Feb
18
eBay Feedback Changes in Context
Filed Under Feedback
One of the big changes coming to eBay over the next few weeks involves the feedback system. Effective in May, Sellers will not be able to leave negative feedback on bidders.
This was done in attempt to fix the retaliatory feedback problem. Retaliatory feedback, or the threat of it has crippled eBay’s feedback system. Many eBay sellers are very upset about this change. Quite vocally upset.
Given the controversy, it might be useful to remember the purpose of the eBay feedback system. According to a paper* published by researchers at the University of Michigan, “reputation systems like the Feedback Forum can improve the efficiency of marketplaces in three ways:”
Signals. A seller’s feedback history can serve as a signal to buyers of how risky it is to purchase from that seller. This allows each buyer to choose sellers, and how much to bid, based on the buyer’s level of risk aversion.
Sanctions. Sellers will strive to avoid negative feedback, in order to avoid adverse future impacts on their sales.
Selection Efforts. Because buyers will be better able to distinguish high quality from low quality, high quality sellers will not leave the market. Indeed, the low quality and fraudulent sellers may be driven from the market, leaving a higher overall quality level and less risk even for those buyers who do not carefully monitor the signals about trustworthiness of individual [sellers].
I’ve posted a couple of times before, about how bidders are willing to spend more money if we reduce uncertainty and present less risk. They face uncertainty (and risk) in two main factors:
- The quality of the product
- The quality of the seller
I pointed to several studies that showed how much additional pictures are worth (as indicated by increased final sale prices) to bidders because they reduce risk associated with the quality of the product. How much more would a quality feedback system be worth to bidders in final sales prices? If adding additional pictures to your listing increases final bid prices, it follows that a feedback system that effectively reduces the bidder’s uncertainty about your quality as a seller should do the same for you.
The three factors of an efficient reputation system – signals, sanctions, selection efforts – are certainly something that every reputable seller would desire. However, they are only going to be effective if the feedback system works.
It doesn’t work in its present state. How many sellers refuse to leave feedback first? This tactic has become quite common these days. Sellers who do this justify that it is to protect themselves against unwarranted negative feedback left by buyers. At best, this practice is a simple form of intimidation.
Sellers need to accept the fact that they are not going to have a perfect feedback score anymore. For the feedback system to work, we need a system in which a 98.6% feedback score is not indicative of a lousy seller. All sellers are going to subject to the new system, and the good sellers will naturally rise to the top. It will be easier for bidders to distinguish those sellers that give the rest of a bad name. Who should be nervous? If you are a quality seller, you shouldn’t have to worry.
I think the change means more money for quality sellers.
* Khopkar, Li and Resnick, “Self-Selection, Slipping, Salvaging, Slacking, and Stoning: the Impacts of Negative Feedback on eBay,” EC ‘05, June 5-8, 2005, Vancouver, British Columbia, Canada.
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2 Responses to “eBay Feedback Changes in Context”
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Interesting viewpoint but there were many other ways to fix the problem of retaliatory feedback. I would bet money the vast majority of negatives from sellers are given with automated like-for-like programs. Ban the programs and the vast majority of the problem goes away.
eBay has been pounding the ‘buyer trust’ button for months. Almost every new policy is touted to impact bad sellers. Added this to the fact that eBay will not NARU high volume sellers regardless of bad they are, I think they have shot themselves in the foot. People are suspicious, they know eBay is full of bad sellers, eBay keeps telling them so.
As of May 1st buyers will not only be able to hit sellers in the DSRs but feedback also. That is FIVE hits. All of which have severe penalties affecting search, threatening PS status. If I am a low volume seller ONE ticked off customer who wants a refund but will not return the item can pretty much put me out of business. Ask me how I know.
Either use rephrased DSR’s OR no feedback for sellers otherwise it is just not worth it. Why pay fees when your listings get no visibility?
What is next? I predict sellers will stop leaving feedback and eBay will start leaving it for them.
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I think the feedback change is a good thing. There are sellers selling useless wholesale lists and they have 100% feedback, isn’t suspicious to anyone?
The only thing a seller should care about is if he gets paid or not.
Most buyers are honest and they pay so it’s all good. Few don’t pay and very very very few are scammers. In those cases, you can always report to eBay. You can blacklist them. You should automatically blacklist buyers with 0 feedback in the first place. If the buyer is really bad, you can even submit their ID’s to http://www.rottenbidders.com - a site where sellers share their bidder blacklists.