EcommerceBytes-NewsFlash, Number 1453 - January 16, 2007     1 of 4

eBay Members Fear New Policy Will Inhibit Buyer Bids

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eBay's new "Safeguarding Member IDs" (SMI) policy is coming under scrutiny from users who are concerned it will decrease bidding activity on the site. In recent days, members began noticing that when they looked at an eBay auction, they were unable to see bidder User IDs once the bidding had reached $200. Some fear eBay's new policy will have the unintended consequence of increased shill bidding by dishonest sellers, as well as decreasing bidding by buyers concerned about the lack of transparency.

Laurie Farnam, who buys and sells antique furniture on eBay, said, "No way will I get involved if I can't review a bidding history." Farnam said she has never gotten involved in eBay politics, "but I am now. I'm anxious, I'm angry."

eBay launched the SMI policy in an attempt to reduce fake "Second Chance Offers." eBay's Senior Vice President of Global Trust & Safety Rob Chesnut stated that the policy was a "significant step forward in protecting eBay's bidders, who have increasingly become targets for unwanted commercial and malicious spam, such as phishing, spoof, and fake Second Chance Offers." But eBay users like Farnam have questioned why eBay has kept the Second Chance Offer feature given its usage by scammers.

Farnam is an avid clock collector. Her most expensive eBay acquisition was a mantel clock she purchased for over $600 - "a mistake," she said laughingly. She sells some of her collection during lean times - her highest price for a clock sale was over $900. "I still miss it."

Farnam, who has studied the new information eBay provides in place of Bidder IDs, said it's not enough. "You can pick up a scent if someone that's not righteous participates in the auction. I've been burned, and you get an antenna that goes up when you've been burned."

Farnam, who joined eBay in March 2000, said she is also concerned about the message eBay is sending by applying the policy to high-value items only - the policy hides bidder IDs once bidding reaches $200. "So a $1.00 difference in price at $199 doesn't require protection from the bad guys?"

Some users are skeptical that eBay's shill-bidding detection system is adequate, and many rely on their own research to make bidding decisions.

Ken Walton, author of "Fake: Forgery, Lies, & eBay," said he believes eBay's fraud detection is more stringent than when he was selling artwork on the auction site. His book chronicles his exploits as a participant in the biggest known shill-bidding ring on eBay. Walton said masking the identities of bidders would have made it easier for him, and said, "we might have fallen under the radar." Instead, Walton and his cohorts were exposed by their eBay trading partners. Walton pled guilty to fraud in 2001.

Walton said that while ultimately the new feature may not lead to an increase in shill bidding, it will make it easier for those sellers who do use shills to escape detection.

eBay's Chesnut said in his board announcement that eBay has invested heavily in shill detection systems. "We can proactively detect and investigate possible shill bidding scenarios with a higher rate of accuracy than ever before. These backend systems collect more information on selling and bidding activity than our Community has access to, so we can detect patterns and ascertain identities much more accurately" (http://www2.ebay.com/aw/core/200701081004422.html).

eBay is hosting top sellers at its annual Ecommerce Forum this week in San Jose, where eBay North America President Bill Cobb is scheduled to webcast his keynote address in which he may reveal additional initiatives.


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 ina@ecommercebytes.com.


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