EcommerceBytes-Update, Number 355 - March 16, 2014 - ISSN 1528-6703     2 of 6

Sellers Guide to eBay Spring Update Changes 2014

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Sellers must get used to new Seller Performance standards that are part of eBay's Spring Seller Release announced on Tuesday. eBay.com grouped the changes in its Spring Update into three buckets: seller performance standards; returns; and category and item specific updates, with the first receiving the most attention from sellers.

The changes are found on this eBay overview page. eBay Sellers in the UK also had to deal with additional changes including fee changes and changes impacting international sellers - the announcement is located on the eBay UK announcement board.

The New eBay Seller Defect Rate
eBay made major changes to how it measures sellers' performance, which are critical since eBay uses those metrics to decide which sellers get better (or worse) exposure in search results and which sellers are eligible to receive fee discounts. eBay created a new term to refer to sellers' performance: Defect Rate. Multichannel sellers noted its similarity to Amazon's Order Defect Rate, which is defined as "the percentage of orders that have received a negative feedback, an A-to-z Guarantee claim or a service credit card chargeback," which Amazon says allows it to measure sellers' overall performance with a single metric.

eBay explained last week, "Starting with the August 20 monthly seller evaluation, a new measure, the transaction defect rate ("defect rate"), will replace the current four individual detailed seller rating requirements in evaluating seller performance." The defect rate is the percentage of a seller's successful transactions that have one or more of the following "defects":

  • Detailed seller rating of 1, 2 or 3 for item as described;
  • Detailed seller rating of 1 for shipping time;
  • Negative or neutral feedback;
  • Return initiated for a reason that indicates the item was not as described;
  • eBay Money Back Guarantee (previously known as eBay Buyer Protection) or PayPal Purchase Protection case opened for an item not received or an item not as described;
  • Seller-cancelled transactions.

Starting with the August 20 evaluation, to meet eBay's minimum standard, sellers can have up to a maximum 5% of transactions with one or more transaction defects over the most recent evaluation period. A maximum 2% will allow a seller to qualify as an eBay Top Rated Seller. Only transactions with US buyers count.

eBay stated, "Consequences of falling below the minimum performance standards can include lowered search standing, limits to further selling, and in some cases a permanent loss of selling privileges." Note that Detailed Seller Ratings for Shipping Cost and Communication will not be counted toward sellers' Defect Rates.

Among the comments and concerns from sellers were the following:

  • Why should sellers be rated on shipping time, which - as Amazon learned over the holidays - is out of their control once a package is delivered to a shipping carrier;
  • Why should sellers be penalized for cancelling transactions that include those made at the buyer's request. (In its FAQs, eBay states, "a cancelled transaction does not count as a defect if we can see the seller cancelled at the buyer's request. If the buyer asks you to cancel the transaction, make sure you do so through the eBay cancel transaction process and select the correct reason for the cancellation.")
  • Why should eBay count opened cases for an item not as described toward sellers' Defect Rate even in cases where the seller has satisfied the buyer - including cases where the seller gives the buyer a full refund and lets the buyer keep the item?

Another pill that sellers found hard to swallow was eBay's policy that when a buyer revises their feedback, it will still count toward a seller's Defect Rate. eBay stated, "eBay research shows that even when agreeing to revise negative or neutral feedback, the mere act of having left the feedback is still a key predictor of reduced spending."

Many sellers are also asking why eBay is now considering a neutral feedback the equivalent of a negative feedback. In its FAQs, eBay says, "eBay data shows that buyers who leave neutral feedback, just like buyers who leave negative feedback, are less likely to purchase again." An EcommerceBytes reader posting on the LinkedIn made an interesting point. She wrote:

"A gripe I have with this whole feedback fiasco, is eBay's answer to Neutral Feedbacks being reflective of a Buyer's Negative experience. WHY have a Neutral category then!!! Doesn't require a B.S. in Business to realize that is a no brainer! Just eliminate neutral feedback as an option and only have positive and negative categories please!"

How Open Cases Impact Sellers' Defect Rates
eBay said its data showed that receiving an item that is not what the buyer expected based on the seller's listing is the single greatest cause of a buyer deciding not to purchase again or purchase more often on eBay. An opened case is a case filed for an Item Not Received or Not As Described through the eBay Money Back Guarantee or through PayPal Purchase Protection that passes checks for eligibility or fraud.

Anticipating a concern from seller, "Aren't all buyer contacts through the resolution center or eBay's member-to-member communication system counted as opened cases," eBay states, "no, opened cases are only counted when the buyer chooses: "I haven't received it yet" or "I received an item that does not match the seller's description" in the resolution center; or "I haven't received my item yet" or "Item I received is not as described" from the "Contact seller" link in My eBay." It further explained, "neither of the "item not received" options can be chosen until one business day after the estimated delivery date."

Defect Rates and Seller Protection
eBay said Defect Rates will not affect a seller's status until the seller has had "transactions with defects from at least 8 different buyers (at least 5 different buyers to impact Top Rated status) over the most recent evaluation period. That means the actions of just one buyer won't impact your status."

eBay also said each transaction is counted only once towards a seller's Defect Rate, regardless of the number of defects associated with it. "For example, if a buyer leaves you a 3-star rating for item as described and opens an eBay Money Back Guarantee case, that transaction still only counts once toward your defect rate."

And, eBay said, "Cases found in your favor don't count. Any case that escalates to eBay or PayPal for review and is found in your favor or found to be no-fault won't count against your performance rating. It won't be counted as a defect and it won't count toward your percentage of cases closed without you resolving them."

Defect Rate Impact on Search Exposure
eBay told sellers their Defect Rates would impact their exposure in its Best Match search results:

"If you maintain a low defect rate, eBay will reward you with an enhanced position in Best Match search results, so your track record for great service can pay off in more visibility and potential sales. In general, the lower your defect rate, the better your listings will do in Best Match search results. Note that many factors besides the seller's defect rate go into determining the Best Match sort order for search results including, for example, the relevance of your listing to the buyer's search and the price of your item."

When Defect Rate Goes Into Effect
eBay will implement the new defect rate as a seller performance measure in August. The August 20 evaluation will be based on transactions from May 1 through July 30, 2014, and for sellers with fewer than 400 transactions over the past 3 months, the defect rate will be calculated based on transactions over the past 12 months (from August 1, 2013 through July 31, 2014).

New eBay Top Rated Seller Requirements
eBay is taking the new seller Defect Rate and applying it to Top Rated Seller status. "Starting with the August 20 evaluation, the new 2% maximum defect rate for Top Rated Sellers will apply. This will replace the four current detailed seller rating requirements that allow for just 0.50% transactions with low ratings." The current 98% positive feedback requirement for Top Rated Sellers will no longer apply as a requirement.

Top Rated Sellers must upload a valid tracking number within their stated handling time on 90% of all transactions. Only tracking numbers from USPS, UPS, FedEx and DHL Global Express will be validated with scan information.

To qualify for the Top Rated Plus seal and the 20% final value fee discount between November 1 and December 31, listings must include the new extended holiday return option, with returns accepted through January 31. ("When you add the extended holiday return option, on November 1 your return policy for that listing will automatically be extended to January 31 for all sales from November 1 through December 31.")

In reacting, many sellers were adamant that a 90-day return policy during the holidays would not work for them. There was some concern from sellers they would lose their Top Rated Seller status if they did not offer the extended holiday returns, but that is not the case - only the listings without extended returns will be affected by not displaying the TRS Plus seal and by not qualifying for the discount. That's on a listing-by-listing basis.

Sellers who wish to add the extended holiday policy to their listings must wait until it's available in September; the return date of January 31 will then automatically be shown to buyers starting November 1. (Sellers can select which listings have the extended holiday policy, it's not an all-or-nothing proposition.)

eBay said that as was previously the case, same-day or one-day handling will be required for Top Rated Plus listings, and a 14-day or longer money-back return policy will continue to be required when holiday returns are not in effect.

Warning Notices from eBay
eBay wants sellers to get up to speed on the new seller performance standards, and sellers are already reporting they've received notices from eBay about their expected Defect Rates. One such email from eBay read, "Based on the last seller evaluation on February 20, your defect rate is expected to be higher than the 2% maximum allowed for Top Rated Sellers." And sellers have also reported getting notices warning their expected Defect Rate exceeds the 5% maximum allowed.

One seller who was told he needed to improve his Defect Rate to maintain Top Rated Seller status said eBay advised them to participate in the managed returns program, newly renamed "Hassle Free Returns," in order to reduce their opened cases for Item Not as Described.

Yet we noted in the FAQ, "Will returns count in the new defect rate used to evaluate seller performance," eBay states:

"Returns initiated through eBay's hassle-free returns process will count toward your transaction defect rate only when the buyer choses one of the reasons for the return related to your item description:
Missing parts or pieces;
Damaged during shipment;
Item defective;
Item expired.

Note it's the third FAQ on this eBay page about new hassle-free returns. So it isn't yet clear how the returns program would minimize sellers' Defect Rate.

EcommerceBytes Coverage of eBay's Spring Release
EcommerceBytes was first with the details of the spring release on Wednesday morning in eBay Changes DSRs in Spring Seller Update. eBay UK also announced its Spring Seller Release, which we also covered Wednesday morning in, eBay UK Rolls Out Fee Changes in Spring Seller Update.

Sellers weighed in with their comments and questions on the EcommerceBytes Blog - there were 6 pages of comments by the end of the day (it's now up to 9 pages as of this writing).

EcommerceBytes Contributing Editor Greg Holden live-blogged the eBay Town Hall meeting on the EcommerceBytes Blog on Wednesday (and you can listen to the hour-and-a-half broadcast on VoiceMarketingRadio.com).

AuctionBytes Blog Editor Julia Wilkinson did an excellent job encapsulating some seller reaction on the AuctionBytes Blog.

The Seller Performance Standards overview page explains the new method eBay will use to evaluate sellers. It's recommended sellers review this page very carefully, including the FAQs. And please let us know what you think of eBay's Spring Seller Update.

Comment on the EcommerceBytes Blog.


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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