Feedback Extortion – A Difference of Opinion

Posted on August 28, 2008. Filed under: eBay | Tags: , , , |

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The definition of eBay Feedback Extortion has been widely debated and there are varying opinions about what actually constitutes feedback extortion.   According to the eBay website, below are some examples of what eBay says constitutes feedback extortion:  

Examples of Feedback extortion

  • A buyer purchases a vehicle, and along with their payment sends an email stating, “If you don’t include high performance tires and rims at no additional charge I will leave you negative Feedback.”
  • A seller receives payment from a buyer and then tells the buyer, “Leave me positive Feedback or I will not ship your item.” 

Examples that aren’t Feedback extortion

  • A buyer pays for an item and waits several weeks for it to arrive.  The buyer then emails the seller, “The item is already late, if it is not here by tomorrow I will leave you negative Feedback.”
  •  A buyer receives an item and decides the item is significantly not as it was described in the original listing.  The buyer threatens to leave negative Feedback unless the seller allows them to return it for a refund. 

Sellers on eBay need to understand a few things about how eBay feedback extortion and PayPal protection works:

1. Buyers who purchase an item on eBay have a reasonable expectation that the item will be delivered intact and in the condition stated.  That expectation is supported by eBay’s feedback extortion policy (buyer can return an item that is not as described and a broken / damaged arrive is not as originally described) and that expectation is also supported by the Paypal buyer protection policy.  A seller can require the buyer to pay insurance, can include insurance in the cost of shipping and handling, can make insurance optional, or offer no insurance protection at all.  However, no matter how a seller chooses to handle insurance, the buyer is NEVER responsible for an item that arrives damaged and a buyer that refuses the optional insurance is still entitled to have their item delivered to them intact.  No exceptions. 

2. Even if there is a “No Returns” Policy stated, any buyer who pays with PayPal can still get their money back if they return the item.  If it is a buyer’s opinion that an item is not as described then PayPal will allow them to return the item for a full refund and eBay’s feedback extortion policy supports the buyer’s right to do so.

The policies regarding damaged items and returns are pretty clear-cut.  Sellers who provide good customer service know that it is not in their long-term best interest to avoid taking responsibility for items damaged in transit or for incorrectly describing an item.  And eBay sellers who would rather not provide good customer service are required to do so if they want to be allowed to continue to accept PayPal and to sell on eBay. 

Beyond the clear-cut policies regarding damaged items and returns, there is a wide open space of customer service issues which are handled in a multitude of ways by different sellers.  It is that wide gray area of space that is the subject of much debate.  And, often there is a fine line between poor customer service by a seller and feedback extortion by a buyer.  It is in this difficult area that good (calm, polite) communication can be the difference between a seller who perceives they are being extorted and a buyer who believes they are getting ripped off versus two parties to a transaction working together to resolve their differences.

Many long-term eBay buyers have had a poor track record of choosing good sellers.  They have for years chosen to buy from the cheapest seller, regardless of the seller’s poor feedback from other buyers warning of problems, and then are angry and frustrated when they have a poor buying experience.  And those many poor experiences taint their feelings about all sellers, even the good sellers with outstanding feedback.  So, at the first hint of a problem (real or perceived), the buyer goes straight into escalation mode and begins threatening a seller with negative feedback without fully explaining the problem or giving the seller a chance to respond.  Many times, the seller then sees the buyer as completely irrational and as having a complaint without merit and often times assumes a defensive stance. 

What is so predictable is that when buyers fly off the handle with us and we simply do not understand their extreme anger and frustration, we pick up the phone and call them and we are able to resolve it amicably almost every time and, many times, with the buyer apologizing profusely for their outburst.  When good buyers meet up with good sellers, the situation can be defused with a little work and both parties can still have a positive view of the transaction.  What could have been potentially viewed as feedback extortion (from the seller’s perspective) or poor customer service (from the buyer’s perspective) is really neither of those.  But poor communication from either or both parties can make it seem like there is a bigger problem when there really is none.

The real difficulty, however, occurs when a good eBay buyer comes in contact with a bad seller or when a good eBay seller interacts with a bad buyer.  Prior to summer 2007, there were really no requirements that you had to be a good seller or even a marginal seller in order to offer your wares on eBay.  That has changed and it has changed in a big way.  With the enforcement of eBay seller requirements now and the buyer’s newly granted power to leave honest feedback without fear of retaliation, the eBay site is being cleared of many not-so-good sellers along with a few good sellers.  So, eBay is making the marketplace an unwelcome site for poor performing sellers.  It would seem reasonable to expect the good sellers who are welcomed on the site would be pleased that some of the competition is gone and that buyers would have a more satisfying experience and thus would be more likely to come back to the eBay marketplace in general.  But, most good eBay sellers are not currently happy because (1) the number of buyers has not increased and the quality of current eBay buyers has not improved and (2) the bad buyers, who previously targeted mostly bad sellers, are now more frequently targeting the good sellers.

Generally the poor performing sellers were the ones on eBay with the lowest prices.  After all, these sellers had to do something to entice buyers to purchase from them, a risky seller with poor customer service.  And now that there are fewer sellers offering below-wholesale pricing, the buyers who are accustomed to getting the outstanding deals are looking to extort the good sellers into lowering their prices.  The extortion is not the clear-cut example eBay uses where the buyer wants extra tires and rims but rather it is less clear-cut and sometimes more subtle.  Some buyers ask questions in advance about how they can get a lower-than-stated price but many buyers purchase items and then boldly demand a discount after the fact.  Just this week I had a buyer tell me that he expects a discount and that I could just look at it as part of a “frequent customer discount” reward program to thank him for his 3rd purchase from me this year.  Buyers frequently ask for discounts on the product price, further discounts on my already-generous posted combined shipping discount rates, upgraded shipping for free, and a whole host of strangely worded requests for free items among other things.   Of course, then there are buyers who demand I take alternate payment forms and demand that I ship same day or “else face negative feedback”.  Never mind that I clearly state my terms for payment and my handling time. 

Unfortunately for me, most of the “requests” for price reductions, shipping upgrades, free items, and changes in the terms of service occur AFTER the buyer purchases the item.  So I am unable to simply ignore these requests and I am stuck having to explain that I can’t honor their requests for free, free, and more free stuff.  While I estimate that about 10% of the buyers are the ones who make requests, sometimes bordering near harassment and extortion, it is those 10% of the buyers who consume more than 80% of the time I spend answering emails and dealing with customer service issues.  There is a reason why good eBay sellers are exhausted and why they feel extorted, threatened, and harassed by buyers.  And while I have always had buyers ask for extra stuff, the frequency of those requests have more than doubled in the last 2 to 3 months.  While I don’t have any concrete evidence that the increase is due to the new eBay policies, other than some buyers specifically telling me things like “the new rules require you to ship for free” and similar kinds of comments, I don’t believe it is a coincidence that the increase has occurred at a time when eBay is encouraging the buyer to leave unfavorable feedback when they are not happy.

Until recently, eBay had informed sellers that negative feedback would NOT be removed even in cases where there was clear-cut evidence that buyers had violated the feedback extortion policy.  However, after my online interview with Griff from eBay where Griff stated that negative feedback was in fact being removed when a seller was extorted, I received an email an eBay Trust & Safety Specialist who admitted that the information being sent to sellers about non-removal of feedback was in fact being sent in error.  And I have been informed by the Specialist that the information has now been changed.  eBay has stated that they do not tolerate feedback extortion.  But sellers and eBay don’t see eye-to-eye about the actual definition of feedback extortion, and what actually constitutes extortion.  And because I sell in a number of different categories on eBay I also notice a unique phenomenon in that buyers in some specific categories are actually (as a group) more likely to extort, harass, and threaten sellers.

Given the increased resources that our company is having to devote to the bad buyers on eBay, we are finding it increasingly more difficult to provide outstanding customer service to the really good buyers.  And that is where the sellers need eBay’s help.  If eBay really wants to help sellers provide the best customer service possible then they will take steps to prevent buyers from taking unfair advantage of sellers. 

1. eBay sellers should be able to cancel a transaction with a buyer who requests or demands a change in the terms after the fact.  If eBay allowed sellers to void transactions without the consent of the buyer (unlike a mutual withdrawal where both parties agree not to complete the transaction), but not receive a final value fee credit for the transaction and also not allow the buyer to rate the transaction, then sellers would only cancel transactions for which they truly felt extorted since there would be a financial cost for the seller to do so.  The seller would obviously have to feel they could possibly lose more if they complete the transaction than the amount of final value fees that they would definitely lose by voiding the transaction.  eBay could limit the number of times a seller could use the “void” option each month based on a seller’s volume.  Sellers would then avoid doing business with the worst offenders and would have more time to focus on taking care of the good buyers.

2. eBay sellers should be allowed to anonymously report buyers who ask for a change in terms after the fact.  eBay would not need to investigate these individual “complaints” but if multiple sellers report the same buyer then eBay could have some type of process whereby they could help to educate the buyer about the proper procedure for buying on eBay. 

The amount of time an eBay seller has to spend for each transaction on eBay is simply outrageous.  And time is money, as everyone knows.  eBay can help sellers improve their bottom line and provide a better buyer experience for the majority of eBay buyers.  To do so, eBay will need to take steps to curb the increasingly time-consuming abuses being committed on sellers by a small number of buyers. 

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