|Mon June 2 2014 20:23:12|
eBay Files Patent for Protecting Sellers from Chronic Returners
By: Brian Cohen
Having a buyer return an item is a bother to online sellers and can be costly as well. In a patent filing with the US Patent and Trademark Office, eBay acknowledged that how to handle buyers who frequently return items was a major concern for ecommerce sellers.
On April 24th the United States Patent and Trademark Office (USPTO) published eBay's patent application 20140114803, "Returns Frequency Index" - which could also be called, "Bad Buyer Invisible Listing Feature." The application was filed back in October 2012 but was just announced via the USPTO filing. The patent abstract explains that it is "A system and method of determining whether to make an item listing visible to a user…"
Following is an extract from the patent application which gives background and context for the filing:
"One of the biggest concerns for c-commerce (sic) sellers is how to handle buyers that frequently return items. When a buyer returns an item, the process can be quite involved. The seller typically has to arrange to have the item returned, often in packaging, restock the returned item, and return the money to the buyer. These tasks consume valuable seller resources. Additionally, when it comes to certain e-commerce sites, such as eBay, the seller not only loses the sale revenue that has to be returned to the buyer, but the seller is also typically responsible for the cost of the return label that is used by the buyer to return the item. Therefore, the seller has to pay for the buyer's decision to return the item.
"A problem arises in how to expose e-commerce sellers to potential buyers that are less likely to return items. There are a lot of people who are chronic returners. These chronic returners shop, try something they like, and, even if they do not have any problem with the item, they still return it because they have a habit of buying something and then returning it as soon as possible. This chronic returning creates a problem for sellers, particularly small sellers that do not have the resources of big retailers."
The same month that the patent application was filed, eBay launched a feature called "Report a Buyer" whereby sellers could report eBay policy violations by buyers. For the first nine months that this feature was in place (October 2012 to June 2013) eBay reported that buyer account suspensions increased by 900%.
It's disappointing eBay hasn't a provided a public update after the one year anniversary (or maintain this statistic on a quarterly basis).
Since May 2008, eBay removed the ability for sellers to leave negative or neutral feedback for buyers. While this doesn't outright prevent a seller from leaving a "backhanded compliment" for a buyer, it took away one of the most effective means for sellers to control abusive buyers from participating in their listings. Since then it has been more important than ever for eBay to manage bad buyers.
While sellers do have the ability to blacklist buyers from participating in their listings, there is a maximum of 5,000 bans which effectively neuters third party blacklisting services.
Sellers will probably be flummoxed to learn that eBay has been sitting on this Bad Buyer Invisible Listing patent application since October 2012. If it is already "baked in the cake," why not flip the switch? What's even more shocking is that eBay may be considering charging a fee to sellers to block bad buyers who are compulsively returning items to sellers.
It's eBay's responsibility to ensure a safe and secure environment for its users. If eBay were to charge a fee for buyer "trust" it would be sending a mixed message about its stewardship.
While the patent application doesn't necessarily indicate that the "Bad Buyer Invisible Listing Feature" is imminent, sellers could use this "Returns Frequency Index" filing as leverage to petition eBay to roll out the feature. What's the point of filing a patent application with USPTO unless the idea is under consideration?
Following is an extract from the Detail Description of the filing:
"The present disclosure provides a way for sellers to protect themselves from buyers that frequently return items. A returns frequency index can be calculated for a buyer. This returns frequency index is an indication of the risk that the buyer will return an item. This returns frequency index can be calculated using data from the buyer's transaction history, such as the total number of items returned by the buyer, the total value of the items returned by the buyer, the total number of items purchased by the buyer, and the total value of items purchased by the buyer. A seller can restrict the visibility of his or her item listing to buyers who have a certain returns frequency index, thereby preventing buyers who do not meet the seller's standard for the returns frequency index from viewing the seller's item listing. This visibility restriction based on the returns frequency index provides the seller with increased protection from the item being purchased by a buyer who is likely to return the item. This program of item listing visibility can be offered to sellers as an option, and in some cases for a nominal fee."
Would you like the ability to hide listings from bad buyers? Let us know your thoughts below.
About the Author
Brian Cohen has been an active member of the eBay community since May 1998, and he currently trades under the member name Bidofthis.com. His first AuctionBytes article was published in May 2002. Brian's reporting on Bitcoin in 2013 has been referenced in numerous publications including The Register, Tech Week Europe, TechCrunch and PC World. Brian can be contacted through his website at BidofThis.com where he always has a "little Bid of This and little Bid of That."