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The new checkout Etsy had to halt during the first 5% rollout is coming back, and they're fucking it up even more!
Sales tax...you need to set it in your Etsy...but if you live in a state where you have to charge different rates depending on location - well, you're fucked. Etsy is overriding any Paypal settings you may have for the tax rate.
Etsy is once again ignoring legality and just speeding forward because it's shiny. Remember how long it took for international sellers to point out that the currency needed to be noted. I'm currently taking bets on how long it will take to make Etsy say "hmm maybe overriding existing tax rate calculators with our own bogus, thrown together bullshit is a bad idea"
Cosmic Yuk said it best in our previous post
Looking for feedback? Are you fucking serious? You're rolling out another half-assed feature that screws with a huge segment of your membership!!!!
Does no one do any research? What are people supposed to do during the time you are 'figuring it out'? Overcharge? undercharge? refund the overage? eat the underages? You do realize that Paypal intends to charge for refunds, right? That you can't keep accurate tax records if you charge more or less than you're supposed to? And that it is illegal to do in some states?
Are you FUCKING SERIOUS ETSY??????????
Edit: As of 1.5 hours before rollout they have not sent emails to all sellers - only to the EtsyNews subscription list
Update: Checkout rollout has been pulled back to address the sales tax issues though many are reporting checkout problems and seeing a new layout/Paypal interface.
27 Comments:
Ugh. WHY? What does this improve? They are replacing an apparently well-functioning off site service with a LESS well functioning service. How does this help anyone?
Oh and "Do you currently set rates for different zip codes within one state?
We're looking for feedback to understand how we can improve the tax settings in the future. "
WTF! Do you not research how people use these services before deciding to provide said service yourself?
Uhmn, out of curiosity because laws vary by state, country, or nation or whatever. But if you're going to charge sales tax — then some places — for legal purposes — demand that you state your prices with the line "plus tax" or "taxable"
So, kind of like how currency needs to be stated in the country it comes from like CA, AU, or USD — are they going to put the byline of "tax"?
And, boy this is going to be a great exercise is dumbness when USA people with tax exemptions get their panties in a knot over being auto-charged tax — and dopey sellers not knowing how the hell to turn the feature off once they turn it on...
Oh shit, I just thought about this for 2 minutes and I'm completely horrified, amused, and smacking my forehead.
I've been avoiding clicking on that forum thread for like a week... I just had a spate of sales, so really, I'm not looking forward to this... especially if the sudden idea of having to pay sales tax turns out to be a turn-off for a number of buyers — which will inevitably make them non-paying buyers & canceled sales.
Yup. Half-assed is putting it mildly.
They live in a state with one of the most complex sales and use systems in the US and they seem to be surprised that this would be an issue.
Even if you have a flat rate you could have problems. In some states if you charge even .01 more then the exact postage fee it is considered a handling charge and you must apply the tax. There needs to be a way to say, tax applies to shipping on a case by case basis because again, that same state may also make it illegal to pay it out of pocket.
ARGH! Who the hell is there accountant? At the very least they should have been able to clue them in that NY tax collection would be messed up by this.
Every other check out system I've looked at/used has allowed me to set tax tables, set exceptions and indicate if shipping needed to be taxed.
Even if it would be in clear violation of law (which it may or may not be, I don't know right off the top of my head) what's to stop members from setting a blanket 10% rate for every state / province possible?
The seller keeps track and pays taxes when appropriate, but otherwise pockets an extra 10% fee free on the side.
My favorite part of the discussion was when ericds quoted another seller complaining about lack of variable in state rates (can only set one rate for the whole state). In the quote, on page 6 of the forum thread I think, ericds asks how it works in PayPal and says they are taking in feedback to improve......
How the hell can a company with millions of dollars in investments and probably 100 employees by now NOT have any clue what is going on outside of their plush fabric cubicles and ping pong tournaments. I mean at least put a fucking intern on the "figure out how taxes work in PayPal so we don't royally fuck this up" project.
That concludes my rant, I think I'll just have a coffee and watch the show.
Well, how can one expect Etsy to take monetary record keeping seriously? Afterall they cook their own books each time a seller has to do a refund via Paypal in order to give semi efficient discounts, since Etsy sees no good reason to implement a coupon code capability.
I know that the answer to this is NO but does anyone at Etsy HQ have a fucking brain??
How do they not see the multiple levels of error in this new tax system they want to roll out??
Just the number of problems people are foreseeing and posting to their thread is cause enough to stop it dead in its tracks. How can none of their employees see it, as well? They all operate shops so that have to know that this will be a huge problem for bookkeeping, let alone customer service (but I don't expect them to ever think about customer service).
Oh come on, it's not really a BUSINESS they're attempting to run (into the ground) !
"You do realize that Paypal intends to charge for refunds, right?"
They're already doing this apparently. I had to refund an order from another ecommerce site and got charged $0.96 for it, putting my account in the negative. :(
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It's pretty sad that Etsy is missing important things like state tax differences. I've worked on ecommerce/small business tools for several years, and it was details like this that our teams had to be fairly familiar with, especially if you could create legal issues by not doing so.
It's really about being familiar with your customers and what they need, but they seem more interested in decorating their office and talking to the press than they are about making their customers happy. They seem to not realize that happy (and successful) customers will improve their own business, but it does take effort. :P
I think we need to start questioning what exactly are the motivations behind this sales tax tweek as well as other changes being rolled out on a weekly basis just prior to the holiday shopping weeks. Since Etsy spews total bullshit about them (with hundreds of flaky, bizarre "Announcements), sellers need more facts before they decide whether to pull up stakes and move elsewhere.
Sellers need to be aware that the IRS is developing lots of data sources to cull tax info from small businesses, not only from the ecommerce sites, but from the major pay vendors, meaning PP.
There are reasons behind these changes, but Etsy sellers will be the last to know 'cause Etsy sure isn't going to tell them.
Like the latest report on July '10 sales as 75% more than July '09 sales which (read between the lines) that Etsy is no longer reporting sales increases of 120% from year to year, AND never factors in the huge increase month to month in NEW stores and MILLIONS of new and renewed item listings.
Etsy can bullshit better than anyone else, but I'm extremely wary of all the new "improvements" such as EXACTLY WHO BENEFITS from these changes? Etsy, or the sellers? Or who?
As for "who is going to benefit from these changes?", you can bet your ass that they will figure out some way to connive some shekels for themselves.
Isn't it strange that they can screw up everything they touch, but still find ways to put money in their coffers?
So glad all my items have finally expired!
@The Funny One:
Excellent points and effing scary.
This sales tax "tweak" is going to be a clusterfuck, to be sure.
I think this is a first step towards Etsy's inhouse payment system.
If you haven't already left, RUN!
Eveline,
You know that thought did cross my mind when I first saw the announcement.
I just don't get it. Why in the world would etsy disable a system with paypal that works JUST fine, to replace it with something half assed.
Oh, wait, I forgot what site I was talking about.
what about states like NH that have no sales tax .... gees, i put my shop on vacation while i'm in the midst of moving but i really dread opening it up again ....
You are all so right, the tax laws for each state re ecommerce sales are extremely complicated and getting more so every year. Etsy will not only fuck it up, they'll take their sellers right down the hole with them.
And, if you as an Etsy seller get into deep doo-doo because your tax forms are shit because the Etsy numbers are shit ---- will Etsy go with you to the audit? Will Etsy pay your penalties?
We know where this train is headed, so do the right thing:
DO NOT ENTER ANY TAX RATES OR NUMBERS ON THIS NEW ETSY SECTION.
Don't do it.
If Etsy has a problem with that, then they can go through seller by seller and make up numbers (just like they make up ALL their numbers).
Quoting The Funny One:
"EXACTLY WHO BENEFITS from these changes?"
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As Deep Throat told Woodward and Bernstein during the Watergate investigation, "Follow the Money."
Etsy is benefitting financially from this somehow, for sure.
If they are paying somebody, even if it's a bunch of idiots, to engineer these changes, they expect to gain something, somehow. Etsy will make money off this.
Think about this: factoring sales tax inside Etsy lets them slap on their 3.5% fee to the tax you charge instead of those pennies go to paypal's fee. The way it is now, Etsy has no way of getting their grubby hands on that teeny tiny chunk of change. Which could potentially be the answer to The Funny One and Cat Power's comments...And Eveline is probably spot on. Next up: tiny fee hike and etsy internal payment system. Bye, bye paypal.
I just found an e-mail that gave me almost exactly 2 hours to deal with the new tax tool.
Two friggin hours?
I ranted. Do you think I'll get shot down?
http://www.etsy.com/forums_thread.php?thread_id=6611060
Does anybody think that PP's express checkout package is this difficult to install on a website? I'd bet the farm that it's already set up to work seamlessly, using their own tax formulas that everyone has already been using. Why would Etsy need to override it?
I mean, if you want to integrate PP on your website you install the cart, put your buttons on your items and wah-la PP takes care of it all. So why the big production being made out of the express checkout?
It doesn't appear that it may be a step they are taking toward an in house payment system - Gods and Goddesses help us all.
What gets me even more is seemingly naive responses to questions they should already know the answers to. And their attitude that it's ok to roll it out as is because they can fiddle around with it til it's perfect. Completely oblivious to the fact that a significant number of users are fucked until it is fixed.
Many admin have shops, so they must not have ever bothered collecting taxes in the first place or they would have been the first ones to point out the problems with the new system.
Oh, and I did read that the Paypal charge on refunds went into effect in August 10: Effective Date:
Aug 10, 2010
* Amendment to the PayPal User Agreement
Refund Fee. Section 8.5 (Additional Fees) is amended to add a new refund fee. If you refund a Purchase Payment, we will retain the Fixed Fee portion of the Purchase Payment Fee. The buyer’s Account will be credited with the full Purchase Payment amount and the Fixed Fee portion of the Purchase Payment Fee will be deducted from your Account in addition to the amount of the refunded payment. The Fixed Fee will depend on the currency of the Purchase Payment and is listed in 8.4(c). Effective Date: Aug 10, 2010
So, do you think they'll come up with discount coupon codes or some sort of global price editing before the holiday shopping season? Or will sellers have to take an even larger hit by paying FVFs on the whole price and losing their fixed fee charge in Paypal when they refund the discounted price difference back to the customer.
Can;t wait to see what else they have up their sleeve, cause this is just the beginning...mark my words.
Cosmic Yuk said...
Many admin have shops, so they must not have ever bothered collecting taxes in the first place or they would have been the first ones to point out the problems with the new system.
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That is what I was thinking too. They all live in NY and they sell at Etsy, so if none of the employees who are also sellers raised this issue during the development process, they must just not be collecting tax from NY buyers. I wonder if they report their shop profits as income?
It would not surprise me at all, that these hipsters who spend all day handing out "business advice" don't even bother with such trivialities as taxes.
I have always had the option of Google Checkout or Paypal payments Standard so never really looked into the difference between Express, Standard and Pro.
Is it Paypal Express that they are integrating? The biggest thing I can find from looking around is that apparently Paypal Express requires a Paypal account in order to buy.
That could be a problem.
Here's what I've found to be the flaw: THEY'RE USING THE WRONG ADDRESS TO CALCULATE THE SALES TAX. (Ahem.) Let's say, for example, that I do business in Maryland, where there is a 6% sales tax. Ms Buyer, who also lives in Maryland, wishes to purchase a gift for her grandma, who lives in--oh, I dunno, let's say Pennsylvania. Ms Buyer owes, and I'm legally bound to collect, sales tax on that item. MARYLAND sales tax, since we both live there. By calculating sales tax based on a "ship to" address, the wrong amount is going to be collected. Ms Buyer can enter her grandma's shipping address in PayPal, I can ship to it, but there's going to be a pain in the ass interaction over the wrong tax rate being charged. And if Ms Buyer doesn't shop on Etsy very much, she's probably going to think I'm a crook. Clusterfuck is too mild a term for this.
Anne I don't know how sales tax works for shipping to another address, but it seems like it would be based on the person who buys it.
I am so glad now AF decided to shelve Paypal Express, they spent a lot of time on it and finally told sellers, they couldn't get it the functionality they needed, and even though they had put in work, they were pulling back on it. Never did say which functions but I guess this was one.
Virginia,
I don't think you'll get "shot down", and, since you didn't post in the Dorque, you shouldn't be "shut down". :) But then, stranger things have happened...
If they actually go through with this now, considering the fact that they are far from ready, me thinks the forums should be loads of fun come tax time. You bet your asses I'm marking my calendar.
SusanA, the sales tax needs to work exactly the way it works if you head out to the local mall, purchase your item, and mail it to Grandma. You, the buyer, pay the applicable tax(es) in the place where the item is purchased.
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