|EcommerceBytes-NewsFlash, Number 1271 - May 03, 2006 - ISSN 1539-5065 1 of 4|
Over the past month, eBay sellers on U.S. discussion boards have been discussing the problem of Chinese "BIN bandits" on eBay. The problem described by posters is that newly registered, zero-feedback members from China are buying BIN (Buy It Now) items from eBay sellers in a systematic fashion, and not following through on the transactions.
Some believe the BIN bandits, who are targeting designer items, are harvesting the names of those sellers in order to send them emails advertising their product-sourcing services.
"I have had several spam e-mails wanting to know if I am interested in selling fake designer purses and clothing," said one aggravated seller whose listings had been struck by BIN bandits. "I'm so thankful that eBay is spending all of our millions on advertising to build up eBay in China. It's been a great contribution to our community!" eBay completed the integration of its auction site in China, eBay Eachnet, with its international network in late 2004, and it spent $100 million on the Chinese site in 2005.
In many cases, the alleged BIN bandits from China are registering with eBay User IDs that start with the name of a designer followed by letters. They seem to use an automatic system to create many such IDs; for example, truereligionsunda, truereligionsundb, truereligionsundc; and use those IDs to bid on branded items - in the case of these IDs, the True Religion brand of designer clothing.
eBay allows sellers to block bidders from certain regions, but not by country. Some sellers complain they do not want to block Asia since they have had good experiences with buyers in Japan and South Korea, and at least one seller said she's had good transactions with Chinese buyers. She said, "Not all persons from China are bad...but this one is making it hard for all the good people in China to buy on eBay."
Sellers are upset that eBay does not automatically reimburse sellers for fees when they see BIN bandits and suspend them. It's up to sellers to request a refund for listing and Final Value fees. When one seller reported a BIN bandit who was automatically registering User IDs beginning with the same letters ("Dressshirt") and whose IDs were all suspended by eBay within 24 hours, he says he got back the following reply from eBay:
"I can understand your concern regarding eBay's policies when it comes to providing credits on accounts where a bidder has backed out. Regretfully I cannot provide a promise of mass credits to accounts in this situation as I cannot see evidence that all sellers were affected in an adverse manner in this matter."
One seller alleges that in a previous BIN bandit episode that lasted over 7 months, eBay only took action when sellers flooded the California and New York Attorneys General's offices with complaints.
A member of eBay's Trust & Safety department posted on the board to inform users that eBay is working on addressing the problems raised by members on the boards. "We're looking at how to better stop fraudulent mass account registrations; if they get to the site at all, we're looking at how to prevent these users from bidding maliciously; and we're always looking to streamline the process for victims of any fraudulent activity."
He told sellers affected by bidding fraud to use the UPI (unpaid item process) to get FVF credits from non-paying bidders ("If a buyer is suspended, you don't have to wait to file a dispute"). One seller replied, "If a buyer is suspended by YOU folks, then YOU folks need to refund ALL fees, ALL of them." Another seller replied, "Anything short of an automatic FULL refund of ALL sellers fees from these mass bin bandits by eBay is definitely "at least just short of criminal." If eBay has another "affiliate" program going that encourages these bidders, then eBay should probably be considered a part of this fraud."
The eBay Trust & Safety representative also suggested using eBay's Buyer Requirements settings. The Marketplace Safety column in eBay's April issue of "The Chatter" newsletter contains information about setting buyer requirements (http://pages.ebay.com/community/chatter/2006April/marketplacesafety.html).
Finally, the eBay representative suggested using immediate pay with fixed-price and BIN listings. (Immediate Payments requires buyers to use PayPal to pay for their items before they win the item, unlike other cases in which users win on eBay first, then pay for the item). The suggestion elicited this response from a seller:
"You aren't seriously suggesting that every ebay seller should use Immediate Payment Required on their BIN's ....are you ? What about the sellers who don't accept Paypal. What about sellers who have their own Merchant Checkouts? Would that work for them? What about sellers who only sell things worth tens of thousands and prefer not to use Paypal. What about the sellers who offer shipping discounts? They can't provide a proper invoice if their buyers have to pay "immediately". What about the Pay Now glitch that's plagued ebay for months now? Buyers go to pay and they get an error page. How does that help the Immediate Payment Required sellers?"
The eBay Trust & Safety representative did not return to address sellers' questions and concerns.
AuctionBytes asked eBay spokesperson Catherine England in an email about the problem. In response to why eBay would not automatically refund sellers for BIN bandit buying sprees, she said, "eBay has no way of knowing if an item has gone unpaid unless the seller reports it to us. Sellers must allow buyers seven days to pay for an item before filing an unpaid item claim. If a buyer has been NARU'd for any reason a seller can immediately file a claim."
When asked why eBay sellers can not block bidders by country, only entire regions, England said, "This functionality is based on site usability and keeping the SYI form as simple as possible. Most sellers approach this process with the sale and shipping terms in mind and since shipping tends to be more of a regional function than a by-country-function we've kept the process regional to keep the SYI form from becoming too complicated."
Some eBay sellers have speculated that the BIN bandits might be members of eBay's affiliate program who receive generous compensation for sending new bidders to eBay.com. In the U.S., affiliates can earn between 40 - 70 percent of eBay's revenue on winning bids or Buy It Now transactions within 7 days of an affiliate action. Affiliates also earn between $12 and $20 for each new active confirmed registered user (ACRU) driven to eBay (http://affiliates.ebay.com).
AuctionBytes asked England if eBay allows Chinese members to participate in its affiliate program, and whether that might that be a motivation for BIN bandit activity. She said, "The parameters of our affiliate programs do vary by country. Regardless, any affiliate violating our policies wouldn’t be allowed to remain an affiliate for very long."
England said eBay has risk analytics in place to minimize malicious bidding on the site. "We also stipulate buyer activity limits that are designed to minimize Unpaid Items while supporting legitimate purchases. Here's a link to more information on buyer activity limits: http://pages.ebay.com/help/tp/activity-limits.html ."
"The best way for sellers to protect themselves," England said, "is to require immediate payment on BIN items and/or consider using buyer requirements."
AuctionBytes first wrote about the problem of BIN Bandits on eBay in 2004 (http://www.auctionbytes.com/cab/abn/y04/m11/i23/s01).
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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