Reputational failure

Online auction house eBay‘s reputation-driven trust scheme is a much-admired and much-emulated model. Or at least, it was until recently when eBay made a significant change to its operation.

Back in February this year, eBay announced changes to its Feedback system. Until that time, buyers and sellers could leave feedback about each other to rate each transaction. The system worked extremely well; anyone could build up a trusted profile over time, and both buyers and sellers used these profiles to determine the level of risk associated with a transaction. When something went wrong, the other party could leave negative feedback to warn others. It was easy to spot newcomers by their low scores, and even to identify hijacked accounts when a previously unblemished score started to accrue negative feedback. Buyers and sellers were generally careful about leaving negative feedback, lest the other do the same.

The system worked well. By and large, it was self-policing. eBay rarely needed to get involved (relative to the number of transactions), and had resolution measures where these were necessary. eBay’s reputational community was a model for how to build trust, and was arguably the most effective trust infrastructure of its kind on the Internet. Coupled with PayPal, and its buyer protection, eBay had an unbeatable combination.

In May, the change came into effect: sellers can no longer leave negative feedback for buyers. eBay claimed that there were too many buyers leaving negative feedback for sellers when they shouldn’t have. The change seems insignificant, but it completely shifts the balance of power between buyers and sellers, and in turn undermines the credibility of the system. Now, when a buyer fails to pay up, or claims the goods weren’t as promised, the seller has no recourse through the feedback system. All they can do is contact eBay and hope that something will happen. If the bidder has failed to pay, then the seller can – after a delay – recover the listing fees for the auction.

The feedback scheme has become unbalanced, and as such is no longer the valuable thing that it was. Sellers no longer have the same level of influence as buyers, and when things go wrong they have to depend upon eBay – which is arguably an inappropriate third party in this relationship – to put them right. eBay seems to have forgotten that many of us are both buyers and sellers, and need protection in both modes. In consequence an ecosystem of websites offering alternative feedback has sprung up in an effort to protect sellers.

eBay would do well to re-read Kim’s Laws of Identity and think carefully about how they apply to its feedback mechanisms. And then it should return things to the way they were.

PS – A message to the muppet who won an item I was selling last week: don’t buy things you claim you can’t afford to pay for. Because there’s nothing I can do about it now.

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This is one of those sites.
As a buyer on Ebay there is one other subtle change that annoys me. In an auction room you can see who you are bidding against and if you see them regularly will know their way of bidding and their reputation. This used to apply on Ebay when your Ebay name was shown as a bidder. Now all you get is Bidder 1, bidder 2 etc., which means you don't know who you are bidding against and how they will bid. So you don't know whether you are up against the person who has a habit of putting in his bid early and if it is beaten, well that's OK, or if its the guy who always seems to be able to get the highest bid on the system at 2seconds to the finish of the auction and is probably using bidding software. Who suffers in this? Honest bidders who occasionally want to buy, yes; but also Ebay because nothing spoils quicker than a "shop" that loses its reputation for good value and customer service.
I couldn't agree more, I've reduced my selling on eBay and am moving elsewhere as I can't take the risk that unscrupulous buyers will exploit this now biased feedback structure. As a buyer and seller I feel eBay have lost the credibility and natural balance, they will have far more issues to deal with (or be swamped with and not deal with, further damaging their credibility on user care), as a result of this action. A far better solution would have been to install moderators, xisting ebay community users and participants who can mediate and manage feeback, much like we used to with old message boards and still do with forums, it works well and the eBay administrators wouold only then havbe to regulate the moderators, a far smaller overhead and one they can deliver. Failing that a reversion to the previous practice is better than the new degraded solution.
Likewise, I see the anonymised "Bidder1" tagging as a retrograde step; it seems to me to make it easier for unscrupulous sellers to insert bogus bidding-rivals. Strangely enough, I have never had a bad eBay experience (as a buyer - I'm not a seller) until after these changes took place. I submitted "neutral" feedback about something which was... well, OK but not quite what I expected, and got a series of increasingly abusive emails from the seller, who accused me of 'damaging his business' and told me to 'take my custom elsewhere'. Goodness knows how he reacts to 'negative' feedback!
Robin's experience is why the feedback system was changed. What was happening, was that buyers giving genuine negative feedback would get unjustified negative feedback from the seller. This would have more effect on the buyer because they will generally have lower numbers of feedback and thus one negative appears as a larger percentage. This led to to buyers not provide honest (negative) feedback when appropriate and thus making the feedabck system useless. I thought that all the previous 'right to reply' and mutual withdrawal systems remained to provide some protection for buyers, and it should be easy to detect malicious negatives.