Silk Road forums

Discussion => Silk Road discussion => Topic started by: pb4ug02bed on December 15, 2012, 10:13 am

Title: Why are buyers getting penalized for canceled orders?
Post by: pb4ug02bed on December 15, 2012, 10:13 am
Just made a hedged order for $360, and $346 is in escrow. If order cancels, I get only 346 back. WHY?
I noticed this when I made a large order for 125 btc. It got canceled next day, and I got back 118.5 btc. Why the hell am i being charged $90 as a buyer for a canceled transaction? according to the hedge (btc's went up about 10 cents), I was only supposed to get about $12 less back. Then I realized, that the money they put in escrow already has a fee taken from money you put in, and when they return money, they do it at an increased BTC value (ie.. if I purchase, then btc is worth 13.5, but if they are returning dollars to me, then for some reason btc is worth 13.9). That's messed up, SR.

Title: Re: Why are buyers getting penalized for canceled orders?
Post by: melonballer on December 15, 2012, 10:24 am
Why was the 125btc order cancelled?
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: pb4ug02bed on December 15, 2012, 10:29 am
There was no explanation. No messages. Just canceled it.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: pb4ug02bed on December 15, 2012, 10:34 am
There were 2 listings for the item i was buying. One was for $1670, and you don't have to FE, or for $1590 and you have to FE. Well, I didn't wanna get scammed, so i paid the extra $200 to not FE, and he just canceled it next day.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: acider on December 15, 2012, 12:10 pm
Afaik when you cancel you still get charged for SR fees.  Those are 2-10% depending on how big the order was.
If you are a new buyer he might cancelled because you made a big purchase, if that's the case start low and build up your stats.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: eddiethegun on December 15, 2012, 07:01 pm
It's not SR fees, it's hedging.

When a hedged item is ordered SR automagically exchanges the BTC in escrow to USD at the current market rate. This protects a vendor against drastic drops in BTC price. When the payment is released from escrow or the order is canceled and money released back to the buyer, SR does the reverse transaction and sells the USD for BTC at the current exchange rate. Selling and buying at current market prices costs the difference between the ask-bid price (ask-bid spread) which, according to SR, usually adds up to around 4%.

If the item is unhedged, on cancellation you get back 100% of what you payed.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: pb4ug02bed on December 15, 2012, 07:09 pm
It's not SR fees, it's hedging.

When a hedged item is ordered SR automagically exchanges the BTC in escrow to USD at the current market rate. This protects a vendor against drastic drops in BTC price. When the payment is released from escrow or the order is canceled and money released back to the buyer, SR does the reverse transaction and sells the USD for BTC at the current exchange rate. Selling and buying at current market prices costs the difference between the ask-bid price (ask-bid spread) which, according to SR, usually adds up to around 4%.

If the item is unhedged, on cancellation you get back 100% of what you payed.


That's the problem, though. The wrong person is being penalized those 4%. I wasn't the one who canceled, and I did nothing wrong. There were no rules on the vendor's page about who is allowed to purchase and who isn't. I have been a member for 7 months and have almost $3k of purchases with 0 refunds on this buyer account.   He canceled, without sending a single message to me about why. Why should I be penalized for doing nothing wrong. The seller takes $0 fees and I take $90 fees for his mistake of either not having the product or letting me purchase something and then getting scared to ship it. There's something wrong with that set up. Sure, it's fine that they take $12 from me for the price fluctuation. But taking $90 because I have to pay 4% hedge fees is ridiculous, unless it was indeed MY fault for not following the vendor's guidelines. I spend over 1,000 USD a month here, and every time I make a big order and the seller screws up, I get penalized (this wasn't the first time).  I recently switched to this account because my previous big order got refunded because the seller;s friend "forgot to put mailing addresses on the orders." I lost hundreds of dollars, and it screwed up my refund% stats big time,  and SR support could do nothing about it. The reason I lost hundreds, was because this order was unhedged, and the seller obviously refunded me because I purchased when btc's were $15.40, and price fell to less than $10 next day , so he didn't want to sell at that price and pretended like he screwed up. I contacted SR Support. No help. Sorry that I'm getting off topic here.

Well, I'm just gonna order OOE from my regulars from now on until this problem is fixed.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: PhilipJFry on December 15, 2012, 07:24 pm
Hedging protects against BTC fluctuations and this protection comes with a price. If the item was not hedged but you had lost because of BTC fluctuations you would probably cry about why the item was not hedged. So, no matter if one chooses to hedge or not hedge orders, there is no way to always do it right to everybody.

A vendor can have a variety of reasons why he cancels an order. There is no obligation to accept every order. It would be a thing of courtesy to let the buyer know why an order was cancelled, but you are not entitled to an explanation.

To protect yourself against the same thing to happen again, i would contact the vendor before placing the order to make sure it will be accepted, especially if so much many is involved.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: Dkn255hz on December 15, 2012, 08:17 pm

A vendor can have a variety of reasons why he cancels an order. There is no obligation to accept every order. It would be a thing of courtesy to let the buyer know why an order was cancelled, but you are not entitled to an explanation.

To protect yourself against the same thing to happen again, i would contact the vendor before placing the order to make sure it will be accepted, especially if so much many is involved.


It is understandable that a vendor may have a reason to cancel an order, but no entitlement to an explanation when the buyer gets burned on the hedging conversion?  That doesn't seem right.  As far as contacting them before placing the order - if the vendor has an active listing, shouldn't that mean that the item is ready and available to be shipped?  I can't see sending a message every time asking if a vendor's listing is valid and whether or not it will be cancelled if put through, except maybe if it is a very high dollar amount. 
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: pb4ug02bed on December 15, 2012, 08:59 pm
It's not SR fees, it's hedging.

When a hedged item is ordered SR automagically exchanges the BTC in escrow to USD at the current market rate. This protects a vendor against drastic drops in BTC price. When the payment is released from escrow or the order is canceled and money released back to the buyer, SR does the reverse transaction and sells the USD for BTC at the current exchange rate. Selling and buying at current market prices costs the difference between the ask-bid price (ask-bid spread) which, according to SR, usually adds up to around 4%.

If the item is unhedged, on cancellation you get back 100% of what you payed.


That's the problem, though. The wrong person is being penalized those 4%.

It's not a penalty, it's a fact of conversion. If you don't want to lose the 4%, make sure the order's not going to be cancelled before you place it. Simple.

That's a good point, and I have now learned a lesson not to make large purchases without making sure the vendor is okay to ship."
Of course, it's still set up that the wrong person has to absorb that conversion fee. And let's say I message the vendor on SR, and he says "no problem. order, and i'll ship, but then decides to cancel for whatever reason, you still get penalized, and it shouldn't be that way.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: Dkn255hz on December 15, 2012, 10:20 pm

That's a good point, and I have now learned a lesson not to make large purchases without making sure the vendor is okay to ship."
Of course, it's still set up that the wrong person has to absorb that conversion fee. And let's say I message the vendor on SR, and he says "no problem. order, and i'll ship, but then decides to cancel for whatever reason, you still get penalized, and it shouldn't be that way.
[/quote]

I think you have a legitimate issue and while it is probably a good idea to message the vendor regarding the availability of an item, I think the fundamental concept of having to do the vendors job of checking the validity of their listings is wrong.  The vendor should be on top of that and if the item in the listing becomes unavailable, then they should take it down. 
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: MySecretAccount on December 16, 2012, 12:02 am
Here's my gripe - yes, not making an order you plan on canceling is obvious. However - I've seen (and dealt with) shipping options not appearing for 'hot" items that are flying off the shelves.

While it's not ideal, I prefer, if the vendor is reliable, to buy items that are either part of the order, or similar value, then PMing saying that the shipping is fucked, if you want to cancel (either for accuracy, ore more importantly, to have the proper number of transactions/feedbacks) and have me just re-order once it's fixed.

I've had too many things come up where either shipping options are incorrect, or not per their profile (like 1 shipping fee then $0 for other things in the same box. They the have to cancel the order and either custom list or re-setup the existing listings.

Getting dinged for site failure pulling proper shipping opens shouldn't hit the buyer or selller - if it's DB issues not pulling their proper shipping options, how is it fair that I lose coins because I have to order immediately to ensure things don't sell out.

Rare circumstance, but if you're ordering $500 + shipping, and your $501 balance is now whatever, $490, and you are $10 short....that's just fucking silly.

/rant
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: Crazy Eights on December 16, 2012, 12:09 am
I understand the percentage penalty for an order cancelled while using the escrow system - the problem really resides in the fact, that the majority of buyers are unaware of these fees that they incur.

The information regarding cancellation is out there but in a place most customers overlook.

ce
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: Ballzinator on December 16, 2012, 12:16 am
I think you have a legitimate issue and while it is probably a good idea to message the vendor regarding the availability of an item, I think the fundamental concept of having to do the vendors job of checking the validity of their listings is wrong.  The vendor should be on top of that and if the item in the listing becomes unavailable, then they should take it down.
Here's my gripe - yes, not making an order you plan on canceling is obvious. However - I've seen (and dealt with) shipping options not appearing for 'hot" items that are flying off the shelves.

While it's not ideal, I prefer, if the vendor is reliable, to buy items that are either part of the order, or similar value, then PMing saying that the shipping is fucked, if you want to cancel (either for accuracy, ore more importantly, to have the proper number of transactions/feedbacks) and have me just re-order once it's fixed.

I've had too many things come up where either shipping options are incorrect, or not per their profile (like 1 shipping fee then $0 for other things in the same box. They the have to cancel the order and either custom list or re-setup the existing listings.

Getting dinged for site failure pulling proper shipping opens shouldn't hit the buyer or selller - if it's DB issues not pulling their proper shipping options, how is it fair that I lose coins because I have to order immediately to ensure things don't sell out.

Rare circumstance, but if you're ordering $500 + shipping, and your $501 balance is now whatever, $490, and you are $10 short....that's just fucking silly.

/rant
Truth. +1 to both of you.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: pb4ug02bed on December 16, 2012, 12:51 am

That's a good point, and I have now learned a lesson not to make large purchases without making sure the vendor is okay to ship."
Of course, it's still set up that the wrong person has to absorb that conversion fee. And let's say I message the vendor on SR, and he says "no problem. order, and i'll ship, but then decides to cancel for whatever reason, you still get penalized, and it shouldn't be that way.

I think you have a legitimate issue and while it is probably a good idea to message the vendor regarding the availability of an item, I think the fundamental concept of having to do the vendors job of checking the validity of their listings is wrong.  The vendor should be on top of that and if the item in the listing becomes unavailable, then they should take it down.
[/quote]

I actually looked at the vendor's page today, and it does have the reason right there. Cause he canceled my order on 12/12/12:
"12/12/12- Sorry to all coke orders that didn't go out yesterday. I broke the brick open and was not happy with the quality so I'm waiting to swap it out today. If this does not happen, I will be cancelling the coke orders. Sorry for any troubles this causes you, but I care about my rep and selling good product. If nothing else I should have more on Friday or Saturday."

So apparently he canceled everyone's orders. Which, again, is not my fault.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: tan on December 16, 2012, 08:04 pm

That's a good point, and I have now learned a lesson not to make large purchases without making sure the vendor is okay to ship."
Of course, it's still set up that the wrong person has to absorb that conversion fee. And let's say I message the vendor on SR, and he says "no problem. order, and i'll ship, but then decides to cancel for whatever reason, you still get penalized, and it shouldn't be that way.

The fact still remains that if a hedged order is cancelled for no matter which reason, it will cost you the buyer, 4% of the order volume. Now, the question is if what you want is to be right or to not lose money on cancelled orders.

When you buy an item, the price you are shown contains what the vendor wants + transaction fees for SR + hedging fees, also for SR. Irrespective of the success of the transaction, during the time between placing your order and the moment it was cancelled, SR carried the risk of your money in escrow losing its value and protected you against it. For this service you owe SR the hedging fees. This has nothing to do with the vendor.

The vendor chose to hedge your item. If the order gets cancelled, hedging is only a protection for you, the buyer, the vendor has zero profit in it. Hedging only then helps the vendor, if a transaction is successful. He is then protected against the value loss of the coins until the order gets finalised.

So, in your case SR rendered you a service for the hedging fee you paid, that's all.

If you want to avoid this service in future, act accordingly. A first step would be to inform yourself if an item you want to buy is hedged or not hedged. If it is hedged, ask yourself if you are prepared to carry the risk of a cancellation and the costs that might be involved.

You can't reproach SR for offering the hedging service and asking a fee for it.
You can't reproach the vendor for choosing hedging for his items to protect you and himself.
You can't reproach the vendor for cancelling orders as he sees it fit.

Nobody has penalised you. What happened is that you used a service without informing yourself beforehand and that you are unhappy because of the costs this has caused you.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: pb4ug02bed on December 17, 2012, 09:07 am

That's a good point, and I have now learned a lesson not to make large purchases without making sure the vendor is okay to ship."
Of course, it's still set up that the wrong person has to absorb that conversion fee. And let's say I message the vendor on SR, and he says "no problem. order, and i'll ship, but then decides to cancel for whatever reason, you still get penalized, and it shouldn't be that way.

The fact still remains that if a hedged order is cancelled for no matter which reason, it will cost you the buyer, 4% of the order volume. Now, the question is if what you want is to be right or to not lose money on cancelled orders.

When you buy an item, the price you are shown contains what the vendor wants + transaction fees for SR + hedging fees, also for SR. Irrespective of the success of the transaction, during the time between placing your order and the moment it was cancelled, SR carried the risk of your money in escrow losing its value and protected you against it. For this service you owe SR the hedging fees. This has nothing to do with the vendor.

The vendor chose to hedge your item. If the order gets cancelled, hedging is only a protection for you, the buyer, the vendor has zero profit in it. Hedging only then helps the vendor, if a transaction is successful. He is then protected against the value loss of the coins until the order gets finalised.

So, in your case SR rendered you a service for the hedging fee you paid, that's all.

If you want to avoid this service in future, act accordingly. A first step would be to inform yourself if an item you want to buy is hedged or not hedged. If it is hedged, ask yourself if you are prepared to carry the risk of a cancellation and the costs that might be involved.

You can't reproach SR for offering the hedging service and asking a fee for it.
You can't reproach the vendor for choosing hedging for his items to protect you and himself.
You can't reproach the vendor for cancelling orders as he sees it fit.

Nobody has penalised you. What happened is that you used a service without informing yourself beforehand and that you are unhappy because of the costs this has caused you.

I was never aware of these hedging fees until I noticed how much less money I got when my order got cancelled. Perhaps, this should be something that is automatically written next to all hedged items. (i.e. "Hedged [This item has an un-refundable hedging fee of 4%]")
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: Ballzinator on December 17, 2012, 09:36 am

That's a good point, and I have now learned a lesson not to make large purchases without making sure the vendor is okay to ship."
Of course, it's still set up that the wrong person has to absorb that conversion fee. And let's say I message the vendor on SR, and he says "no problem. order, and i'll ship, but then decides to cancel for whatever reason, you still get penalized, and it shouldn't be that way.

The fact still remains that if a hedged order is cancelled for no matter which reason, it will cost you the buyer, 4% of the order volume. Now, the question is if what you want is to be right or to not lose money on cancelled orders.

When you buy an item, the price you are shown contains what the vendor wants + transaction fees for SR + hedging fees, also for SR. Irrespective of the success of the transaction, during the time between placing your order and the moment it was cancelled, SR carried the risk of your money in escrow losing its value and protected you against it. For this service you owe SR the hedging fees. This has nothing to do with the vendor.

The vendor chose to hedge your item. If the order gets cancelled, hedging is only a protection for you, the buyer, the vendor has zero profit in it. Hedging only then helps the vendor, if a transaction is successful. He is then protected against the value loss of the coins until the order gets finalised.

So, in your case SR rendered you a service for the hedging fee you paid, that's all.

If you want to avoid this service in future, act accordingly. A first step would be to inform yourself if an item you want to buy is hedged or not hedged. If it is hedged, ask yourself if you are prepared to carry the risk of a cancellation and the costs that might be involved.

You can't reproach SR for offering the hedging service and asking a fee for it.
You can't reproach the vendor for choosing hedging for his items to protect you and himself.
You can't reproach the vendor for cancelling orders as he sees it fit.

Nobody has penalised you. What happened is that you used a service without informing yourself beforehand and that you are unhappy because of the costs this has caused you.

I was never aware of these hedging fees until I noticed how much less money I got when my order got cancelled. Perhaps, this should be something that is automatically written next to all hedged items. (i.e. "Hedged [This item has an un-refundable hedging fee of 4%]")
That's a good idea.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: PhilipJFry on December 21, 2012, 08:05 am
You are right, the hedging fees should be clearly stated, so one can easily consider this factor. As it is now, you'll see if an item is hedged only *after* placing an item into the shopping cart and inspecting the cart.
Title: Re: Why are buyers getting penalized for canceled orders?
Post by: Harmful Hits on December 21, 2012, 08:20 am
Just made a hedged order for $360, and $346 is in escrow. If order cancels, I get only 346 back. WHY?
I noticed this when I made a large order for 125 btc. It got canceled next day, and I got back 118.5 btc. Why the hell am i being charged $90 as a buyer for a canceled transaction? according to the hedge (btc's went up about 10 cents), I was only supposed to get about $12 less back. Then I realized, that the money they put in escrow already has a fee taken from money you put in, and when they return money, they do it at an increased BTC value (ie.. if I purchase, then btc is worth 13.5, but if they are returning dollars to me, then for some reason btc is worth 13.9). That's messed up, SR.

SR does take commission on canceled/refunded orders