EcommerceBytes-NewsFlash, Number 2046 - May 21, 2009     1 of 3

More on eBay's Purchase Protection and Dispute Resolution Process

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eBay explained some of the thinking behind the "fakes" provision of its new Purchase Protection Policy designed for buyers. The policy as first published would have instructed buyers to destroy items in which the buyer and seller could not agree were not "non-authentic." eBay later revised the policy to state that the buyer should return the item to the seller in such cases involving counterfeit items.

eBay also provided AuctionBytes with additional background on its new dispute resolution process, which it said it was moving from a risk-management perspective to a customer-service perspective.

Sellers expressed concern that eBay would count a "counterfeit" complaint from a buyer as a strike against them if they could not convince the buyer the item was authentic. eBay spokesperson John Pluhowski said, "a notice in this form by a buyer would count as an infringement notice against the seller. Note that the buyer and seller have an opportunity to resolve the dispute between themselves before this arises. If the seller establishes that the item is not counterfeit, no infringement violation would be noted. Otherwise, eBay's policies prohibit the sale of counterfeit items."

However, eBay said it would review evidence of authenticity from the seller in its new dispute resolution process announced in April - see "How does this new eBay Resolution process work?" in eBay's FAQs, and said the new policies are no more stringent than they are today. eBay will work with sellers to try to resolve problems and said the process is more holistic, with representatives taking into account buyer and seller track records on both eBay and PayPal.

But what about cases where there is a legitimate buyer who says an item is a counterfeit, and a legitimate seller who says it's not a counterfeit but can't prove it? eBay said it can't tell because it's a venue, "so the balance that we've struck was that the buyer sends the item back to the seller, the seller can't list it, but we do have to note, and as part of our consequence guidelines, we do note, that there's an issue. We don't take account level action against sellers based on one issue, there's multiple things that have to go into play, but it tells us it's a flag we need to watch it. And if a seller is getting multiple claims like this, that's something we need to look at."

Would eBay make exceptions for certain trusted sellers? Generally eBay wants to make sure it has placed a notation in the account because it's a flag for them - "it's not something we want to ignore. eBay takes reports of counterfeiting very seriously." However, eBay knows its sellers, and one notation on an account won't result in aggressive action against the seller because there might be a mistake or explanation.

The change in language in the policy revision from "non-authentic" to "counterfeit" was deliberate, eBay said, hoping to clear up questions raised by sellers. So does that mean claims involving counterfeits apply only to designer items and not to antiques, for example? "Counterfeit is a very specific term, which means the selling of illegal items, which are prohibited on eBay."

eBay's Pluhowski was able to provide two examples. For items such as antiques, where it may be one period versus another, that's not what a counterfeit means. If it's described as an antique and it is not, that would fall under the "Item not as described" policy. Generally, a counterfeit is something that is a fake product, so if the item was described as an authentic "Chippendale" piece of furniture and was not, that could be a counterfeit if "Chippendale" had Intellectual Property rights around the use of its brand.

eBay's User Agreement states there may be "additional circumstances where eBay elects to exercise its discretion and may request the destruction of the item by an authorized third party and at eBay's expense." The company said those circumstance might include cases where a seller doesn't want the item back, or if eBay is unable to locate the seller for whatever reason - an account takeover, for example. eBay said it has not selected a third-party to use in such cases.

eBay's policy states, "Buyers who eBay believes are not acting in good faith, abusing the program or a seller, attempting to commit or committing fraud, or trying to unjustly benefit from the program may become ineligible for eBay Purchase Protection." eBay said it has broad policy language such as this, but it does do investigations if it receives reports about a buyer or seller. If it found there was a buyer who, for example, was actually a seller trying to shut down a competitor by making false claims, it would look into it and take deliberate action - but that's not generally what eBay is seeing, the company said.

In addition, when a buyer calls or emails and needs help with an item they have a problem with, eBay runs fraud controls to evaluate the buyer and take their track record into account. They also take a look at the seller's track record, and at the information in the seller's listing.

In general, in cases of items not as described, either eBay or the buyer would pick up the cost of shipping item back to seller. eBay will use its discretion in when it would pay the cost, with the goal of having higher buyer retention rates. "We may want to do everything we can to take care of one small problem when (buyers) look like they could very well be spending more money with us." It is measuring buyers' intent to recommend eBay as a place to shop and how much money they are actually spending on the site to help determine the effectiveness of the program.

There are two cases where sellers might pay for return shipping, eBay said. One case is where the buyer and seller agree, the other is when there is conflicting information in the listing. An example of that would be a listing where the title and Item Specifics say New In Box, but the description says the item is missing some pieces and has been opened. eBay said it intends to make it clear exactly what those requirements are before asking any seller to cover the cost of the return shipping.

eBay began training representatives whose jobs had been top-seller support to work with buyers to handle the new dispute resolution process and has expanded that training to reps who had been in top-buyer support, as well as PayPal reps who have been working with claims and Trust & Safety issues. eBay is providing sellers with the same phone number to call (866-643-1588) and said it believes the integrated perspective will result in a process that is more fair and equitable to everybody.

Currently the new dispute process covers over a million of eBay's most active buyers. eBay has been rolling out the program more slowly to sellers because they wanted to see what it would take to make the buyers happy, eBay said. It expects to ramp to the full seller base before the holidays.

eBay Purchase Protection policy

Changes to the eBay User Agreement

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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

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