eBay payments Low Cost Items Promotion (‘Micropayments’)

By Chris Dawson August 11, 2020 - 11:24 am

eBay payments are running a Low Cost Items promotion in the UK, somewhat reminiscent of PayPal Micropayments> Kicking in this August and running right through the Christmas period, it offers 15% fees but crucially a 5p fixed fee for each transaction.

This promotion is something we were promised would be coming down the line when we did a Q&A on eBay payments with eBay Vice President Murray Lambell early in July:

“At the moment, there’s no separate pricing for low priced items. Our pricing structure is optimised to work for many categories & price points including low price inventory. In specific cases there may be an opportunity to do even better. We’re looking at a number of promotional tests in these instances. We still require sellers to register for payments to take part in these opportunities.”
– eBay Vice President Murray Lambell (6th July 2020)

The Low Cost Items promotion runs for transactions taking place via managed payments between the 24th of August 2020 and the 23rd of February 2021. To take part eBay Business sellers must have registered for eBay managed payments on the Site by the 10th of August 2020 and been invited to participate. Sellers invited to participate in the Promotion and who receive the promotional email, will be selected on a random basis from the group of sellers meeting the criteria. For sellers who have not registered for managed payments, opted-in to the promotion, or do not get activated for managed payments by the start of the Promotion Period, the Standard FVF applies.

This represents a critical acknowledgement by eBay that a ton of low cost items aren’t financially viable to sell on eBay when you’re paying a fixed fee of 30p for each transaction. Products as varied as post cards, USB sticks, balloons, stamps, craft supplies, birthday cards, ribbons, screws and plant seeds selling for just a couple of quid don’t have the margin for such a high overhead.

A word of warning for sellers who are invited and choose to opt in, the promotional 15% FVF plus 5p fixed charge will apply to ALL transactions during the promotional period. We know that many sellers will in the past have had two PayPal accounts (one normal and another micropayments) and simply entered the appropriate email address according to the item value when listing. With the eBay payments Low Cost Items promotion you won’t be able to segment sales in this manner and the only way around it will be to operate two eBay accounts. If your account is invited to the Low Cost Items promotion accept and use this account for low value items and use a second eBay Business account for products which sell for higher values paying the regular fee schedule.

As a temporary promotion offered to sellers selected at random and a fee scheduled applied to all products, this offering won’t appeal or even be available to everyone. However it’s a step in the right direction with eBay acknowledging that the 30p fixed transaction charge is a killer for many eBay businesses.

Full details of the promotion for those invited are available on eBay.

  • JoeB
    1 year ago

    I’ve done some maths and I’d be better off with this pricing as I’m currently on PayPal micropayments and sell in some some categories that are 13%.

    Sadly I’m not invited and I can’t take advantage of it, even though I was bullied into signing up for managed payments with the threat of listing restrictions and I fit the criteria.

    It seems vastly unfair that sellers are invited at random, giving them an advantage over sellers who want to take advantage of the offer but can’t.

    As it stands I will have to raise my prices by an average of 30p. If I could get this offer I would have to raise them by 10p instead.

    I’m really disappointed in eBay for this.

    • NorthCrystal
      1 year ago

      Seems very unfair this promotion.

      It will “take off” (read: kill) many sellers on eBay, in the long run.

      2 sellers selling same item. 1 seller got this “promotion” and can offer lower prices. The 2 seller needs to lower price to stay competitive (read: to still sell something), but that means selling with less profit (or a loss). What a bargain.

  • Mark
    1 year ago

    I presume these fees are plus VAT, so for non-VAT registered sellers it is 18% + 6p.

    I haven’t done the very hard maths but it doesn’t seem to be as good a deal as the Paypal micropayments scheme. Doing quick maths, I’d guess approximately £4.50 is the cut-off point for any benefit, while for Paypal it was about £10.

    • AnneB
      1 year ago

      Yes Mark – you are correct. I contacted them about this and, as you say, it works out at 18% +6p for non-VAT reg sellers.
      We currently pay 12.9% (plus VAT) so 15% in total plus 30p (36p)
      I worked out that if you are VAT registered and the vast majority of your sales are under £10 then you should be better off
      We were invited as we do sell a lot of low value items – however we do have a number of sales in the £15/£20 bracket so when I did a quick check over the past 30 days the savings on fees were only about £1.00 !!
      IT’s a typical ebay offer – where there is always a hidden cost. In this case advertising it without the VAT element showing clearly (though it is in the T&Cs)

    • AnneB
      1 year ago

      PS to above – “better off” at under £10 if you are on the 12.9% fee currently . Andy mentions he is on 6.9% so his threshold for saving is items less than £3.

  • Andy
    1 year ago

    Am I way out on my maths here?
    I sell in a category that under managed payments will have a final value fee of 6.9% + 30p, with the “promotion” only items I sell below £3 including shipping will be a saving.

    £3 sale without promo will have a final value fee of £0.51
    £3 sale with promo will have a final value fee of £0.50

    • AnneB
      1 year ago

      Andy – your Maths are exactly right

  • lee JOHN
    1 year ago

    I think ebay have done a back peddle, as too few signed up or left completely, most of us wont be coming back no need, other platforms with less greed and less hoops to jump through

  • 1 year ago

    Why not just fix the micropayments problem properly?

    And the registration for partnerships still isn’t fixed

    Damaged payments is a fiasco

  • 1 year ago

    What Murray Lambell really means:

    “At the moment, there’s no separate pricing for low priced items”

    Translation – we thought we could get away with ripping all sellers off with our hidden fee hikes in Damaged Payments

    “Our pricing structure is optimised to work for many categories & price points including low price inventory”

    Translation – We maxed out what we thought we could take off sellers and pre-announced the big $$$$$ bucks we’d suck in to the stock markets, irrespective of the impact on sellers.

    “In specific cases there may be an opportunity to do even better.”

    Translation – we were so hellbent on pushing this through we didn’t even consider this. Why would we? This is all about shareholder value. Doh!

    “We’re looking at a number of promotional tests in these instances.”

    Translation – holy crap, loads of sellers of smaller items are jumping ship. Shareholders won’t get the full payout we promised. Let’s offer some short term sticking plaster until the hullaballoo dies down.

    “We still require sellers to register for payments to take part in these opportunities.”

    Translation – You b*stards will still have to sign up. We will get you in the end and make you pay for defying us! My exec bonus depends on it !!! I might have to sell my fifth home or just have four Florida vacations this year.

  • Jonah
    1 year ago

    Ebay managed payments, what an utter shambolic mess, another in the long line of ill thought out and badly implemented ideas that stretch back decades. The platform is a farce.

  • 1 year ago

    Andy (above) is absolutely right. Why not just fix the micropayments problem properly?

    The second that I am forced onto eBay payments, I have to move more than half my inventory of 20000 items to other platforms as they will no longer be viable on eBay.

  • 1 year ago

    So let me get this right, this promotion is an either/or thing.

    If we get the invitation and decide to take them up, we’ll have to drop all our mid to high priced items as the fees will force them into being overpriced (or we’ll have to sell them at a much lower margin, bearing in mind margins are already thin as eBay is a race to the bottom on prices).

    If we don’t take the offer, or don’t get it, all our lower priced items will look overpriced compared to the competition, so we’ll need to drop those.

    So either way, eBay will lose a significant chunk of revenue from us as we trim out listings that can’t compete or are over-charged for, and most likely save some extra money by dropping down a shop category.

    Generally I prefer eBay to Amazon, but Managed payments appears spectacularly poorly thought out, and this just reinforces the strategy I’ve adopted that it’s better to focus on growing our website and let the % of sales through marketplaces gradually diminish.

  • Toby
    1 year ago

    As others have said, the whole thing has been a complete shambles. For all the research they claim to do, it seems that they once agaion managed to miss out on the majority of smaller sellers. they are so keen on the big volume sellers who just say yes to anything, that they are STILL missing the reason for the decline in ebay… The smaller sellers that have always driven it.
    The together we are…… ads are just a kick in the teeth. How long before all these new companies forced by the lock down to jump on board, will see the truth behind ebay and kiss it goodbye?
    We had a nightmare getting registered for payments. Ebay refused to accept my bank details as the statement showed my name rather than business name, despite being a business bank account account and my name being that which my ebay account is registered with… So the bank provided a statement showing my name and ‘Trading as……’ on it so ebay could see the link. Still not good enough! in the end i said i couldn’t do anymore as it was clear enough for the tax man, paypal, mortgage, other market places etc…. but not for ebay! In the end they accepted it. Yet for another month it kept telling me they were waiting to confirm it! Then they tell me it starts on the 10th… and nothing. Now they tell me the 14th….
    SHAMBLES SHAMBLES SHAMBLES…. oh well atleast they have changed the way you leave feedback. I had no idea it was broken, no so important…. oh it wasn’t and nobody cares about it anyway!
    Just one more year…. one more year, and we complete our move away from ebay completely after 12 years. Something i see alot of on the ebay forums, so we are not alone. Perhaps we should measure their success by the amount of sellers moving away in despair rather than jumping for joy just because they half tweeked something they botched up in the first place?!

  • 1 year ago

    Listen up, Ebay, if you read these pages.

    I will say this very slowly for you.


    [Drumroll please]

    Simply charge a reduced 15p handling fee for items at £4.99 and below.


    • Mark
      1 year ago

      Good idea but that’s too much common sense for eBay and too easy a solution. Where can they hide the hidden fees for the shareholders? 🙂

  • Ian Turner
    1 year ago

    I have ignored this promotion as my items vary in price from 99p to well over £100. With PP it was great as I could have the two different fee structures co-existing. I still lost out occasionally when people purchased a high quantity of low value items but that is a fair price to pay for the extra sales. This attempt by ebay to resolve issues for the micro sellers is just a mashup.

    Why couldn’t they do a simple if your sale price is under X you will pay 5%+5p and if over X it will be 10% +30p, or whatever figures they decide?

  • Paul
    1 year ago

    I am desperate to take part in this offer but I haven’t had an invite yet. Has everyone already been sent their invites? All my items are low value items and the new fee structure will kill my business completely. I think this is criminally unfair that they’ve selected accounts at random!

    • Ian Turner
      1 year ago

      Are you registered as a business account on both ebay and pp?

  • Paul
    1 year ago

    Yes Ian, i have been for over 3 years, TRS and have pp micropayments enabled on all listings currently.

    • Ian Turner
      1 year ago

      Amazing how you haven’t received the offer then. I have decided to ignore it because of the range of products I sell.

  • Chi
    1 year ago

    We’re not received the offer too, but then we’ve so far declined to register for MP, so maybe that’s why we’re not been offered it. Seems odd, as you would think it would be targeted to those that have not registered due to the high MP charges compared to PayPal MicroPayments.

    However, with the offer, it does make it Managed Payments with the LCIP offer fee comparable with MicroPayments (we’re VAT registered) – for Office categories (11.9%)

    However, given there is no way of applying the offer and the standard MP to different listing, then it doesn’t work anyway.

    It’d be like us today deciding to apply Micropayment to the whole of our eBay listings < £10 and high value ones. We wouldn't do that, as it would not make sense – and suggesting the same for eBay Managed Payments LCIP or not similarly would not make sense either!

  • Jonah
    1 year ago

    The MP fiasco points loud and clear to the fact that EBay haven’t a clue as to what they are doing. No expertise, no attention to detail and above all no duty of care to their platform users. How can you realistically offer one set of sellers a deal and then completely ignore the rest?
    An utter shambles and shameful treatment of a core section of the community, many of whom will have been with eBay for years, some possibly fron the outset.

  • Victor
    1 year ago

    Those of us that have used ebay from the outset
    Know ebay introduce new programs and systems unfinished
    Using sellers to iron out the glitches and errors
    Its ebays normal like it or lump it ethos

  • Paul
    1 year ago

    I just spoke with a customer service rep who informed me that I haven’t had the email as I’m only pre-registered for managed payments (gets activated next week) and the invite only goes out to people already active on MP. Can anyone confirm this?

    • Mark
      1 year ago

      I’m on MP since 24th July and I’ve not had the offer!

    • NorthCrystal
      1 year ago

      It’s exclusive offer.

      If all sellers were to get it then what’s the point of it being an promotion?!

      This is a bit of discrimination from E.

    • Chi
      1 year ago

      That’s what others on eBay forums have said – and it’s “selected” as well, so even if you were registered and active, you may not have had the offer.

      It’s funny though, seems like it would have been an offer that would have been targeted to those on Micropayments and refusing to register for MP (like me).

      However, beware though, there is a (potential) sting in the tail. If you are on the 15%+5p LCIP offer – it applies to EVERYTHING. So if like me, you have both low and high value – you need to assess whether it makes sense to apply anyway.

      We sell in mainly in Office category, and it still makes sense to stick to the PayPal (MicroP + standard) and apply what is the sensible fee rate.

      On LCIP as well for Office, it will be more expensive on LCIP compared to MP at £8:

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