Shipping Charge Issue on Ebay?

I recently purchased an item on ebay and was charged $3.95 for shipping. When I recieved my package however I notice the seller only spent $1.56 to send it to me. Is the seller allowed to do that? I think that seems a little unethical and wary of shipping charges as I notice certain sellers charge upwards of $14 for shipping is this some sort of ripoff and why does ebay allow that??