High-end antiques and vintage shopping site Ruby Lane is instituting a new fee that buyers will have to pay above and beyond the product price, sales tax, and shipping cost. One seller called the new buyer service fee of 2.95% “outrageous” and “unheard of”; another said they were worried the new fee would upset buyers and have a negative impact on sales.
Ruby Lane is also raising selling fees and is instituting a new seller service fee of 3.75% of the item totals and shipping and handling.
The new buyer service fee went into effect on November 14th, and the selling fee increases take effect on January 1, 2020.
A seller forwarded the following notification they received from Ruby Lane:
Dear Shop Owner,
Early last month we informed you about new laws that are requiring Ruby Lane to collect and remit state sales tax on behalf of our sellers.
We now are fully integrated with our third-party tax compliance company Avalara and ready to begin collecting state Sales Tax on your behalf in those states where we have an obligation to do so.
Sales Tax and Service Fee starting Thursday, November 14th
Beginning on Thursday, November 14th, 2019 Ruby Lane is going to add the required by law state sales/use tax to all purchase orders based on the buyer’s shipping address. A list of states where we are handling sales tax for you is maintained in our FAQ.
In addition, to help offset some of the cost of collecting, reporting, managing and remitting sales tax to 37 states we are currently required to collect sales tax for, buyers are going to be charged a 2.95% Service Fee, rounded up to the nearest 25 cents, at the time of purchase. We know the concept of charging buyers a service fee for marketplaces such as ours is relatively new, but this is a common practice in the auction world with Buyer Premiums, and in many other online spaces applying a service fee.
Collecting Sales Tax and Service Fees from You
For all orders, the Sales Tax and Service Fee is going to be remitted to you as a part of the buyer’s payment, for any way you accept payment. Ruby Lane then deducts the same Sales Tax and Service Fee amounts, plus starting January 1, 2020 the new seller Service Fee (see below), from your Ruby Lane account when your order is finalized. Ruby Lane then uses that money to pay the state sales/use taxes on your behalf.
As purchase orders are finalized and sales tax & fees are deducted from your shop account for amounts already paid to you by your buyer, it may cause your shop account to go negative. Shop owners are strongly encouraged to fund their shops accordingly.
Change to Seller Charges and Fees starting January 1, 2020
Along with the changes above, we are changing the fee structure for all shops.
We are providing 6 weeks notice of this fee increase, effective January 1, 2020, to help shops with their holiday sales.
The reason for the fee increase is along with our new Sales Tax obligation overhead, the general cost of doing business has increased, and our marketing costs have skyrocketed. Our last fee increase was more than 3.5 years ago, and to stay relevant and competitive in our online space requires additional marketing expenditures.
There is a new seller Service Fee of 3.75% of the item totals + shipping/handling on all finalized orders, rounded up to the nearest 25 cents. Even though we are adding this new fee, Ruby Lane is continuing to allow open communication between buyer and seller, unlike the majority of other marketplaces.
The minimum monthly Maintenance Fee is changing from $69 for up to 80 items, to $54 for up to 50 items.
The tiered per item system stays the same from 51 items and up:
- From item 51-150: 30 cents per item
- From item 151-1000: 20 cents per item
- From item 1001 on: 1 cent per item
Starting January 1, for a shop with up to 50 items, the minimum monthly cost of maintaining a shop on Ruby Lane is $54. For a shop with 80 items the minimum monthly cost is $63.
The one-time Listing Fee remains the same at 19 cents per item.
We realize the Sales Tax and buyer’s Service Fee changes are happening with holiday sales upon us, however, we have no choice but to comply. These new tax laws have put a tremendous burden on us and also now our shop owners. As always, we continue to evolve and make selling online as effortless as possible for both our sellers and buyers.
Thank you for your understanding.
Your Ruby Lane Team
If you want to really be special then you get to pay all those special fees.
I wonder how soon eBay will be instituting a Buyer Service Fee?
The 3.75% has already begun for sellers. The fee structure for the number of items in individual shops changes on Jan 1. They have these bottom basement sales like a flea market and than they have the nerve to charge buyers a “service fee” for purchasing from Rubylane like it is some elite experience. Many of the shop owners sell the same stuff on ebay, etsy, etc. Why buy from Rubylane when you can purchase SAME item, from SAME seller on another site with no “service fee?” RIDICULOUS. They clump in the “service fee” with taxes so many buyers may not realize the extra cost. Plus, I’ve noticed many sellers just up their prices before a 50% sale. Buyer Beware!
Ruby Lane says it will ban from their sales any shop which deliberately ups its prices just before a sale. Buyers are not stupid. If they are watching the price of a desired item they will surely NOTICE if the price rises just before a sale. Like all online market places the site is alive with snitches so for sure they will tattle tale about any shop repeatedly doing this.
However there is no rule against sellers entering new stock just before a sale at 2X the price they want to achieve. Then it looks like a genuine bargain. This is something retail stores have done for years. They call it a “special purchase” but really it is stuff they have just bought in specially for a sale because they know they can make a profit on it. If an item has never been listed before who can say what price you intended to sell it for?
Its not dishonest. Its just business.
You call it business, I call it deceptive. Rubylane may have snitches but they can’t police their site. Three items from 3 different sellers went up in price before the “sale.” I know this first hand since they were in my cart! I also find the lack of disclosure regarding the “service fee” deceptive. There are plenty of other venues to shop.
In fairness to the sellers on Ruby Lane, while I am sure that there are some scoundrels who raise their prices before the sale, some shopowners take the 50% discount off of the original price, like most retailers. So if something is on sale for 20% off and they decide to put it into the red tag sale, they will mark it back to original price and take the discount on the original price. A 50% discount is much higher than a 20% discount. There was never any intention to discount something 70%. That might be some of what you are seeing and explain the change in price, it is an honest price change and not meant to be deceptive.
As a seller on Rubylne, Ebay and Etsy I can say that If Rubylane is going to tack on more fees I’m glad they are doing it this way.– The reason — I am tired of all of these sites upping the costs over and over in sneaky ways. If the seller is not making a huge profit they have no option but to raise the prices. It always makes the seller look like they are trying to rake it in when they are only trying to cover new costs. RubyLane is already high priced unless you are selling high dollar items. I suspect the new Seller cost will make most of the middle of the road priced sellers close their shop. On Rubylane you are stuck paying high fees just to keep your shop open weather you sell anything or not – add this and they will be the most expensive store for sellers.
Having said that — all the sights are rolling the little guy. Etsy is forcing “FREE” postage on sellers. — or else — your items wont show until last! Sellers who can add and subtract– know that it is going to take advantage of many, many buyers because you will be forced to raise the price to cover the farthest postage.
Honest sellers are doing the best we can — but lets be honest its always the big – big company with cheap knockoffs that have the profits margins to handle all this.
Brick and mortar stores are all closing — now the small online stores are being attacked by big Company greed. The way things are going buyers will have 3 or 4 options and that’s it
This is All going to STOP.
2020 brings in Legitimate Selling sites.
The sites we have are legitimate — they are just taking advantage of buyers and sellers to line their own pockets. I wish that some legitimacy would come to the “free postage” scam. BUT way– way to many online buyers actually believe that Fairies and Magical Butterflies deliver for FREE
I can’t find anything on the RL site notifying buyers of the service fee. I put something in my shopping cart to see if the notice was there, it only gives an estimate of “taxes & fees”. It’s pretty unethical to charge a fee to buyers for the privilege of shopping on their site and then hide what you’re doing. They’re obviously hoping most buyers will not notice, or will assume the fee is charged by/goes to the seller. I’m floored that they could be so corrupt.
What really frosts my pants about this is the way they are collecting the fee. The buyer pays it to the seller, and Ruby Lane will take it out of the seller’s account at the end of the month. The seller is paying Paypal or credit card fees on money collected on behalf of Ruby Lane (in addition to fees on the sales tax and shipping), and they STILL have the nerve to charge their new sellers fee (rounded up of course, that extra dime or quarter on every sale and every seller will add up too). Way to profit from your “tremendous burden”, Ruby Lane!
The shop fee increase is is not a small increase. Fees will triple for some and double for most. Ruby Lane appears to need money, badly. They implemented this change right before the big holiday red tag sale. Customers are furious as are shopowners. Business was not great before and it will surely get worse from here. They have been losing 50 shops per month for 3 years now, so their income has be slowly deteriorating. Also they may be funding Rubylux with these new fees because that site is not doing well either. This is an unethical completely wrong headed, very poor business decision. What kind of a company charges customers a fee to buy on their site? No Ruby Lane you are not an auction house. Nor do you have the traffic, number of shops or name recognition of Etsy or Ebay so please stop comparing yourself to them. you are a very small fish in a big pond. And you still do not know who your customers are.
Ruby Lane are saying that the practice of charging “buyer” and “seller” fees is current on auction sites. Auctioneers have to make a viable profit. Ruby Lane have hired an expensive agency to do their state sales compliance for them and make the excuse that the new fees are necessary to ofset the cost of this. Surely this is a tax deductable business expense??? If so why pass the cost on to buyers and sellers? This is just double dipping.
The USPS shipping tool does not work for outside the USA so I have to compute shipping manually when a buyer makes multiple purchases. No problem in the past, I just sent them a corrected invoice. Or refunded to their Paypal or card the excess shipping.
However Ruby Lane has now charged buyer the full rate of sales tax based on the inflated shipping charge, so what happens when I refund the buyer? Do I get to pay the extra on their behalf. Ruby Lane say the charges will not be settled until the sale is “finalised”. So any refund I make via their platform to Paypal will be taken into account.
I am already offering buyers of multiple purchases the opportunity to buy from me directly outside the platform. As I am a small seller based outside the USA I dont have to charge sales tax or user fees.
This is why sellers are moving onto selling on social media and private buying/selling groups.
I just noticed that the Paypal payments on my Ruby Lane orders have the sales tax and buyer’s service fee combined under “sales tax”. This is so unethical of them to purposely keep their buyers in the dark about the hidden fee.
I did a test purchase, and clicked on the information icon to see the tax/fee breakdown. The service fee on an 88.00 item was 3.00
This may not seem like a big deal, but I think it annoys people who would have no problem paying 91.00 ro the item, but feel like these fees are chiseling, which of course, they are.
I think this is the start of the Rubylane death spiral
I too have a feeling of foreboding. Etsy got slated for raising a seller charge which included shipping. Shipping is NOT a service provided by the site. Packaging and shipping are done by the seller. Charging a % on it appears to be greedy and money grabbing;
I’ve been selling on Rubylane for years, and suspected that this would be coming eventually.
They seem to want the best of both worlds – get a monthly sellers shop maintenance fee whether or not seller has sales, and when seller has sales, take a skim.
This is probably not going to end well. I tested a purchase from my own shop – I think customers are either going to back out of sale when they see the service charge (or just contact seller and ask for a discount).
The two big advantages to Rubylane were no extra fees aside from the shop maintenance, and a clean site without junk merchandise or ads. I guess those will be on the horizon soon.
They mention in the release that they don’t restrict communication between buyers and sellers – I predict that savvy buyers will just go around Rubylane and contact the seller directly when it comes time to make a purchase – if they don’t just quit in disgust.
I would love to see the metrics on how many orders get placed in carts then cancelled or abandoned.
Well Rubylane, like Ebay, it was nice while it lasted.
When I send them their dispatch notice I am emailing all my RL buyers and suggesting that for future purchases they simply use the site as a “shop window” and contact me directly with the item URL or stock number when they want to buy. I will then simply bill them via PP for the item price plus shipping. Im also enclosing a note to this effect on my packing slip. No sales tax or user fees. 3 buyers with multiple orders have already asked me to cancel the RL sale and bill them directly. more than 50% of my buyers are regulars who make multiple purchases.
I plan to do what I can to accommodate – but my concern is with buyers who just walk when they see the service fee and never communicate with me.
I would do the same, but my concern is that buyers will back out when the see the service charge and not contact me at all.
Plus I wouldn’t count on this method long term. Closing the “off site sale” opportunity will be the next shoe to drop.
Ebay make sit difficult for buyers and sellers to communicate but there are still “ways” of coaxing regular customers off the site to make private deals.
I was a Ruby Lane seller, and I’m still a buyer. The sudden onset of taxes and now a “fee” to keep Ruby Lane online? Uh, no thanks. I can guarantee Ruby Lane sellers are going to find that that “fee” just FOR Ruby Lane is going to turn a lot of buyers OFF.
I am rebating the fee (surprised they didn’t use the Orwellian “convenience fee” monicker), to my customers and have a shop announcement to that effect.
I have almost 500 items in my shop, and another 150 or so in the process of listing, so can’t just turn off RL right now. But in the coming year I will be selling off more locally, and get my RL shop presence reduced and maintenance fees downsized.
Selling antiques on social media may seem odd to those of us who have shops but there are dozens of “buy/sell vintage” groups on Facebook etc. I suspect that some RL sellers who have held off from it will be moving onto social media where deals are done between private individuals with no taxes, user fees, etc. And a lot less in the way of rules and regulations.
RL would be better served to seek out the handmade and artisan goods lost from Etsy/eBay and add them to the seller base, and take back market share. Undisclosed fees are gotchas that erode trust. Did they learn nothing from those two or does everybody have to jump off a cliff because everybody else is?
I’m waiting for some of these sites to start demanding “membership” fees, if you want to see more than 12 shirts, 4000 hand bag knock offs and a broken roller skate on them. Be interesting to see just how much tolerance a consumer will have for the tactic. Amazon has prime after all.
There’s nothing to stop any shop owner from adding their email/website to the invoice when they ship, urging buyers to visit them off site.
Or offering them the opportunity to get what they pay for – the items – without unfair taxes and sneaky fees which are effectively “dead money!. In the UK we have a massive 20% sales tax on goods and services. So if you spend $100 on an item you only get $80 worth for your money. This is why we have such a flourishing black economy built up around avoiding this tax.
These bozettes want to charge me for taking my money?
Hahahahahahahahahahahahahahahahaahahahahahahahhhaaaaa!
No.
Process my payment, take the cut and send it to the seller, greedy bastards.
Or…there are a bazillion places to shop online. I’ll take my money elsewhere.
I shall bury their pithy service fee in my doodoo box.
>^.^<