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EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com

Thu May 17 2012 22:30:48

eBay Account Rep Defends Reality TV Star Accused of Shill Bidding
By: Ina Steiner

Sponsored Link

The USPS is banning international shipments of electronics that contain lithium batteries effective May 16 through January 1, 2013, and it could have a major impact on online merchants.

The U.S. Postal Service will not accept packages containing lithium batteries and electronic devices containing lithium batteries addressed to international destinations. This includes mail destined to, or from, military destinations including APO (Army Post Office), FPO (Fleet Post Office) and DPO (Diplomatic Post Office) locations.

Fast Company, which broke the story, said only one other country has instituted a complete ban for international shipments.

The ban will make it much more expensive for sellers who wish to ship items iPads and other tablets, radio-controlled toys, GPS devices, power drills, MP3 players and other devices to overseas customers- including to men and women serving in the military - since they will have to turn to private delivery firms UPS, DHL and FedEx.

If you sell products containing lithium batteries, you'll likely need to adjust your S&H charges for international orders, and the policy will likely have a major impact on this year's holiday shopping season.

Read the news story about the ban in EcommerceBytes, and let us know what you think of this policy and if it will affect your sales.

Comments (27) | Leave Comment | Permalink

Mon May 14 2012 15:37:44

Buy Bets Big on Third Party Merchants
By: Ina Steiner

Online marketplace Buy.com is taking a page out of its Japanese parent Rakuten's playbook as it makes a radical shift to its home page design. Visitors to Buy.com, which says it does not compete with its sellers, now see third-party merchants featured front and center. It also plans to offer fulfillment services to merchants.

Buy.com's Merchant Evangelist Randy Smythe, a former eBay PowerSeller, admits the approach is unusual, and says Rakuten has beaten Amazon in Japan "because they are merchant-centric not a "vending machine" like Amazon." Smythe said consumers in the U.S. and EU have an alternative. "They can purchase much the same product as at Amazon, but we hope they prefer to buy from people rather than a faceless Internet."

Above: New Buy.com home page features merchants, such as eForCity's Jack Sheng.

Buy.com began rolling out the new homepage over the past few weeks as it becomes "store- and merchant-centric." Currently the home page features four third-party merchants at the top in a scrolling slide show, with the tagline, "Buy from people, not the internet." Other stores are featured underneath.

The site continues to feature top level category links at the top of the page where visitors can browse listings by category rather than by store.

Above: Buy.com's old home page featured products, not merchants.

Buy.com has 5,200 marketplace sellers listing 12 million unique products across 20 categories for a total of 22.5 million items listed. Buy says its 18 million customers contribute to an 8% conversion rate.

Smythe said Rakuten is a lot like eBay was "back in the day" - smaller merchants that want to sell their product online. "Many of them have little shops in the real world but wanted to sell all over Japan not just to their block."

"Rakuten is store-centric," Smythe says, "which means everyone has a shop in the mall and all of their product is in Ichiba's search. They've always had stores in search and then they have dedicated account managers that are incentivized to grow their accounts business through participation in site wide Super points campaign's specific email campaigns etc. "

Time will tell if the approach works in the U.S., Smythe said. "Of our 5200 sellers most of them sell on eBay and Amazon so our product is not much different from the others but we believe there are enough consumers out there that want to "Buy from people, not the Internet" to make us a challenger of the other two."

Buy.com has additional plans in the works yet to be announced, including fulfillment services revealed only to select merchants thusfar.

Comments (5) | Leave Comment | Permalink

Sat May 12 2012 10:11:06

eBay Mulls New Feature to Eliminate Deadbeat Bidders
By: Ina Steiner

eBay is surveying sellers to see how they feel about a new feature designed to eliminate deadbeat shoppers for both fixed-price and auction format listings.

eBay is considering offering a form of "immediate pay" for auctions. Buyers would sign a one-time billing agreement that would give eBay permission to automatically collect payment once a bidder wins any future auction.

Currently eBay offers sellers the ability to require customers to pay immediately for their fixed-price listings. The survey indicates eBay is also considering making the feature mandatory on eligible listings - i.e., where shipping costs are known upfront for those sellers who accept a form of payment that allows for immediate pay (via PayPal).

In the survey sent to sellers this week, eBay asked how interested respondents would be if eBay required "immediate pay" for all fixed price listings.

Another survey question asked, "If eBay required "immediate pay" for fixed price listings, do you think there should be an exception allowing buyers more time to pay for higher priced items?" It then asked sellers to define "higher priced items," from items over $100 to items over $10,000.

eBay could be feeling the pressure from merchants tired of non-paying shoppers, as well as those merchants who also sell on Amazon where the problem of non-paying customers is not a problem, since Amazon collects payments on behalf of third-party sellers. It could also be an attempt to boost the adoption rate of PayPal on the eBay marketplace.

A seller who received the survey wrote to EcommerceBytes, "It looks like this new "improvement" will be spun under the title of "Seller's Benefit - elimination of non-payment sales - get paid immediately". Too bad the people who like to pay by check, money order and would e-mail you to see if you have another trinket or two would be set aside."

Are non-paying bidders and buyers a problem on eBay?

And what do you think of the features/policies eBay is considering to address the problem?

Comments (52) | Leave Comment | Permalink

Thu May 10 2012 15:53:55

eBay Accuses EcommerceBytes of Fraud then Retracts
By: David Steiner

NTT, our hosting provider has informed us that a member of eBay's Trust & Safety team has reported EcommerceBytes for phishing, saying a blog post we wrote about changes to eBay's buyer protection program was an attempt to commit fraud.

Our web hosting company forwarded the letter it received signed by Don Riggins, eBay Inc. Audit and Investigations, in which he wrote

Dear NTT America, Inc.,
We have just learned that your service is being used to display false or "spoofed" eBay.com pages, apparently in an effort to steal personal and financial information from consumers, including eBay users, in order to defraud them. Specifically, it appears that a NTT America, Inc. user is sending unsolicited messages to consumers, misrepresenting itself as eBay, and making statements that encourage the recipient to go to a page hosted by you at

198.64.133.73 - http://blog.ecommercebytes.com/cgi-bin/blog/blog.pl?/pl/2012/4/1333331894.html

ecommercebytes.com

to enter personal and account information. The deceptively gathered information is then sent to an email account and, based on our investigation of similar schemes, used to gain access to consumersâ?T personal accounts in order to commit fraudulent acts such as international credit card and wire fraud.

This matter is urgent - we believe that consumers have been falsely directed to this page and may be deceived into divulging personal information to a criminal if the page is not immediately disabled. We ask that you immediately disable the site at http://blog.ecommercebytes.com/cgi-bin/blog/blog.pl?/pl/2012/4/1333331894.html as well as any associated email addresses, so that this fraudulent scheme can be stopped. We further request that you provide us with all contact information that you have for this user so that we may provide it to the proper law enforcement authorities.

We would also like to ask for you to assist us in educating consumers about phishing and how to protect themselves. To that end, we have set up an educational page at https://signin.ebay.com/ws/eBayISAPI.dll?AntiPhishingRedirector&purl=http://blog.ecommercebytes.com/cgi-bin/blog/blog.pl?/pl/2012/4/1333331894.html to help prevent consumers from being victimized by phishing sites. We would greatly appreciate it, and think it would be enormously beneficial, if you would set up a redirect from the taken down fraudulent address to the educational page we have created, as default error messages such as "404 Not Found" donâ?Tt educate the public about the dangers of phishing and fraud on the Internet.

We sincerely appreciate your immediate attention to this important matter. We would also appreciate if you would take steps to confirm the accuracy of any contact information that your user may have provided to you in establishing the account. Should you have any accurate information that could assist eBay and law enforcement in tracking this individual, we greatly appreciate your assistance, as we know that you do not condone the use of your services for such criminal purposes.
Thank you,

eBay Inc.
Trust & Safety

Don Riggins
eBay Inc.
Audit and Investigations
driggins@ebay.com
securityalerts@ebay.com
For more information on spoofing and password phishing, please see http://pages.ebay.com/education/spooftutorial/

The EcommerceBytes blog post Riggins reported in his phishing complaint was written by Ina in which she reported on seller concerns over changes to the eBay Buyer Protection Policy that allow eBay to issue partial refunds to buyers without requiring them to return the item to the seller - "eBay Buyer Protection Changes Include Partial Refunds, Returns."

If Mr. Riggins had visited the link he reported and was concerned about, he would see there is no place for visitors to enter their personal information. When a user chooses to leave a comment on the blog post, all we require is a working email address.

According to Don Riggins' LinkedIn profile, he has been a Fraud Analyst at eBay for over 6 years and claims to have uncovered malicious-bidding fraud as well as affiliate fraud that saved the company $1.6 million.

We've written to Mr. Riggins demanding he retract his report, and copied eBay's communications team to let them know we'd be writing about this incident, as well as leaving a voice message on John Pluhowski's (VP of Corporate Communications) cell phone this morning. As of 1:25pm ET, we have received one response from Johnna Hoff, stating, "Ina and David - thank you for bringing this to our attention. I'm working to right this and will be in touch."

At 3:14 pm, we received a second email from our web hosting company NTT America in which it forwarded a retraction from eBay:

Dear NTT America, Inc.,
It has come to our attention that a recent report made by us to your company regarding a fishing site was made in error and that the site is not host any pages that are being used to gain customer information. We do appreciate your working with us on this issue and regret any inconvenience that this situation has caused. The site in question is:

198.64.133.73 -
http://blog.ecommercebytes.com/cgi-bin/blog/blog.pl?/pl/2012/4/1333331894.html

ecommercebytes.com<http://ecommercebytes.com>

Please do not take action on that page or site since they are not hosting any suspicious information.

Russell R Langner
eBay Trust and Safety

We would be interested in Mr. Riggins' reasoning behind sending a takedown notice to our hosting company, since the page is clearly a blog post that has existed on our site since 4/1/12 and nowhere on the page does it, as Mr Riggins states, "steal personal and financial information from consumers, including eBay users."

We've yet to hear from eBay on how this mistake occurred, and I empathize with sellers whose accounts are mistakenly reported and don't have access to the channels we have.

Comments (51) | Leave Comment | Permalink

Wed May 9 2012 10:23:42

Seller Shows Strange Traffic Pattern on eBay
By: Ina Steiner

eBay sellers have talked for years about rolling blackouts, "tap-on-tap-off" visibility, "rolling-region" visibility and other strange phenomenon that they say lead to odd sales patterns (see this AuctionBytes blog post from 4 years ago).

Last week, Anne Warrington of Wigs US sent us a graph showing traffic to her eBay store for the past 180 days that shows one of those odd traffic patterns.

Anne said Wigs US is one of the largest U.S.-based wig sellers on eBay, and the company also sells on Amazon and on its own website. She said this traffic pattern only occurs on eBay, and not on any of the other channels on which it sells.

Over the past 18 months, she has spoken to customer service reps who agreed the traffic pattern was very strange. But, she said, "Apparently every single person we spoke with over this time period has failed to properly register this issue so according to the latest CSR Matt in Technical Issues - the issue has never been raised higher up." And two days after speaking to Matt, she's heard nothing further from him.

"We aren't surprised, but starting to feel despondent... there's definitely an issue, acknowledged by everyone at eBay who sees this graph... but NO ONE seems to be able to get anyone to actually DO SOMETHING ABOUT IT."

She sent an email to eBay Vice President of Experience, Search, and Platforms Hugh Williams, but has not heard back from him either. In her letter to Williams, she explained that about every 2 months, traffic for Wigs US falls off a cliff. "Wigs are not seasonal in this way, so this is not because our customers are not looking for wigs. In fact, just before this graph takes up in October, our traffic hit ZERO on October 24th. October 24th should be our busiest day of the year. Wigs are huge sellers for Halloween and October 24th is one week before Halloween."

She also said that despite being one of the largest U.S.-based wigs sellers on eBay and being a Top Rated Seller, "if you type in wigs - you have to go 7 pages deep to find our first listing. We have nearly 1200 listings regularly."

If you have an eBay Store subscription, take a look at your analytics and see if you show any strange traffic patterns - send screenshots to ina@ecommercebytes.com.

Update 5/9/12: Anne received the following email from Matt yesterday:

I apologize that it has taken me so long to respond. The correspondence between me and the developers as taken longer than expected and is still ongoing. The general consensus has been that this is a common trend during evaluations on most accounts. While visitors have decreased impressions have not. They also pointed out that there has been no change in items sold in the months where the visitor count is low and months where the visitor count is high. I was only able to get trends for the last 2 years but the year to year sales trends were consistent with the above information.

I understand that this is not a good resolution and that is why the correspondence is still ongoing. Many of the specifics regarding how our algorithms work are not disclosed as a way to prevent manipulation. Because of this getting clear information regarding why items may be dropping or rising in the search rankings is not always possible. I am currently awaiting another response and will follow up as soon as more information is available.
Thanks,
eBay

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Mon May 7 2012 23:28:07

Amazon Denies Bargain Basement Strategy in Fashion
By: Ina Steiner

The New York Times has a fascinating update on Amazon's move into the fashion category. Both online and offline retailers cringe at Amazon's lowest-price strategy, but Amazon.com CEO Jeff Bezos told the Times the company would not take its low-price approach when it comes to fashion.

"There's a sophisticated markdown cadence in the fashion industry that we think makes sense and we're basically following that established approach," Bezos told the Times.

The New York Times also wrote, "While brands sell some of the same items to different stores, they are increasingly developing exclusive colors or styles to avoid price-comparison issues."

Retailers are still angry at Amazon's promotion in which it gave consumers a 5% discount on items purchased through Amazon if they use its Price Check mobile app to compare prices at brick-and mortar retailers. Target has since reportedly asked manufacturers to provide it with exclusive SKUs to make price comparisons on mobile devices more difficult for in-store shoppers.

Let us know what you think of Amazon's move into fashion.

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Mon May 7 2012 15:06:19

eBay Expands PayPal Holds Policy
By: Ina Steiner

eBay sellers received an email over the course of the last several days informing them that eBay is expanding its PayPal holds policy (which it calls the Funds Availability program) to include "sellers who sell an item that has a sales price that is significantly higher than the average sales price of items previously sold by that seller."

PayPal's holds policy was investigated by the New York Times "Haggler" column on behalf of a seller, and eBay Vice President Christopher Payne told The Haggler that it would "tinker with its filter so that people like Mr. Ferrall wouldn't be flagged in the future. We're constantly refining these models, and we're going to learn from this experience."

eBay has also been sued over its PayPal holds policy and the parties have tentatively agreed to settle - plaintiffs are working up final settlement papers - see today's Newsflash article for details.

It will be interesting to see if plaintiffs were able to get PayPal to change its policy, but given eBay's letter to sellers this week, it seems unlikely they won many - if any - concessions.

Sellers detest the holds, since it puts severe cash flow pressure on their businesses - they must still pay shipping costs and other bills, but during the holds, their money is tied up in PayPal's coffers. While commonly referred to as "21-day holds," some sellers have reported holds as long as 6 months.

What's also interesting is eBay's claims about the flexibility sellers have in the payment methods they can accept. In its response to a motion in Dunkel v. eBay, a lawsuit filed against eBay in March, eBay writes about the plaintiffs claims, "Contrary to the Dunkel Plaintiffs' assertion, eBay's Accepted Payments Policy expressly provides that PayPal is only one of several different payment options for eBay sellers."

And eBay backs up that statement in a footnote that reads as follows:

"General payment options include ProPay, Skrill, Paymate, credit card or debit card, payment upon pickup and Bill Me Later. For many categories of sales, eBay will also accept wire transfers and bank cash transfers, checks, money orders and various on-line payment services. See Accepted Payments Policy, available at http://pages.ebay.com/help/policies/accepted-payments-policy.html."

So in the filing with the court, eBay said it accepts checks and wire transfers for "many" categories, but on the page it references, it states that for "most" categories, sellers can't ask buyers to send checks or wire transfers.

eBay is also making changes to its Buyer Protection Policy that has been greeted with concern from sellers. It began notifying buyers in April, and is notifying sellers in the same email that inform them of the expansion of its holds policy that's going out this week. Heraldo Botelho, Manager for eBay's Buyer Protection Policy, clarified the controversial partial refunds provision in this April 10th webcast of eBay Radio (Show 462 - Segment 5).

Here's the fulltext of the email eBay is sending sellers.

Updates to the eBay Buyer Protection Policy and Funds Availability Program

Dear Seller,

We're writing to let you know about updates to the eBay Buyer Protection Policy and the Funds Availability program.

The updated eBay Buyer Protection Policy goes into effect on June 19, 2012:

- A provision has been added stipulating that in some cases we may refund part of the cost of an item to the buyer, and receive reimbursement from the seller, to cover differences between the item described and the item actually received, such as items received with small parts missing or minor repairs needed. Buyers may be asked to provide written proof from an authorized third party detailing the cost of such repairs. In these cases, we will not require the buyer to return the item to the seller.

- A clarification has been included that delivery signature confirmation for items $250 or more is only required in order to protect sellers from losing a case where such service is offered by at least one shipping company. Similarly, when we ask a buyer to return a $250 or more item to the seller, delivery signature confirmation is required if it is offered by at least one shipping company.

- A clarification has been made that items purchased from the Businesses & Websites for Sale category will not be covered by eBay Buyer Protection.

- A provision has been added regarding the relationship between eBay Buyer Protection and the new managed return process. If a buyer uses the process to return an item purchased from an eligible transaction under that process, and the seller fails to provide a timely refund in accordance with the new process, the buyer may file a case under eBay Buyer Protection. If we resolve the case in the buyer's favor, we'll refund the buyer, the amount of which will depend on the terms and conditions of the process.

- As with earlier updates, other changes have been made to keep the eBay Buyer Protection Policy up-to-date with our product and service offerings

The update to the Funds Availability program goes into effect 30 days after delivery of this notice to you:

To better protect our consumers, eBay has at times requested, and may continue to request, that PayPal hold seller funds based on certain factors, including but not limited to, selling history, seller performance, riskiness of listing category, or the filing of an eBay Buyer Protection case. Currently, access to funds from buyer payments may be delayed to promote successful fulfillment for sellers who are new to selling on eBay or have a below standard seller rating. This program may be expanded to include:

- Sellers who sell an item in a high-risk category with no recent experience selling in that category; sell an item that has a sales price that is significantly higher than the average sales price of items previously sold by that seller; add a new PayPal account to their eBay account; were reinstated following an account restriction or suspension; or have recent account activity indicating risk, including but not limited to significant changes in listing activity or buyer dissatisfaction.

- Transactions where the buyer indicates a problem, including but not limited to messages or activity indicating that the item hasn't been received or that the item isn't as described in the listing.

Thanks,
Heraldo Botelho and Pawan Modani

Comments (24) | Leave Comment | Permalink

Sat May 5 2012 10:55:44

Former PayPal President Scott Thompson Caught in Resume-Gate
By: Ina Steiner

Former PayPal President Scott Thompson is in hot water over his bio that says he received a college degree in accounting and computer science - he only received a degree in accounting. It looked at first like it was a mistake made by someone at PayPal - eBay's SEC filings were correct, but the bio on eBay's management page contained the error. No one has suggested that Scott claimed he had the CS degree on his resume.

The verbiage that stated Scott had a CS degree that appeared on the eBay bio page then made it into Yahoo's SEC filings when Scott became CEO of Yahoo in January. Was it a copy and paste error? Everyone wants to know, how did this happen, and why didn't Scott catch it?

AllThingsD Kara Swisher wrote about an episode in which Scott didn't clarify his degree during an interview.

It might be surprising that someone with an accounting degree refers to themselves as an "engineer" - but Scott did work in IT for years and joined PayPal as its Chief Technology Officer before he was named President.

Are courses in computer science from 1970s an important requirement for running a company? That's not really what the brouhaha is about. What does it say about Scott that he let the error live on eBay's bio page and didn't catch the error when it appeared on Yahoo SEC filings?

More importantly, why did Yahoo perpetuate the error? When Yahoo hired Scott, the company wrote in its offer letter, "Background Check. Please understand that this offer is contingent upon the successful completion of your background check."

And that's why Daniel S. Loeb, CEO of Third Point LLC, who is fighting for spots on Yahoo's Board of Directors, is making a big deal about this. But is Loeb right when he tells the board they must "Terminate Mr. Thompson for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo"?

Here's Dan Lyons (fake Steve Jobs) writing about the hypocrisy of the accusations on the Daily Beast.

Many readers began using PayPal before eBay even acquired it in 2002, and before Thompson joined eBay in 2005. What do you think of Scott Thompson's predicament?

Update 5/14/12: See today's news story, "Which Financial Service Giant Will Snap up PayPal's Scott Thompson?"

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