eBay Stirs the Pot With Seller Feedback Ban

eBay (Nasdaq: EBAY) has taken the controversial step of banning sellers from posting negative comments -- or even giving neutral feedback -- about the buyers with whom they do business. The new rule, which will take effect in May, is apparently a reaction to sellers flaming buyers who posted negative information about them.

eBay's announcement of the rule change earlier this week prompted a tidal wave of complaints about sellers from buyers -- who, not surprisingly, support the new rule.

It also sparked criticism of buyers by sellers -- some of whom are threatening to boycott the feedback option all together.

Members of both groups have expressed ire over eBay's inability or unwillingness to do a better job mediating buyer-seller disputes.

Sellers fear they will be held hostage to vindictive buyers who will still be allowed to post negative comments about them. However, "there are new protections being put into place for sellers as well," eBay spokesperson Nichola Sharpe told the E-Commerce Times.

eBay's new policy will include removal of negative feedback from buyers who did not pay for their goods, for starters. It also will require a buyer to wait three days following completion of a transaction before posting a negative comment. This is to guard against impatient buyers who may have unrealistic ideas about shipping speed.

Firestorm of Complaints

eBay decided to impose the restriction against sellers' negative comments because it found that the transparency made buyers reluctant to provide honest feedback, Sharpe said.

That may be an understatement. It is not difficult to find buyers unhappy with their eBay experience precisely for that reason.

Jennifer Goodwin, founder of an online business administrative service, told the E-Commerce Times that she has bought at least two items -- a US$5 bed light for reading and a designer sweat suit -- with which she was unsatisfied. After her first experience of receiving unfair seller feedback, she decided to avoid the entire process altogether.

With respect to her first purchase, the seller never sent the item, "and then acted like a crazy e-mail maniac, complete with harassing threats," Goodwin said, adding that eBay suspended the seller but left the negative feedback associated with her username.

She did receive her second purchase -- but said it wasn't the right size and was clearly not a designer brand.

"I am too scared to leave negative feedback," Goodwin admitted. "I want to be fair and truthful but not at my own detriment. So the item sits unused and money is wasted." Goodwin, needless to say, was very happy to learn of eBay's new rule.

So was Dan Pritchett, vice president of marketing and business development at Logos Research Systems, a maker of Bible study software -- even though he no longer uses eBay.

A few years ago, Pritchett saw a copy of his company's software offered on eBay and bought it, suspecting it was a pirated version. He was right, he told the E-Commerce Times, but playing his hunch proved to be more trouble than it was worth.

When contacted about the legitimacy of the sale, the seller began a calculated campaign of harassment, culminating with mailing gay porn to Pritchett at his workplace.

eBay was unsympathetic to his problems, Pritchett said, and even shut down his account because of the seller's accusations.

Sharpe said she could not comment directly on Pritchett's situation for privacy reasons. However, she emphasized that eBay fights aggressively against software piracy through its Verified Right Owners Program.

"We don't want pirated information on our site," she said. "It's as simple as that."

Quid Pro Quo

Even if a buyer doesn't have a horrific experience with a seller, there is an unspoken assumption of quid pro quo that makes many buyers uncomfortable, Anthony Citrano, who uses eBay to buy and sell photography, told the E-Commerce Times.

"Many sellers ... do not leave positive feedback until they have received positive feedback on the transaction," he said.

"When a buyer pays for the item but has not received it, the buyer has completely fulfilled their obligations to the eBay community. Thus, they should receive positive feedback. They bought and paid for the item," Citrano reasoned. "However, sellers play this game of 'feedback hostage,' where they hold out the specter of no feedback or even negative feedback."

That's what happened to Citrano. "I merely left a neutral piece of feedback on a lame seller and was immediately hit with negative feedback -- despite having paid for the item within an hour after buying it."

The Power of Word of Mouth

It's easy to understand the flood of emotions eBay's new rule has unleashed, said Michal Ann Strahilevitz, a professor of marketing at Golden Gate University, who does research on the influence of word of mouth.

Its power "is undeniable," she told the E-Commerce Times. "While companies are focusing great efforts to work on spreading positive word of mouth, it turns out negative word of mouth is even more powerful, and more companies are realizing they need to put as much, or more, effort in reducing negative customer feedback."

It is unfair to give buyers this powerful leverage over sellers, Strahilevitz concluded.

Indeed, eBay sellers are voicing their own strong opinions about the rule change. "This will have devastating effects on the whole feedback system," Nancy Baughman, founder of eBiz Auctions, told the E-Commerce Times.

It is not this change alone, however, that is making sellers so unhappy, she noted. eBay recently instituted a new fee schedule and other rules that sellers feel are detrimental to their operations, if not margins.

The new feedback rule is particularly obnoxious because it gives buyers' absolute power, Baughman said. "Human nature being what it is, people will use the system to take out their frustrations on things that are out of the seller's control."

Also, the system now leaves sellers completely vulnerable to buyer fraud. She told of one buyer who purchased a $1,200 camera from her -- then contacted her to say it was broken and needed $250 worth of repairs. If she didn't send the money, he threatened, he would post negative feedback about her.

After tracing this particular buyer's activities on eBay, Baughman realized such demands were part of his MO. "He would buy something, claim it was broken, and then turn around and resell it on eBay," she said.

He was also 17 years old, Baughman subsequently discovered. She put a halt to his activities after contacting the boy's mother.

Sellers are likely to boycott the feedback system once the new system is in place, Baughman said. "If we can only leave positive comments, then we won't leave any comments at all."

She would have preferred a modified change to the feedback system to give sellers some voice in the process, as well as a more concerted education effort on the part of eBay so that buyers could better appreciate how the system works.

Working It Out

Improving communications between buyers and sellers would also go far in settling disputes when they arise, Cody Goehring, a publicist for Phenix and Phenix Literary Publicists, told the E-Commerce Times.

A few years ago, when he was studying for the LSAT, Goehring bought a prep CD pack from an eBay seller. "When I got it in the mail, I realized he had sent me the 2005 version, not the 2006 version as promised. When I contacted him about this, he never got back to me."

Goehring gave him a poor rating, and saw a few days later that the seller had given him a poor rating as well -- presumably in retaliation for his initial feedback.

"However, his bad rating encouraged me to do some research, and in doing so, I discovered that his primary e-mail address wasn't the one that he had registered with eBay/PayPal, which is why he never got back to me. After contacting him, he explained the story to me of why I got the 2005 version," Goehring said. They ended up rescinding their poor ratings of each other.

"Because of my experience, I can see both the bad and the good sides of this new policy," he said. "Sellers will no longer be able to retaliate with poor ratings when buyers rate them poorly, and this will allow buyers to give poor ratings -- if accurate -- without fear of getting a poor rating back."

The disadvantage, though, is that without the poor rating from the person who sold him the LSAT CD, "I would have never realized that the problem wasn't entirely the seller's fault. This allowed us to work together to resolve the problem, instead of both of us being mad at each other."