|Thu Dec 13 2012 20:43:20|
PayPal Quietly Tests New Seller Performance Metrics
By: Ina Steiner
PayPal confirmed it is beta testing a new feature called PayPal Performance Benchmarks, but a spokesperson told us today the company was not providing details at this time. However, after speaking to a seller who is part of the stealth testing, it appears there's a conflict with what eBay is pushing sellers to do (accept returns) and what PayPal considers risky practices (issue refunds).
PayPal monitors sellers using a number of metrics, including disputes, refunds and chargebacks. The new Performance Benchmarks feature lets sellers how they're performing compared to "industry benchmarks."
One metric, for example, is called the Refund Rate. PayPal explain on the site (visible to those who are part of the beta test), "One way we measure customer satisfaction is to look at the percentage of your total transaction volume that you refund. Compare your 30-day average to the PayPal benchmark, then click Ways to Improve for tips on minimizing refunds."
The tool then provides the seller's 30-day average refund rate, the "benchmark" (Less than 3.00), and the Status (for example, it might say, "Your refund rate is low. Well done!").
However, PayPal has not announced the Performance Benchmarks and has apparently not informed participants. An eBay seller who is part of the beta test was surprised when he logged into PayPal and saw the new feature. "Today I logged into PayPal and noticed a PayPal Performance Benchmarks link. After clicking I saw that I am being rated against PayPal Benchmarks for Disputes, Number of Refunds and Refund Time. PayPal now has Seller Ratings?"
"It's a little too soon to tell exactly what to make of it," said the seller, who wished to remain anonymous. "I suppose if they are going to be used to help sellers and not penalize them then it would be a good thing.
"However, with eBay's new push towards longer return periods, and making returns easier with the new system, I think rating sellers on number of refunds is out of line."
The seller explained that since he extended the return period to 14 days and opted in to the new system, his returns have increased. "The returns all could have been avoided if the buyer had actually read the description. If eBay / PayPal wants easy returns for buyers then they shouldn't be rating sellers on refunds. Most of the time returns have nothing to do with the seller's business practices."
The seller also wrote, "I can't judge the ease of use and accuracy until I have some data to analyze. It would have been nice to have gotten a heads up and some explanation from PayPal!"
Tomorrow's Newsflash has more on this exclusive scoop - here's a link to the EcommerceBytes article.