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Fri July 11 2014 18:37:20

The Unintended Consequences of eBay's New Defect Rate

By: Reader

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Dear Ina,
Here is sad but funny story about eBay policies that do not make sense.

All the sellers are terrified of new monster called defect rate, right? (I am among those sellers, due in part to my own stupidity and in part to not knowing what will be thrown at me by eBay, the main part of defect rate that will affect me is too many refunds that will be counted retroactively for the last 12 months.)

So, I sold something last week. Upon final inspection prior to shipping to my buyer after she paid I realized that the item has defect on it that I failed to notice when I listed it a year ago. I realized as well that almost no matter what I do right now, I will get a defect on my transaction. However, my buyers are more important to me then eBay and their rules designed to throw me off the ship. I have to make sure my buyers are satisfied and happy, and it should not affect them what eBay throws at me.

So, I came up with three possible ways to solve this issue with my buyer:

1) Contact buyer, explain my mistake, offer partial refund to keep enough for shipping, but offer to send the item to them anyway.

2) Contact buyer, offer them to choose anything up to $100 (they paid $17.00) item from my store that is in the same category they bought from and ship them that in replacement.

3) Ship item as is and hope that won't notice a defect. If they do, apologize, and refund then.

Considering my options I knew that #1 and #3 definitely will earn me a defect, #3 will get me upset customer and most likely will earn me a defect as well. That's when #2 option popped in my head. Hey, my buyer will get more expensive item, I won't have to refund, I won't get a defect. I lose money but keep my customer happy and my standing will be the same.

Mind you, due to my situation as I explained above, one more defect won't make much difference. I think I am done on eBay come august 20. So, I decided to experiment.

I emailed my buyer apologizing profusely, giving her two options. I waited almost full day for her response. She never responded. If I would wait any longer, I would not be in compliance with shipping rules of creating label and shipping within my stated 1 business day of payment.

So, I decided to ship the item to her. I created a shipping label, and then went to PayPal and refunded her the full amount. Which means I am shipping her defected item knowingly, but it could easily be fixed and she is getting it for free even with shipping on me. I sent her a message afterwards to that affect stating that she should expect her item within couple days. I included a note in the package explaining a defect, apologizing, telling her that the item is hers to keep for free.

eBay clearly sees item shipped and two days later delivered, but it sees a refund as well. However, I never requested my final values fees by that point either. Today, three days after she received her item, eBay shows new defect on my account from that transaction. I never heard from the buyer in all this time - between her payment and my shipment, after my shipment and refund, or after she received her item. Deafening silence.

After I see a defect on my account for that transaction, I just went to eBay and requested my final value fees back.

Now I am thinking to myself. Maybe in the future in the similar situation I should choose choice #3 as a seller: send an item on its merry way, and hope the buyer won't notice a defect.

If I would not care about my buyers I might if this happens again before eBay kicks me to the curb. I mean, I can only get one defect per transaction, and if I attempt to make it right for buyer I will get defect anyway (unless they agree to let me send them a more expensive replacement - I did not have an equal priced product in my similar inventory and all my items are unique), I am stuck with defect regardless, so why not hope they would not notice?

If buyer will notice, they open a case against me, I refund them then, and I have the same defect. But what if they don't notice? I might escape defects and survive.

Sadly, that's what kind of mentality eBay forces us as sellers, fearful place where, instead of thinking of buyers, we have to think of our survival and hope for the best. How many people would do that in hopes to continue to sell on eBay? And why should we be terrified of this, instead of continuing to provide excellent customer service and not have to fear dictator over our head threatening our business for making things right with our buyers?
Liz




Comments (89) | Permalink

Readers Comments

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

by: Jerseygal This user has validated their user name.

Fri Jul 11 19:05:07 2014

LOL, I too, have encountered this problem, as I sell clothing also.  And I too, came up with the exact same solutions.  And, like you, never heard back from my customer.  So, I chose the same option that you did.  I too was charged with a defect just because I refunded the customers money.  My customer essentially got the dress for free, and was very happy about it.  I did pursue this with Ebay Customer Service through 4 levels... and in the end since they promised to call me in 3 days, I agreed... Their method of contact was not a phone call.  It was an email which FALSELY stated that the transaction was cancelled by me because I did not have the item.... totally NOT what I discussed through 4 levels of customer service while  on and off HOLD for 3 hours.... And Ebay will win... ask me if I want to deal with the aggravation of doing it all over again.  There are other places to sell, and I am doing well at the other venues, for far less fees.  Ebay will end up being a clearance outlet for defective goods, like Marshalls, and Burlington.  And if that is the vision of the fearless leadership, so be it.  We will all be somewhere else, and Ebay will go the route of My Space, AOL, and the like.  And we will all say, ''Remember when... ''  

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

by: azkai This user has validated their user name.

Fri Jul 11 20:55:01 2014

I am wondering if this would've worked: Maybe mark the item as sent (keeps the ebay system happy), but don't send the item. Instead contact the buyer directly using their email address on the Paypal transaction and tell them that the item is damaged and a refund is on the way.
Use the 'send money' function at Paypal and not the 'refund' function to send the money.
Assuming the buyer accepts this, and assuming you don't request a FFV refund, the ebay system still thinks everything is ok. (And also assuming that marking the item as sent doesn't cause a problem).

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: iheartjacksparrow

Fri Jul 11 22:57:26 2014

@azkai - I see a potential problem with your idea: If you use the "Send Monday" option, won't your buyer be charged a fee to receive the money? If you use the "gift" option then you could possibly be suspended for circumvention of fees. Let's face it: no matter what you do, you can't win with eBay/PayPal. And to address the title of this blog entry, I don't think the defect rate has unintended consequences. I'm sure JD knows exactly what he's doing and is probably salivating at the thought of all the "noise" that will soon be eradicated from his site.  

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 12 00:56:28 2014

did i miss something? you don't get a defect by simply refunding  a buyer.  

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: bitbybit

Sat Jul 12 01:20:55 2014

@woodjungle

If you refund in full ebay will give you a defect. I refunded in full on an insurance claim on a damaged item. No case filed or communications through ebay. All done through direct email with the buyer. Positive feedback and 5 stars left by buyer. Any FULL refund will give the seller a defect. And yes all of this is intended consequences.

Wondering if Donahoe taking over as Paypal CEO was done intentionally so the ebay marketplace can either be sold off or just feed off itself until there is nothing left.

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 12 01:24:15 2014

That is simply not true. There is no defect for a refund.  They only way you get a refund on something similar to that is for a cancellation due to having an item out of stock or selling it to someone else. In no way is there a defect for a refund.

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 12 01:24:33 2014

I mean defect.

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 12 01:33:11 2014

bitbybit.  are you sure you got all 5 stars? that could be it right there. there are no defects for refunds. that would be beyond absurd.

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

by: maxmad This user has validated their user name.

Sat Jul 12 07:59:49 2014

YES, DEFECT for REFUND
YES, DEFECT for incorrect address supplied and verified by ebay


If ebay were to just come out and remove sellers, there would be public outcry, but
How better a way to get exterminate sellers, think about it, to the outside world it just appears that ebay sellers don't meet standards,

We really know what ebay is doing, it's so blatant,

I swear if they cull us, I will never use ebay or paypal again,  

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: Basset

Sat Jul 12 08:17:30 2014

OP - Same here, it certainly comes up time to time with clothing!

Just a while back I discovered a minor flaw when packaging to ship. I took a photo, let the buyer know about it & told buyer I would ship and if she kept item I would send a partial refund, but if she wanted to return for any reason I would cover all return. She thanked me for being honest, liked the item & I sent a partial.

This was a minor issue, easily overlooked. If I had re-listed the item I would have included a photo, tho.

It IS very possible that the buyer would not have noticed the issue but I felt obligated to tell her about it and offer choices based on my own standards, not eBay's.


IMO, sometimes doing the right thing is ignoring the fact eBay is part of the equation -  Damn the ''defects'', full speed ahead!

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

by: maxmad This user has validated their user name.

Sat Jul 12 08:22:18 2014

We went from TRS to almost below standard for simple FULL REFUNDS we made to customers, for what we believe is a normal part of doing business,

We also received DEFECTS for shipping to a few wrong address, the address's were verified and EXACTLY what is GIVEN to us by ebay.

CS WILL NOT REMOVE THEM !!

15 years on ebay, perfect record, and in less then 3 months, WE are now just hanging on to our account by a thread,

I cannot believe this, I am so pissed off at these idiots, right now it's unreal.

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 12 08:44:05 2014

can someone provide a link where you get a defect for refunds?  

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

by: maxmad This user has validated their user name.

Sat Jul 12 09:13:02 2014

this is the issue, it's not written anywhere to my knowledge, but the minute you log into paypal and click REFUND, within a day you will see a DEFECT listed in your seller dashboard for that transaction.

YES, one more point closer to termination.

We have pleaded with CS on the refund / defects we have received, they are very sympathetic, and they all re-assure us they will be removed, but not one single DEFECT has been removed from our account for a DEFECT REFUND, to date.

ebay and paypal will pay dearly for this abusive business practice, they are delusional if they think this is going to fly.

It may not be illegal, what they are doing, but it is certainly shameful and disgraceful, sellers will vote with their wallets, to which venues and payments they use, ebay will be accountable one day soon.

 

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 12 09:22:10 2014

I'm pretty sure I've issued refunds without defects.  A refund is not one of the categories that causes a defect and I really think there is some confusion here. I'm still finding this not believable.

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

by: maxmad This user has validated their user name.

Sat Jul 12 09:31:39 2014

oops " they are delusional "

should read

" they are f@#king delusional

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 12 09:44:24 2014

there are no defects for refunds or address issues.

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: Ric

Sat Jul 12 10:32:10 2014

The only time I have seen refunds referenced in the SSU is here:


Link:  http://pages.ebay.com/sellerinformation/news/springupdate2014/se
llerstandards.html

    > What is counted as a seller-cancelled transaction?

     "Any transaction cancelled through eBay or refunded through PayPal because the seller no longer has the item (such as out of stock) or chooses not to ship the item after it was sold is counted as seller-cancelled."


I have not seen any clarification indicating that eBay is going to jump to conclusions when a full refund is issued, but based on this eBay will be monitoring fully refunded transactions.

Given the negative nature of the defect program, sellers are wise to be concerned that as usual, eBay will shoot first and issue the defect after a full refund has been issued then force the seller to grovel and beg before the all mighty but uninformed Customer Service Peggys in an attempt to have the defect removed..

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 12 10:54:49 2014

correct

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

by: Scotty This user has validated their user name.

Sat Jul 12 11:02:30 2014

Link to Refund Defect info...straight from Brian Burke's mouth....boy, he really does not like sellers...and this guy is in charge of seller protection?....I think it is left unclear intentionally, but it does show up as a defect if you issue a full refund:
http://www.ecommercebytes.com/cab/abn/y14/m04/i24/s01

The Unintended Consequences of eBay's New Defect R   The Unintended Consequences of eBay's New Defect R

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 12 11:09:12 2014

i see nothing regarding defect for a simple return. quote please?  it has to be kept in context.

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