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.”
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]