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Why Does Fiverr Charge 20% Commission on Tips?


fonthaunt

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Why does Fiverr Charge a 20% commission on tips?

In very plain language, if tips weren’t considered the same as all other payments, it would lead to a loophole where Fiverr doesn’t get paid because the funds are given to the seller for a job as a tip.

If you want to see an example of potential abuse:

Click for Abuse Scenario

A regular buyer could ask their chosen seller about a discount on the $40 package the buyer purchases every month. The seller could take a small risk buying offering to discount through a special arrangement. They tell the buyer to order a $5 gig and then send a tip for $30 after delivery. The buyer gets their “discount” of $5, the seller pays commission on $5 but the seller walks about with the extra $30 and Fiverr earns only $1 on a $35 sale. Fiverr could potentially lose too much income to support the platform, and then we all lose.

If you want the official version from Fiverr, it says this:

"Why is Fiverr charging fees?

Fiverr’s 20% commission applies to all tips. This fee is applied to prevent abuse or fraud on the platform. The same fee applies to the “Tip Gig” many sellers create, so the fees aren’t extra, they’re now a part of the total order."

“The tip will clear at the same time of the order. Also, if an order is cancelled, the tip will be cancelled.”

From:
http://support.fiverr.com/hc/en-us/articles/204903447-How-do-I-leave-the-seller-a-tip-

if you Want a Little More to Think About:

[details=Click to Read - Where Your Money Goes]Fiverr doesn’t charge sellers anything to create an account and put up as many gigs as their level allows. They can also bid on Buyer Requests for free. Fiverr only takes 20% from all earnings AFTER the seller makes sales! What do you get?

A platform to sell your services and products
Traffic from all Fiverr marketing
Traffic from Fiverr marketing that lists your specific gigs in email or social media ads that go to buyers who have purchased in your category
A method to receive payments without giving out your personal information
Options to market your gigs off-Fiverr through Fiverr Anywhere
A Customer Support system that is available to all sellers at all levels for no additional fees
A Terms of Service to help protect buyers and sellers
and the list could go on…

Fiverr’s business model is to take 20% of any money you receive. If you get a $4 tip and you didn’t have to do anything extra to get it, it’s still free money! Fiverr gets a $1 tip to put back into the business and make it grow for buyers and sellers.[/details]

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  • 4 weeks later...

Is there a Fiverr statistic on how big the share on gigs is which got tipped? What is the average tip value? Tipping is very unusual for online services. I believe Fiverr is the only website doing so. Personally I would never tip but would leave an extensive positive feedback if the service was indeed outstanding.

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Is there a Fiverr statistic on how big the share on gigs is which got tipped? What is the average tip value? Tipping is very unusual for online services. I believe Fiverr is the only website doing so. Personally I would never tip but would leave an extensive positive feedback if the service was indeed outstanding.

I’m not aware of any publicly available statistics on tips. Tips are limited on smaller orders since a tip cannot be over $25 if the price of the gig itself isn’t over $25. For orders above $25, the tip can be up to 100% of the price of the order. Tipping is quite common on Fiverr and it’s been around since before there was a tip system.

Buyers used to ask people if they could buy another gig to tip and sellers started to create tip extras and gigs that were a “tip jar.” Staff eventually realized that it was a norm here and they created the current tip system. I’ve seen a lot of forum posts by sellers who received tips or buyers who tipped. My guess is that $5 tips are the most common. It is for me, though once in a while I’ll get a higher one from a regular buyer or on a special quote.

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