It is no secret that eBay’s growth has been hampered by fraud. Many professional sellers believe a certification system for sellers would rebuild confidence in the eBay platform.
It’s no secret that fraud exists on eBay. The level of fraud is not nearly as bad as portrayed in the media, but it does exist. Whether perceived or real, the effect of fraud is the same: It drives buyers away from the platform and that hurts sellers (and stockholders).
The idea of seller certification is a debate that has been raging in the seller community for some time. I recently spoke to someone who told me the debate is going on inside eBay as well. I hope this is true.
Seller certification is a term that means coming up with some way to certify that a given seller is reliable. Some would tell you that the eBay feedback system already does this. Others point to third-party services such as the SquareTrade seal. Unfortunately the fraudsters are continually finding ways to game the eBay feedback system.
Some sellers (I.E. large professional sellers) believe that eBay should have some type of seal that only large proven PowerSellers could get. eBay has resisted this and for good reason. It would upset the playing field making it very difficult for new sellers to get started.
I think eBay already has the tools if they would just use them –and there are also some third party tools that can help stem fraud. Today I am going to cover what eBay could do. Tomorrow I will review some of the third-party tools that can help buyers and sellers reduce fraud.
Most out-and-out fraud is committed by scammers who register a new account and use it to commit fraud while the account is still fairly new.
- eBay ID Verify – A big step in preventing fraud is verifying the identity of sellers. This is a great idea but it has two shortcomings. First, eBay stupidly charges $5.00 for this service. If it were free more sellers (and buyers) would take advantage of it. The second problem is that eBay does not promote the ID Verify Icon. When a new buyer registers on eBay, they should be told to look for the ID Verify Icon when making a purchase. I also think making the icon larger –or even making it into a seal would help.
Today when I logged into My eBay page, I had to look at an announcement about the Halloween contest first and then click Continue to get to my My eBay Page. If this page reminded members to look for the ID Verify Seal, then more members would sign up for it. Over time buyers will start looking for the seal before bidding on an expensive item or before buying from someone with low feedback.
- Protect The Integrity of the eBay Feedback system – The concept of Feedback is the single most important factor in eBay success, but to many sellers are gaming the system. Sellers create feedback farms (see this excellent article by Ina Steiner) to build feedback. Other potential scammers simply buy dozens of cheap items to inflate their feedback before listing and selling an expensive item they have no intention of delivering.
- Default the Feedback results to From Sellers when someone clicks on an auction – When you click on someone’s feedback, the page defaults to All Feedback Received. There are tabs on the page that allow a bidder to see feedback From Buyers, From Sellers and Feedback left for Others. When I want to see a seller’s feedback I have to click on the tab. New members are not familiar enough with the platform –and, a lot of new members don’t really understand the feedback system until they have done a few transactions. So, showing them feedback From Sellers first would give them a better picture. Also, if someone was new to selling, it would be obvious when the feedback displayed this way as there would be no –or very few comments.
- Set a higher bar for sellers. eBay shouldn’t do anything to discourage people from becoming a seller, but there are a few small things that could really help. For one thing I would require a minimum of five completed buying transactions in order to sell. I am always amazed at the number of people who purchase my books that teach people how to sell on eBay, who have never even bought anything on eBay. I am often interviewed on radio and TV. One of the first questions I am always asked is: "Do you have any tips for people who want to make money on eBay?" The first tip I always give is: "Buy a few things on eBay first so you learn how it works." I tell readers the same thing in my books. It is ludicrous that someone thinks they can register on eBay and sell something without understanding how the system works.
Most fraud is committed with large purchases. As I said above we don’t want to penalize newer small sellers, but I see nothing wrong with insisting that anyone who wants to list or sell a product for over $500 be ID Verified.
- PayPal Verified User – PayPal has a program where they verify your bank account. PayPal should make this mandatory for every premier and business account.
None of these steps will completely prevent fraud but taking these steps could reduce it and make eBay a safer experience for buyers. This will untimately bring and keep members on the site.
The final problem eBay has is one of public –or specifically media relations. As I pointed out, the amount of fraud on eBay is far less than it is reported in the media. First eBay should take some agressive steps such as those mentioned above and then publicize them. eBay tends to do things incrementally such as when they changed the Private Feedback policy last week. That is not enough of a news story to get any attention. But if eBay were to take several steps and make one big announcement that would help get the media’s attention.
Tomorrow we will look at how third-party solutions can help reduce fraud.
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