Everyone have their foil hat firmly in place? Then let’s go.

The real reason eBay is no longer allowing sellers to charge buyers for insurance has nothing to do with fees. Instead it’s a ploy to manipulate the government by hitting it where it hurts: the already failing United States Postal Service (USPS to those in the know) and your local post office.

Suspiciously close to the news that the USPS is in such financial trouble that they have offered to buyout 150,000 works in order to save themselves, eBay announces something that will serve as the nail in their coffin. Not seeing the connection?

By no longer allowing sellers to charge for insurance, sellers now have to either “fold” (I hate that new buzz word) the insurance costs into their item price (where they will pay eBay’s fees on it) or into their shipping costs (where they will face DSR wrath from buyers). Or, of course, they could take super-secret option #3 which is: use FedEx or UPS.

You see, USPS has long been a popular eBay favorite because, if you sell small items with a low weight or media items, they are the cheapest shipping in town. For larger items, UPS and FedEx usually are not only cheaper, they provide more reliable service and they include insurance for free for all items under $100 for most accounts and above $100 shipping is less than $1 per each additional $100, making it much cheaper than USPS’s insurance costs.

So, adding in the insurance cost, those few dollars that sellers were saving with the USPS are suddenly gone making UPS or FedEx a much more appealing option. Add to that that both UPS and FedEx rates go down the more frequently you ship and this new policy could cause sellers to switch to definitely UPS (the approved eBay carrier) but likely also the similarly priced FedEx as well en masse.

Why would anyone use the unreliable and poorly serviced USPS (especially since they will be short staffed after this buyout) if they work out to be the same price as UPS or FedEx?

So the question is why? Did eBay and UPS sit down at the blood-stained wooden table in their evil bunker and hammer out some kind of referral deal? If eBay changed policy to favor sellers that switch their business to UPS, they get a kick-back?

Or did eBay simply want to send the US government a message for trying to force them into site wide sales tax, releasing seller tax records or any of the other movements eBay Town Hall has been trying to fight over the years by showing that with just flexing one policy muscle, they can hit one section of the government’s business hard? If you don’t play nice with us, we won’t play nice with you.

For the record, to me, this just seems like a coincidence and I don’t buy into this conspiracy theory at all. . . or do I? 😉

Please feel free to debunk this theory in the comments below. Please feel more free to give evidence that supports this theory or share your own conspiracy theory. 😛