RealTime IT News

Playing the eBay Numbers Game

Online auctioneer eBay is an Internet phenomenon, a global garage sale that has forever changed how people think about the stuff they have stashed in their attics, closets and basements.

One key to the company's success is its ratings system. Users post positive or negative feedback, which results in a score that helps members determine whether they'd like to do business with each other. User feedback shortens the leap of faith required when buying from faraway strangers.

It also means an eBayer's reputation is worth its weight in gold. Many buyers refuse to purchase from any seller whose feedback score drops below 97 percent.

But experts warn against blithe belief in the veracity of eBay ratings. There are ways to artificially inflate and deflate those all important numbers and even an eBay underground whose members trade positive feedback for an investment of less than a dollar.

"There are definitely ways of manipulating the system," says David Fairley, owner of scams.flipshark.com, a watchdog site for scams on eBay and other sites. "Never assume that someone is trustworthy because they have good feedback."

Fairley cites several ways that eBayers can artificially boost their ratings. Users can set up dozens of accounts on eBay, purchase multiple items, and leave themselves glowing feedback. It's also possible to take control of another seller's eBay account by prying the login name and password from unwary victims.

But the most common scam involves buying e-books and other inexpensive downloadable items like screensavers in exchange for positive feedback from both the buyer and the seller.

Fairley suspects only a small fraction of the sellers on eBay are playing games with feedback, but he believes it's still something to be concerned about.

"It's basically a situation where you have to remember caveat emptor, let the buyer beware," he says. "If someone has only bought a bunch of stuff for 99 cents a piece, that's definitely a red flag."

Catherine England, a spokesperson for eBay, says eBay's terms of use forbids any sort of feedback manipulation, from buying e-books to boost scores to "feedback extortion" -- where a buyer attempts to jack up a price after a sale by threatening to leave negative feedback if the buyer doesn't agree to the new price.

"If it's reported to us, it can result in auction listings being cancelled and suspension of accounts," said England. "We rely heavily on our community to report those things to us. We also have automated tools in place to look for policy violations."

Feedback retaliation, where a buyer and seller get into a war of words and one leaves incorrect negative feedback in response to legitimate bad feedback, is also prohibited by eBay.

However, England added, "it's a gray area in terms of interpreting whether it's legitimate communication between buyer and seller or whether it's trying to manipulate someone by leaving unwarranted negative feedback."

She also noted that members can be held legally responsible for intentional damage to someone's reputation.

"As a general rule, we don't censor feedback and we don't investigate for accuracy," England said. "eBay is not legally responsible for remarks that members post. The person who leaves the feedback is the one who is legally responsible."

That hands-off attitude has caused some eBay users to turn to outside services for help in dealing with negative feedback.

"Feedback systems are inherently imperfect. No matter how good they are, someone's going to figure out a way to game it," said Steve Abernethy, CEO of SquareTrade, a company that offers a mediation service for buyers and sellers who are trying to resolve disputes outside of the eBay system.

Abernethy said SquareTrade customers typically want to avoid leaving or receiving negative feedback, or have gotten bad feedback and are trying to fix their reputations. He estimated that SquareTrade has handled millions of disputes over the last five years.

The company uses professional mediators to find an acceptable solution for both parties. For example, one SquareTrade user bought a chair on eBay that was damaged by mold by the time it arrived at her house. She was going to leave negative feedback for the seller but instead opted for mediation. The parties agreed to split the cost of cleaning the couch.

"In any dispute, things can get out of hand because people have different expectations," said Abernethy. "A mediator helps people find the middle ground. Often people just need an avenue for being heard, and then they calm down."

eBay has taken a few "minor steps" to improve the feedback system recently, according to David A. Karp, author of "eBay Hacks." Until recently, Karp said, new eBay members weren t instructed on how to use the feedback system. Now people must watch a mandatory tutorial on the proper use of feedback before they are allowed to buy and sell on the site.

"But eBay is reluctant to do anything more drastic than that because so much of its business relies on trust," said Karp. "You're exchanging money with complete strangers and the only thing you have to know that you won t get screwed is their reputation according to other eBay members."

Since some disgruntled buyers and sellers may opt not to leave negative feedback, fearing feedback retaliation, experienced eBay users have learned to interpret the stories behind feedback scores.

David Yaskulka, CEO of Blueberry Boutique, a seller of luxury apparel based in Long Valley, NJ. is a longtime seller on eBay. Yaskulka is also a member of the "Professional EBay Seller s Alliance" which is made up of companies that average more than $1 million in annual sales on eBay.

Yaskulka suggests that potential buyers check the seller's history to see if he or she has successfully sold items similar to the product they are considering purchasing. Everyone has to start somewhere, he admits, but most people are more comfortable buying big ticket items from someone with a proven track record. Prospective buyers can also look at the track record of previous buyers who left positive feedback and evaluate their ability to provide useful feedback are they experienced eBay users, and have they been satisfied with other transactions?

If you see a good pattern of feedback there s a good chance you re OK," said Yaskulka.

For big ticket purchases, Yaskulka also recommends looking for the Buy Safe seal. That means the seller has been vetted by a company called Buy Safe that reads through feedback and checks up on the seller. Some sellers with the buy safe rating are also bonded by Liberty Mutual, so every sale is guaranteed.

Despite its flaws, the feedback system remains the best way to manage activity on the site, says England. With 78 million items listed on eBay at any given time and six million new items added every day, policing all transactions on its own would be unrealistic for the company.

"The (ratings) system overall isn't perfect, but the eBay community as a whole is passionate about the feedback system and they rely on it heavily. So they help us make it better," said eBay's England. "People take their reputation and feedback scores very seriously,"