Partial Refunds for eBay Transactions – Negotiation vs Extortion

Posted on July 26, 2008. Filed under: eBay, Paypal | Tags: , , , , , |




eBay just announced new changes to the PayPal Dispute Resolution Process that have been a year in the making.

When I first read about the upcoming changes, I admit that I was less than pleased.  What struck me right away was the mention of a new process whereby buyers and sellers can negotiate partial refunds.  I was immediately agitated.  But, as I gave it more thought, I came to the conclusion that eBay / PayPal created a dispute resolution system which encouraged partial refunds because there are some unique characteristics of the eBay marketplace that make partial refunds a necessary part of the transaction process. 


I sell “New” items almost exclusively.  My items come direct from the manufacturer and so the condition of the item is not subjective.  New means new.  But I know that the eBay marketplace is the largest market in the world for “Used” merchandise.  Whether eBay will publicly admit to it or not, eBay is the world’s largest online flea market.  And whenever used items are sold, there will always be some subjectivity in the item condition and what is “excellent” condition in one person’s opinion is “fair” condition is another person’s opinion.  Online buyers are unable to visually inspect the items and touch them prior to purchasing and, as all eBay sellers know, even the most strongly worded auction descriptions which include details about flaws are usually not read by buyers.  Negotiation of a partial refund may be necessary and actually may be preferable to having the buyer returning the item, especially if it is a heavy item which would be costly to ship back.  If both the buyer and seller are happy with a negotiated partial refund then I would consider the transaction a success.


I sell new items on eBay and I don’t give partial refunds for items that are not as described.  I won’t even consider partial refunds in that case.  If a buyer is really unhappy with the product, I will offer to pay the return shipping and give a 100% refund.  I send a self-addressed prepaid label as an email attachment or I send a label in the mail to the buyer.  When the item comes back, if there is some kind of manufacturer’s defect or other problem with the item then I may even offer a gift certificate on a future purchase.  Sure I am out the cost of shipping both ways and perhaps a future discount but I have treated the customer the way I would want to be treated.  However, when the buyer starts out by telling me that there is a problem with the item but that they won’t return the item, or that it would be too much trouble to return the item, yet they want a discount … then I know that I am dealing with someone who just wants a “better deal” and I refuse to participate in that process.  I stand firmly by my offer to give 100% refund and pay return shipping but I will not give a partial refund.  If the “new” item is not satisfactory then a partial refund will not make it any more satisfactory.


I do consider partial refunds in one instance.  If a buyer purchases multiple items and states that one or more items were not included in the package then I will consider giving a partial refund as long as the buyer will submit an online postal report acknowledging that one or more items were not delivered.  Interestingly enough, no one has yet to take me up on that offer. 


Our company has 10+ years in the mail order business and we have processes in place that help us reach an almost 0% rate of error in packaging.  We are not perfect and during peak seasons, there have been times that we have made an error that was not caught during the process but that is very rare.  When someone tells us that we did not include all items in the package we are confident that we actually did send everything but, of course, we can never be 100% certain because we are human and we do make errors and there is always the possibility that their package was rifled through during transit. 


So, whenever someone tells us for example that 2 out of the 36 items were not in the package, we point them to the Postal Inspector website where it takes about 20 seconds to fill out an online report of a problem with a postal package.  An email is automatically generated and sent to the person who submits the report and we tell the buyer that when they forward that email to us which acknowledges that they have reported the problem then we will promptly refund them for the items that they did not receive.  Generally, we never hear from the buyer again and most of the time they simply leave glowing positive feedback.  


As I said, I sell new items.  But there are plenty of eBay sellers who offer collectibles not in the original box, antiques that are several years old, and used clothing among other things.  When a buyer receives one of these type items and there is a difference of opinion about the condition then perhaps a Partial Refund is worth discussing.  If the buyer is somewhat satisfied with the item, but would have bid slightly lower if they had been able to actually view the item in person, then a partial refund might still work to make the buyer happy.  If the seller feels that the offer is reasonable then both parties could still end up satisfied. 


Even though Partial Refunds is not something I would consider when a buyer tells me that their new item is unsatisfactory, I can actually see where Partial Refunds could serve a useful purpose for some eBay transactions.  But, obviously, there is a potential for the Partial Refund process to allow unscrupulous buyers to extort and abuse good eBay sellers and I think that eBay should expand their definition of Feedback Extortion to include the reporting of buyers who demand a partial refund in return for not leaving negative feedback.  eBay should also seriously take a look at buyers who have a high rate of partial refund requests. 

If sellers had some way of reporting the abuses then perhaps eBay sellers would be more willing to embrace the new PayPal dispute process which allows the negotiation of partial refunds.  The key word is “negotiation” not extortion.  eBay needs to remember that good eBay sellers want to negotiate a fair resolution but allowing unscrupulous buyers to extort sellers without any accountability will cause serious eBay sellers to draw a line in the sand and take a hard line stand against Partial Refunds.  Creating further hostility between eBay buyers and sellers would not be good for anyone.  eBay has stated many times that they want to be good stewards.   If that is true, then we can expect eBay will be putting into place a mechanism whereby eBay sellers can report buyers who abuse the PayPal Dispute Resolution Process.  eBay needs to support sellers who will negotiate partial refunds fairly, not support eBay buyers who will extort partial refunds unfairly.





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One Response to “Partial Refunds for eBay Transactions – Negotiation vs Extortion”

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I list all items according to condition as I sell used and pre-owned items. In most cases I list, for example, as “in good used condition” to highlight the fact that this is not a brand new item. I would only consider a partial refund for shipping purposes only as the buyer already should understand that they are buying a used item.

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