Ordered to repay overcharged postage by the courts

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Overcharging on postage has in the past been pretty much the norm on eBay for many sellers, which is one of the reasons that eBay are starting to introduce compulsory free post in some categories. It’s not something that’s normally illegal though, but a Flintshire man who made twice as much on postage as on selling counterfeit products has had postage profit included in a proceeds of crime repayment.

Selling counterfeit dart flights with football club logos, the court has assessed his profits at £3,100.00 for the flights and £7,500.00 from inflated postage and ordered him to repay £9,020.00 or face six months in jail.

This is the first time I’ve seen a case where profit from unreasonably high postage costs was taken into account. It’s hard to hide on eBay though, everything is recorded for the world to see and the courts are no exception.

The only thing I don’t understand is how he got away with overcharging on postage for so long without his feedback suffering. This case is unusual as it involved counterfeit product, but it does go to show just why there is so much resistance to eBay enforcing free postage. For many sellers making double the profit from postage, compared to the profit on the product, is just too much to ignore.

27 Responses

  1. “The only thing I don’t understand is how he got away with overcharging on postage for so long without his feedback suffering”
    Obviously his customers either weren’t really bothered about being ripped off over p&p or believed the combined total price was fair.

  2. In the first place, all postage prices are clearly and visibly available the moment you click to view an item page. It is not like he added hidden charges without telling the customer.

    also, RT @Bunchy “believed the combined total price was fair.”
    if the customer, having already reviewed the prices and the item advertised for sale, commits to bid / buy the item, then it is ultimately the customer’s choice. Nobody forced the customer to bid on the listing.
    you cannot simply bid on something, wait for 10 days, win it and then argue / debate with the seller that you’re not happy with the price.
    it’s unfair and not right.

    this applies to all items whether counterfiet or not.

    i think this has more to do with the fact that it is CRIMINAL to sell coutnerfiet goods, and the court has every right to reclaim back everything that he earned from this. i dont think its just simply a matter of “inflated” postage price.

    how is postage price defined anyway? postage price isn’t just the price of a stamp, like most people would like to believe. what about packaging? what about time, effort and manpower? what about quality control checks and tracking services and after sales support? these things aren’t free.

  3. as per 2

    it is not related to overcharging but the criminal act in its self

    under the proceeds of crime act all monies due from such activity is recoverable.

  4. how is postage price defined anyway?

    Stamp and packaging definitely

    Time/effort/manpower – well that’s paid for out of salaries which is out of general profits regardless where those profits come from. Bricks and mortar stores still have to pay for warehouse/shelfstackers/checkout assistants and we online people have to pay for pickers/packers/posters.

    Quality control checks/tracking services – well that comes from your customer service budget, again paid for from general profits regardless where those profits come from.

    After sales support – I don’t know how anyone could justify this as “postage and packing costs”. Quite simply if you sell something you need to provide after sales support appropriate to the product. How you get the product to the customer (retail shop, post, customer collection) has absolutely nothing to do with after sales support so that comes from the product sale price.

  5. A lot of it depends upon the custoemr expectation – if every other legitimate product is being sold with the same P&P, then the buyer will expect the same from this seller.

    When I was selling DVD’s I experimented with different P&P rates (them were the days!!) and I found that there was no difference in volume or value of sales nor any significant difference in star ratings between £1p&p, and £2.75p&p – beyond this, I noticed sales dropping slightly, but star rating was still showing as 4.8.

    There was absolutely no incentive to charge cheap postage when the marketplace was perfectly happy to pay double the actual cost.

  6. @chris hence, where does general profits come from? profit from product sales include profit from postage.

    i’m not saying that it is okay to charge say, £25 to post 1 jumper when in reality it only costs like probably £3.00 max.

    profits need to be generated from every aspect, and from every service we provide.from the product, right down to delivery. and this can be done fairly and lawfully.

    Say the price of a stamp is £0.94 and the cost of an envelope is £0.06. As small sellers we cannot be expected to charge just £1 for postage & packaging. Maybe £2.50 would be enough.Occassionally we offer free shipping but there is no impact on our DSRs from when we charge £2.50 to when it is FREE.
    if the customer is willing to pay and wants to pay, why stop them? They have a choice to buy, eBay is a marketplace afterall. If they dont like the prices from Shop A they can always go to ShopB for a better bargain. isn’t that what competition is about? if the total cost of postage+the product seems fair to them: for example: £9.99 for a dress WITH postage, who are we to deny them that choice?

    this post is not about an ebay seller being “ordered to repay overcharged postage”. this post is about selling counterfiet items on ebay. if one gets caught doing it, then all the amount of money made from that can and will be recovered.

  7. #5 I agree totally, i used to charge 78p postage on dvds (ie the actual price) and my competitors charging 2 quid plus (hi dr steve) got better sales.

    Now with free postage its better for the consumer, and better for me (but worse for drsteve)

  8. Your point is no different from phone companies subsidising mobile phones by heaping on charges to the contract.

    Certainly not right but it’s the customer who’s taken in by the headline price over total cost of ownership that’s the fool.


  9. depends on how you look at it I guess

    if the actual cost of P&P is £1 and you charge £2, you charging the customer £1 for nothing

    Last time I checked taking money and providing no product or service was illegal.

    And just to put the cat amongst the pidgeons..anyone selling anything up to 1.5m long and under 20kg should be forced to give free postage.

  10. #9…? I think that post makes very little sense, not the normal informed opinions you usually have.

  11. if the actual cost of P&P is £1 and you charge £2, you charging the customer £1 for nothing

    Not exactly. You are charging for the act of shipping the item. Is it only legal for Royal Mail, et al. to turn a profit when moving a product from one location to another?

  12. #10 it makes perfect sense to me, if everything listed on ebay that was not really large or heavy had to be listed with free P&P it would soon sort the wheat from the chaff.

    #11 In your land P&P is called Shipping and Handling so I am going to dismiss your argument out of hand.

  13. This is all quite poor!

    We all do different things and the price is the price and the deal is the deal?

    You can by 1 item from me on eBay and pay £1 shipping and handing. You can buy 100 items from me on eBay and the shipping and handling is still £1.

    But you will never buy from me on eBay if shipping and handling is £1 for each item.

    Because I will not be on eBay!

  14. What about ebay and paypal fees where do they expect you to get the fees from or maybe you guys get your goods for free.
    You buy an item and put it up for sale it sells fine ebay collect there fees and paypal comes collect there own fees what is left no profit you are back to square one you are the one that will be out of money not ebay.
    Ebay should stop interfering with trade.
    Are they the owner of the goods

  15. @ # 14

    eBay and most serious business people I’ve spoken to say the fees are supposed to be built into your price. I never fully understood how you are supposed to do that with an auction though.

  16. #12 hmmm, still makes no sense. Shipping, handling or postage. The names makes no difference, it is what it is…a charge to get the goods from my door to yours.

    I along with every other business can charge anything we want. Most TV shopping channels charge upwards of £5.95 regardless of what is being bought.

    It is generally accepted within mail order that the delivery charge is to cover the admin of processing the order rather than the actual delivery itself.

    At the end of the day, delivery is a business expense, the wages for the guy that packs the order are an expense, the envelopes are an expense etc. How you choose to offset those expenses is up to each individual.

    As is where buyers choose to buy and at what price.

  17. #15 Most serious business people have a pretty good idea what price range an item will fetch before they put it on auction. Professional sellers that use the auction format don’t do it to give all their items away at 99p 😀

  18. @16and @14 totally agree. if any seller is charging the actual cost of postage and is happy with that – then fine, good on that.
    we have always mantained that postage is not just a matter of putting 1 item in one cheap envelope. we’re not small time amatuer bedroom sellers here. we have staff, rent, wages, bills, fees this and that to pay.

    at the end of the day, ebay gets their fees no matter how much the sold price is, we’re forced to use paypal and paypal take a cut and what are we left with?

    @board_surfer should stop being too righteous.
    “Last time I checked taking money and providing no product or service was illegal.” postage is a service, packing and picking the item is a service, the envelopes, stamps et al are products. we’re in the world of business here, so you should grow up. if you buy, say, a dress from your supplier for £4 – are you going to sell it to your customer for £4 as well?
    if you sell it for £5 will you be charging that £1 extra “for nothing” as you so put it? will that £1 then be illegal?
    THINK, man, Think.

  19. @steve “There was absolutely no incentive to charge cheap postage when the marketplace was perfectly happy to pay double the actual cost.”
    Totally for it.

    Most e-commerce shops charge a flat rate of £4.75 for standard post
    Some offer 4-5days FREE delivery (but on 2nd class post)
    And some offer £2.50 1st class post and shipped same day

    some have all these options open and allow the customer to choose which delivery timeframe they think is suitable for their own needs.
    and i am all for it.
    along with the product, we provide excellent custoemr service as we have been doing for the last 6 years or so, our feedback is way higher than any of those so called “branded shops” that ebay wants to advertise on the front page, and our customers keep coming back for more
    the whole point of having a marketplace is to give consumers choice, options, right to decide. we cant keep retstricting sellers on what prices we want to charge, what we can or cannot sell. i dont see nay harm in choice as long as the products offered are legitimate, th prices are not extortinate and everyone’s happy.

    professional sellers would be wise to open up their own websites and sell there. after all, we get less headaches from “non-receipt” buyers, and we get buyers who genuienly want to buy. we sell more full priced items and therefore can actually afford to offer FREE postage.

    the problem with eBay is that it is difficult to provide FREE postage. there is just no incentive at all

  20. In my opinion uniform costs for postage and an option for free delivery across the site will be of benefit for the eBay marketplace as a whole.

    @Trent It’s fairly simple you up your sales prices to absorb all costs involved in postage. In my experience offering free postage increases profits + customer satisfaction.

  21. The biggest problem I see with “free post” is that is has to be the first option offered. It therefore will be the cheapest, slowest, worst service possible with premium services as an optional upgrade.

    Quite frankly if that’s what most buyers will experience will be the worst possible service. Nearest competitor – Amazon – upsells customers with Prime pushing them towards a premium next day service. eBay downsells it’s customers by pushing sellers and by default buyers to the crappiest service possible.

    Sure a few buyers might upgrade to premium services. A few sellers might try to compete with premium services as the free service, but all things being equal offering a 24hour tracked service and competing with another seller offering “standard parcels untracked and you’ll be lucky to receive your parcel by the middle of next week” will result in a price differential.

    If you want to compete you’ll start offering really poor delivery options to save money and price match competitors. Before a £10 product with £8 delivery stood out compared to an identical £10 product with £3.50 delivery – buyers could instantly understand the price difference. Now you have an £18 product compared to an identical £13.50 product with no easy way to tell you’ll get one tomorrow and one towards the end of next week.

    There is no way to call out a premium delivery service in search results so all things being equal the buyer will naturally tend to chose the cheaper product which will be the crap service and in a never ending cycle eBay will them promote those products with the worst (cheapest) delivery options higher and higher in search results due to recent sales.

    If eBay aren’t careful they’ll find that with free post they’ve built a mechanism designed to drag the entire marketplace down to the crappiest service levels possible and that ain’t gonna attract new buyers or keep existing buyers happy.

    “First is worst” is a really poor strategy. If eBay would allow a premium charged option to be presented first with the worst option being free but buyers had to manually select the a crap service it would in my opinion be much better

  22. #21 My free postage items are sent 1st Class and this is shown on the listing (thank god for Royal Mail).

  23. Jimbo – add on an the extra Signed for label and you start to see why premium services bring significantly more cost. Or send 2nd class and save some pennies. You’re picked a midrange service suitable for light items. The price differences are much worse for large or heavy (over 5kg) items.

    Also buyers can only see that you offer a 1st class delivery option by clicking into your listing. There’s no way to differentiate it from say 2nd class or even services such as UK Mail.

  24. When you are offering free postage can i ask what kind of goods are you selling on ebay.
    What about people selling heavy items do you expect them to offer free postage as well.
    You people fail to understand let me explain you sell an item that weights 1kg do you offer free postage.
    When you put an item for sale on ebay even if it does not sell they still collect there money nobody compalins.
    Your item sells they take money from you and the buyer pays by paypal and paypal takes there own share you the seller do not complain.
    What is left after you have sent the item you are already in minus so what is the point.
    Is it not criminal what ebay is doing with paypal forcing people to accept there own method of payment.
    Our choice has been taking away.
    They bring in draconian laws and we cannot talk.
    They increase there fees we cannot talk and when you try to make a little they clamp down you faster than you think.
    Who is monitoring Ebay and paypal nobody
    They are milking the people selling on there site.
    No justice.
    Except you are happy making £1 as profit for the effort and sweat you have put in then that is fine.

  25. Any idiot should be able to see it is ebay trying to squeeze a bit more out of it. I sell old computer games – I charge £2 rec del – I know it’s been delivered as it’s signed for It costs usually £1.65 ish + a jiffy bag. Ebay doesn’t make a profit from this figure and people often bid close to the shop price minus the postage. If ebay adds this on to the sum they take a cut of then they make more money. I on the other hand won’t be using the most expensive postage method as I will simply be paying more for the priviledge so people won’t get insurance cover for the item and there’s no proof if it’s been delivered too. I really wish there was an alternative to ebay.



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