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eBay Amends Reserve Policy

Facing criticism over its open stance on sellers who overprice merchandise, eBay Inc. has amended some of its policies, specifically how the auction site deals with reserve bids.

Until now, sellers could freely set a "reserve price" for an item. A reserve price is the amount a seller deems to be the acceptable lowest bid on an item. Sellers do not have to reveal what the reserve price is, and eBay said many users have complained that some sellers set reserve prices as high as $1,000 with opening bids of $1.

Attempting to regulate the situation, on Saturday eBay announced policy changes that included adding a $1 fee for any seller using the reserve system, and only allowing opening bids to be at least 25 percent of the reserve amount. Further complaints were drawn by sellers, some of whom deemed the modifications an attempt by eBay to make more money.

The policy was again changed on Sunday, with eBay saying that the $1 reserve fee has been adjusted to $.50 for items with reserve prices of less than $25. The $1 fee will still apply to items reserved at more than $25, but all usage fees will be fully refunded if the reserve is met.

Also, the 25 percent opening bid statute has been postponed as eBay attempts to find alternative solutions to the problem, the firm said.

"Based on your feedback, we have decided to make modifications to the policy," the company posted on its announcement board. ". . .We need to be mindful of the fact that it takes both sellers and buyers to complete a transaction."

The policy changes have sparked a flurry of activity on eBay's message boards. Many sellers, particularly antique dealers, are unhappy with any type of fee imposed on reserve auctions. Some have gone so far as to demand an eBay boycott. Auction competitors such as Amazon.com and Yahoo! are mentioned frequently.

"I hope to continue to give my business to eBay sellers, but I suspect [eBay] will lose many of them over this one," posted Mary Swafford, a frequent eBay user who both buys and sells on the site. "It's not the eBay sellers who are greedy, but the eBay owners."