possible,” said John Lagerling, CEO of Mercari U.S. “With the removal of selling fees across our platform, we’re setting the new standard for peer-to-peer marketplaces and incentivizing even more sellers to choose Mercari. With zero selling fees, Mercari sellers can price their items more competitively and keep their earnings, making it the best choice for everyone looking to sell their unused items.”

In addition to zero selling fees, Mercari is simplifying the buying experience with an all-new returns policy. As part of this policy shift, buyers will be charged a service fee allowing for hassle-free returns.

For the first time ever, Mercari shoppers can now initiate a return within three days for any reason with the assurance of a refund, less applicable fees. This new policy applies to all items across the platform including games and toys, collectibles, trading cards, rare vintage finds, fashion, home goods, beauty, and even authenticated luxury goods.

Previously, buyers could only return items that were "not as described" but now, they can return for any reason, leaving many sellers worried the marketplace will become a "free 3 day rental" platform.

As one reddit commenter said: "Awesome, a free clothing rental service! Time to start wearing stuff I can't afford for just the cost of shipping!"

Another redditor also commented: "Even if Mercari is covering the shipping costs or the buyer is, I'm not wasting my time reselling things because someone found a better price by the time an item arrived."

"With zero selling fees, Mercari sellers can price their items more competitively and keep their earnings" - I hate to break it to John Lagerling, but this may not work out as well as he thinks since many sellers will likely keep at least some of the previous fee margin baked in to their prices in order to account for the time, hassle and possible expenses of dealing with increased returns.

But even if sellers do lower their fees, will buyers balk when presented with additional fees at checkout?

Here's what the actual buyer experience with the new fee structure looks like:

Item Page

Add To Cart

Buy Now (highlighting added for illustration purposes)

Buyers may be expecting the shipping and tax, but an additional $30.86 added at checkout? How many are going to click on the info bubbles next to the service and processing fees or do any additional research to learn about the supposed benefits of the new return process versus simply abandoning cart at this point?

Sometimes perception matters more than reality and consumers can be fickle. For example, many buyers logically know there isn't really any difference between a $20 item with $5 shipping and a $25 with free shipping, but "free" shipping still holds a psychological appeal.

Similarly, even if sellers lower item prices and the total overall would be competitive across similar items on other marketplaces, will buyers be turned off by this experience?

Odds are the answer to that question is yes - especially if there appears to be no rhyme or reason to how the variable fee is calculated, like this example where 3 listings that were the same brand and item type all showed different percentages being applied.

Placing a $2 fee on direct deposits is clearly meant to try to incentivize users to keep their funds in their Mercari balance to use for future purchases (which would then be exempt from the payment processing fee as a buyer.)

That type of circular economy flywheel would of course be very valuable for the marketplace, but the move could backfire if sellers decide to take their items to other marketplaces that offer greater payout flexibility without additional costs.

More info about the new fees and return policy can be found in Mercari's help pages.

While this new fee structure makes Mercari somewhat unique amongst US marketplaces, competitors are testing similar ideas in other regions, all with the goal of taking a greater slice of the consumer to consumer resale market.

Etsy-owned Depop recently announced they are dropping the 10% commission fee in the UK with sellers still charged payment processing fees and buyers charged a service fee of "up to" 5%.

Depop Drops Selling Fee In UK, Shifts Burden To Buyers Directly Via Marketplace Fee Instead

Etsy-owned Depop drops selling fees in UK, shifting partial cost burden to buyers through “up to” 5% Marketplace Fee instead.

Value Added ResourceLiz Morton

eBay also recently began testing fee free selling for private (non-business) sellers in the UK, mirroring changes they made in the German market last year.

eBay Tests Fee Free Selling For Private UK Sellers With Special Promo

eBay UK tests zero listing & selling fees through April for private sellers in special invite only promotion.

Value Added ResourceLiz Morton

Notably, while eBay's initiatives so far have been limited to only private/non-business sellers, they have not come along with shifting the fee burden to buyers - yet.

Fee-free selling for private or consumer-sellers has been very successful for eBay in the German market and eBay is currently in the midst of a strategy pivot back to a broader consumer-seller focus as CEO Jamie Iannone touts C2C success to investors and Chief Business Strategy Officer Stefanie Jay is confirmed to have departed the company in January.

Will Mercari's fee structure shakeup help them take crucial C2C market share from competitors or will the forced returns, direct deposit fees and added costs at checkout have sellers and buyers looking elsewhere?

Let us know what you think in the comments below!