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I assume that $32 is over that line.

There is an easy way to cure the guy of this. Buy yourself a cheap scuttle by hitting "buy it now" and then filing a dispute with eBay over the shipping charge. eBay will force him to charge a...

Of course he is, and he admits it.

According to the eBay website. the policy on fee circumvention for shipping is as follows:
Unreasonable shipping or handling costs - The seller may add a...

He's not working a loophole, he is violating eBay policy and is stealing.