Seeing Disputes as Opportunities

I frequently hear complaints from sellers about the volume of disputes that buyers are filing against them. I understand the frustration, because dealing with transaction problems can take sellers away from listing and selling new products, which in turn takes a bite out of the bottom line. Also, buyers can sometimes have unreasonable expectations.  However, one thing I’d like to point out is that the dispute phase at eBay and PayPal is really an opportunity for sellers, one that is frequently overlooked.

Most payment channels have decidedly unpalatable options for solving problems. Some, like money orders or wire transfers, have no redress paths at all, so sellers and buyers are often left hanging should a problem arise. That encourages them to go to law enforcement or consumer protections agencies.  Other channels, like checks, bank transfers, or credit cards, provide no opportunity for the buyer and seller to work out the misunderstanding; they are, as I’ve heard some sellers describe them, “zero-to-panic” options, where any problem jumps right to accusations of fraud and finger-pointing.

eBay used to be that way. Before we had the Unpaid Item process, we had “deadbeat buyers” and before we had the Item Not Received process, we had “fraud alerts.” The first option the buyer or seller had to report a problem immediately jumped to the assumption that the other side was acting with malicious intent. PayPal had the same problem: prior to the introduction of PayPal Dispute Resolution, the buyer’s only option if they had a concern was to file a protection claim.

Now both eBay and PayPal have communication phases where the buyer and seller can work together to solve the problem before involving eBay or PayPal.  This provides an opportunity for the seller to resolve the matter before it becomes a claim, turns into a chargeback, or generates a negative feedback.