eBay Offers Buyers a False Choice:
Kick the Seller Off eBay or Perfection

Feedback was never intended to replace actual communication between a buyer and seller, nor was it intended to become a taxing mechanism with the ability to drive consumer prices higher and sellers out of business for adequate service.

Despite this, there are ways to allow feedback to become an asset. This guide will explain how the new feedback system will both improve and ruin eBay as we know it.

The reason feedback has been such a headache for the last decade is because it's a reflection of communication; something that's not easy to do over email. In the bestseller "Blink," Malcolm Gladwell explains how the doctors who get sued for malpractice aren't necessarily the doctors who lack skill. In fact, the biggest risk factor to getting sued is having an attitude of apathy or worse, rudeness.

In a like manner, eBay's feedback system was truly a reflection of communication styles between buyer and seller. The best way to avoid negative and neutral feedbacks is through superior communication.

The problem is that communicating in eBay transactions is easier said than done. That might sound absurd to a casual eBayer who buys perhaps an item or two every month, but to a big time seller who processes tens, hundreds, or even thousands of transactions in a month, communicating directly and often with a buyer can be next to impossible. Some sellers are better adept at handling this aspect of customer service.

eBay would be a great place if we could all list an 800 number where we can be reached 24/7. The fact is, however, that the majority of eBayers and even Powersellers, are part time eBayers who do other things like holding down a job and raising a family.

eBay's attempts to fix the broken feedback system does very little to address the realities of eBay users around the world. Because sellers' abilities to communicate throughout a transaction, including customer follow-up, fall on a wide spectrum, the easiest way to improve the feedback system has always been through mandatory communication.

No such communication requirement exists for users to leave feedback. 

A buyer assumes a lot of risk in purchasing items online. The allure of internet shopping, starting in the mid 90s, was that it could be done quickly and with less hassles and often lower prices. The internet swiftly became a place where a person could purchase obscure items in the privacy of their own homes. Further, deals could be had because companies had to compensate buyers for additional risk and delayed gratification (you don't get your new television the day you buy it). eBay became a premeir platform for these reasons.

The new feedback system puts us all at the precipice of losing the great eBay venue that can provide all those services and conveniences that we love.

We've all heard the adage "the customer is always right." This never went away on eBay. 90% of sellers treated eBay the same way as brick and mortar stores would. The problems that make the news reports generally come from people who literally break the law, not from people who provide lousy service.

Having prefaced my argument with the above, what is the proper etiquette for feedback on eBay?

Today's feedback system has grown increasingly complex. So complex, in fact, that it's almost useless.

The Detailed Seller Ratings (DSR) was implemented to mimic Amazon's system and to create a more accurate portrait of a seller's performance. It has swiftly become the newest problem on eBay.

eBay's fee structure is now tied to the DSRs. As part of the new feedback rollout, all sellers were hit with a fee increase of roughly 10 to 20%. They lowered listing fees to obfuscate the rate hike. They also created a tiered fee structure where a seller pays more money if one of their DSRs fall below 4.8. Sellers face another rate hike if one of their DSRs falls below 4.6. Powersellers lose their powerseller status a DSR falls below 4.5.

While the idea of linking proficiency to fee rates does have merit, the fee structure and the DSR structure lack the integrity to keep the system honest.

In fact, eBay has the decked stacked against sellers. eBay's goal is to make money, and in their mind, they make the most money through higher transaction costs. In economics, transaction costs are inefficienies in the market. The same is true on eBay. Higher transaction costs literally mean higher cost to buyers and a less fulfilling eBay for everyone. The reason is because the majority of sellers on eBay are cursed with narrow profit margins, and when costs rise, they are forced to pass those increases onto buyers, resulting in higher prices for everyone.

The reason I say the deck is stacked against eBay customers is that the DSRs are presented in a misleading manner.

When you give a seller a 4 star rating, eBay tells you that this means the description was "accurate," you were "satisfied" with the communication, the seller shipped your item "quickly," and the handling charges were "reasonable."

Wouldn't those grades be ample enough to trust a seller?

What eBay doesn't tell the buyer is that a 4 star rating costs a seller a lot more than reputation; it costs them money. When transaction costs go up, both the buyer and seller lose. Those costs get shifted to the buyer. In a tight market, the fee increases imposed on sellers with a 4 star rating can be high enough to literally drive them out of business.

Does a typical business go belly up for providing satisfactory service?

The only resolution is to give a decent seller a 5 star rating across the board. In doing so, the buyer minimizes eBay's fee structure and allows a seller to maintain their powerseller status. By default, the buyer faces a false choice: You either say that a seller should be banned from eBay, or that they performed exemplary.

The DSR system was supposed to be an anonymous and accurate way to measure a seller's service. Unfornately, eBay took a good idea and ruined it. Thousands of sellers who operate on low margins (good deals for buyers) have been getting squeezed. If you don't believe me, sell an item for $10 and notice how eBay takes 25% for themselves. Factor in paypal fees, and eBay actually collects roughly 35% for themselves. No where else in the world are transaction costs this high. The net effect from an economist point of view is there will be less "deals" to be had on eBay.

In a tight market, the extra fees eBay imposes as a result of 4 star ratings can be enough to drive a seller elsewhere or worse, out of business completely. The end result of a 4 star rating is an eBay marketplace that's worse off for everyone.

Every user can do their best to make the eBay experience better. If you want to leave a seller a 4 star rating, try writing them a quick message first. If you think the other party deserves a neutral (poor service), then give them a chance to make it right. It goes without saying, if you think they deserve a negative, the right thing to do is to always give them a chance to make things right.

The biggest problem with feedback on eBay is that it supplanted actual communication. Instead of exchanging emails like the old days, buyers and sellers exchange feedbacks. The feedback system works best when feedback is given after the entire transaction is over. The transaction isn't over until both parties are satisfied or have exhausted their means to become satisfied.

In this way, feedback can become a true reflection of a user's ability to conduct transactions amicably.