Is Judge Judy the solution to eBay's problems?

As a dispute resolution guy, I keep my ear to the ground on any developments in the world of online conflict management. And it appears there's been a mini-boomlet in innovation as of late. First came the launch of peoplescourtraw.com, which enables people in a disagreement to upload short video clips stating their case, which is then put to the site's visitors to decide. Then a few weeks later came AllRise.com, an Israeli startup that looks quite a bit like the Community Court eBay UK announced last fall (but subsequently canceled) in that panels of online juries decide cases submitted on the site.

The question these sites raise for me is how applicable these models would be to eBay and PayPal. A little while ago a friend sent me a post by Zac Bissonnette on a stock discussion board that suggested  Judge Judy would be an ideal solution to eBay's problems with sloppy sellers and fraudulent buyers.  The post included a link to a widely circulated YouTube video taken from a Judge Judy episode that dealt with a dispute between two eBay members. From the post:

"Kelli Filkins appeared on Judge Judy to defend plaintiffs' claim that she had defrauded them on eBay by sending them a picture of a phone they paid $240 for. She claimed that the ad said it was for a picture only.

What ensued is possibly the greatest smackdown in the history of Judge Judy -- who told Ms. Filkins that she is an "outrageous person." The sharp-tongued judge went on to say: "If you live to 120, you're not gonna be as smart as I am in one finger. You may weigh more, but you're not gonna be smarter than I am in one figure." Burn sauce!

Given Judy's reputation as a no-nonsense judge who will crack down on shenanigans, eBay could work out a licensing deal to brand its complaint resolution system as "Judge Judy" -- and run an ad campaign where she talks about her commitment to making eBay a safe place for buyers and sellers."

Objection sustained
Now as a dispute resolution guy, watching Judge Judy gives me hives. It seems less about resolving the problem between the two parties than about providing an excuse for Judge Judy to indulge her rage-a-holic tendencies by belittling and abusing the people in front of her. For some reason, people like to watch this kind of thing. I also think that because Judge Judy uses the trappings of the judicial system (big wooden desk, robes, etc.) people think that what she's dishing out is justice. She may "tell it like it is," (a la Simon on American Idol) but I think the "burn sauce" mentioned above is unnecessary and inappropriate.

All rise for Judge Griff?
That said, maybe members of the eBay Community would like to be able to bring their disputes in front of a forum like AllRise, the People's Court, or Judge Judy. Well, not Judge Judy, necessarily -- but maybe Judge Griff? If both the buyer and seller agreed to resolve their dispute that way then I don't see why eBay should prevent it. Maybe we could make it transparent and let others in the community come and review the processes as well, like this Judge Judy video.

I'd be interested to hear what readers of the blog would say about this idea (you can leave your comments on the Chatter blog discussion board). Personally, I think that resolving disputes by mutual agreement is the best way to go, because it builds trust and the members involved are much more likely to abide by a decision that they personally approved. But the judicial model does have a long track record of success, and it might be useful in some cases -- especially if it was a way for the Community to enforce the standards instead of eBay and PayPal employees.

The eBay Value Proposition (for math nerds)

I saw this web comic the other day about eBay and thought it'd be great to share.  Certainly makes figuring out optimal sales routes less complicated!

xkcd is a clever strip that bills itself as a "webcomic of romance, sarcasm, math, and language."  It's a very funny look at the world from the perspective of science, mathematics, and the internet.

Doing Right by our Buyers

I feel that we in the eBay world don't do enough to highlight the good things that are happening every day in the marketplace between buyers and sellers.  Yes, we need to stay focused on preventing the bad experiences, and we have to do everything in our power to reduce the likelihood they will occur.  But I came across a story last week that reminded me why the vast majority of the transaction problems that are reported on eBay are worked out amicably between the buyer and seller without requiring involvement from eBay or PayPal.

Larry Phillips is an extremely experienced eBay stamps seller.  A month or two ago he received a multi-item purchase from a relatively new eBay buyer and he shipped the items out right away.  However, the buyer jumped the gun when the item didn't arrive in a couple days, and he filed PayPal disputes against Larry, firing off accusations of fraud.

Now this isn't a situation that comes as a surprise to any experienced eBay seller.  This happens quite frequently, as buyers often don't have any idea what a reasonable time is to wait for an item to arrive.  In fact, the number one type of buyer-reported problem we deal with on the site is Item Not Received, and the number one resolution we see to that problem is that the item eventually arrives and the buyer closes the dispute amicably.

As it turns out, that's what happened in this case.  The items eventually arrived, and the buyer was embarrassed that he jumped the gun.  In fact, he told Larry that he felt he had "egg on his face" and that he was "ashamed for causing any grief."

Now I have seen countless situations where the buyer reports a transaction problem and takes an aggressive tone.  As a result, the seller responds with a similarly confrontational approach, which generates ill will.  Then when the item eventually arrives, which should resolve the issue, the problem continues because of the tone taken between Buyer and Seller.  Such a clash can result in negative feedback and a sour taste in the mouth of everyone involved, even though the original issue was completely resolved.

Seller's masterful reply
Larry's response paved the way for the reconciliation in this case.  I think his email to the buyer (who, remember, had accused Larry of fraud unnecessarily) was masterful in its reserved tone in the face of buyer accusations.  Larry wrote:

"I am a reputable seller, and always try to treat my customers in the manner I want to be treated. Just please keep in mind that while I strive to give world class customer service every time, sometimes I get overwhelmed with orders, and being human, I sometimes make a mistake. But if you call that to my attention, I will always fix it immediately."

The beauty of Larry's language in his response is that it doesn't just fall back on "the customer is always right" platitudes. It emphasizes Larry's commitment to live up to his obligations as a seller, but it doesn't back away from the buyer's obligations as well. PayPal also played a key role in working this matter out. 

When the buyer emailed Larry to say that it was unclear how to close the dispute amicably, Larry suggested that a rep call the buyer to walk them through the process, which a rep then did.  That cleared the final hurdle, and then everyone could walk away from the process satisfied.

Research has shown that buyers who encounter problems and have them resolved to their satisfaction are more loyal than buyers who encounter no problem at all.  I think (and I suspect Larry agrees) that if we all stay committed to delivering these kind of smooth problem resolutions we can deliver a transaction experience that is not only equal to the direct shopping sites, but better.

Promoting Respectful Communications Online

A big reason why I came to work at eBay are the Community values that Pierre placed at the heart of the company from the beginning. We all carry them around on our badges all day, and they're even painted on the walls around here, so you know we take them seriously.  #1 on the list is "We believe people are basically good."  I think that eBay can be viewed as a huge sociological experiment to test that hypothesis, and we have demonstrated again and again that it is true.  Successful transactions outnumber problems by a factor of more than a hundred to one on eBay, and that's pretty strong evidence to back up Pierre's original contention. (I've written about this topic on my personal blog as well.)

That said, there are some hooners out there who, for one reason or another, are driven to treat others (be they transaction partners or fellow posters in the discussion forums) disrespectfully. Believe you me, I have read some dispute threads that would singe your eyebrows, they're so bad. Why people are motivated to talk to complete strangers this way continues to mystify me, particularly when their transaction partners have the ability to publicly rate and comment upon their behavior through the feedback system.

The ugly mask of anonymity
I think it has something to do with the anonymity of the internet. Individuals type things into emails that they'd never say face-to-face, probably because they aren't thinking about the other side as a real person, and they are insulated from the reactions their comments elicit. Also, people are quick to jump to conclusions about the other side (they're a criminal, they're a liar, etc.) and they don't take the time to connect with their transaction partners on a friendly level -- they just jump right in to the accusations and threats, as opposed to saying "Hi, how are you?  My name is Colin..." or the other things we'd say if we met a stranger face to face.

This issue isn't unique to eBay and PayPal, of course. The blogosphere has been wrestling with this issue for some time. Earlier this year the writer of a popular web column, Kathy Sierra, was victimized by some terrible online harassment. Many people were upset by what she experienced, and spoke out against the type of behavior that targeted her. It led to some serious introspection (led most visibly by prominent blogger Tim O'Reilly) about whether we needed an Online Code of Conduct.

Subsequent to that issue I attended a conference in England on online dispute resolution where many conversations took place in the halls about this topic, particularly regarding what happened to Ms. Sierra and how momentum could be built behind keeping communication respectful online. After several break out drafting sessions, a joint statement was drafted and adopted unanimously by everyone in attendance that encouraged internet users to be more thoughtful in their virtual interactions.

Online code of conduct
To support the statement, the National Center on Technology and Dispute Resolution at UMass-Amherst has launched a website, RespectPledge.org, that has the full text of the statement and offers a Respectful Communication Pledge that anyone who visits the site can sign. (Full disclosure: I helped to put the site together, and I'm a longtime supporter of the Center.) The goal of the site is to promote respectful communication online by offering a pledge that can be taken voluntarily by individuals. Also, it has a little icon you can put on your blog, website, Me page, or item listing that indicates you have taken the pledge.

Obviously, not everyone online will be interested in taking such a pledge. In fact, many of the worst offenders may think such a pledge is laughable.  However, stating these principles clearly and giving individuals a way to publicly affirm them may help to build a critical mass that promotes and sustains a culture of respectful communication online. 

RespectPledge.org seal
I'd love to see eBay members being more proactive about this issue. I think SquareTrade seals have helped to advance this cause for the past 8 years, and maybe this new RespectPledge.org seal will serve a similar purpose. I suspect that taking the pledge will urge some people to think twice before they jump to conclusions about someone online, or before they send a message that they would never say face-to-face. And perhaps seeing an icon on the listing of a seller indicating that the seller has taken the pledge will urge a buyer to begin a communication regarding a transaction problem with a constructive tone instead of an accusatory one.

Seller Exposure After NAD Claims

Here's my guess at the #1 seller resolution frustration scenario out there right now:

A seller sends an item they are very confident is as-described. However, once it arrives, the buyer files a not-as-described (NAD) complaint. Maybe the buyer legitimately disagrees with the seller about the item condition, maybe there's something more nefarious going on -- who knows. After several back and forth messages with PayPal customer support to get the facts of the case, PayPal decides for the buyer, telling them they have to ship the item back to the seller in order to get their refund. Eventually, the buyer does ship back the item, but much to the seller's chagrin, it's now either damaged or incomplete.  The buyer then gives the tracking number to PayPal and they get their money back, but the seller is out the shipping and insurance -- plus, they have an item that has lost most of its value.

This is not a new issue -- I have seen examples of this kind of situation for several years. In contentious, not-as-described cases, PayPal will usually tell the buyer to send the item back to the seller, and once delivery is confirmed PayPal will release the funds to the buyer. In most cases, we’d call it even at that point, as the buyer and seller are out the same amount. For example, say the buyer paid $15 plus $5 for shipping ($20). Then the buyer shipped it back to the seller (presumably at a cost of $5). Then they got their original payment amount back, which was $20. So the buyer is out $5 (the return shipping) and the seller is out the $5 for the original shipping, but they have the item back. The transaction was unsatisfactory, so PayPal pushed the “undo” button as best we could and shared the cost between the members.

Returned item is damaged

However, what if the buyer damaged the item before they shipped it back, so the seller is out more than just the shipping? As if the seller wasn't frustrated enough with the time spent on the claim process and the decision by PayPal, now the damage to the item adds insult to injury.

Let me be clear that PayPal does not relish the role of playing decision maker in cases like this. We're not able to look at the item directly, which makes determining the appropriate outcome in a not-as-described case quite difficult. We’re asked to make the call because the buyer and seller can’t work the issue out directly, and we work hard to make the best call we can in each situation. But someone is going to be disappointed by the decision, and we don't like disappointing our customers.

It's understandable for members to suspect foul play, even when there might be none at work.  For  instance, an unscrupulous buyer could send an empty box or a box of junk just to get the tracking number (just as a fraudulent seller sometimes does). Once the buyer has the tracking number they can present it to PayPal to get PayPal to release the funds back to them. I've looked into this particular scam and found very few actual examples of it happening, but customer service is aware of it and prepared to handle it should it arise. 

Let me be clear, though (as I was in my prior post when I was addressing sellers): if a buyer does try something like this, it is clear buyer fraud -- just like if they were to send a fake money order or file a false protection claim. I don't think we need any buyer who would act like that in our marketplace.

The good news is that the odds are very high we'll catch any buyers that try this little scam. We track the number of PayPal claims a buyer files. Only a tiny percentage of buyers file more than one claim a year (the majority files none). If a buyer files multiple claims, particularly multiple SNAD claims, they will stick out like a sore thumb. Also, sellers have the ability to report suspected buyer fraud if they lose a SNAD claim – just click the “report buyer fraud” link on the right hand side of the closed claim in your Resolution Center and you'll see the link to do so.

Send me your experiences

I've been chatting with some folks at PayPal about ways we might be able to offer help to sellers victimized in this way in a more systematic fashion. I think PayPal needs to get on top of this issue, because it's a particularly bad experience for sellers. Until then, let me know in the Chatter discussion forum if you've gone through a situation like this one. It's helpful for me to learn more about individual cases that may fit this pattern so we can determine how best to address it.

Stringing along buyers

I've just heard a report from a very experienced member (more than 3000 feedback) that they are encountering an increasing number of sellers stringing them along when they encounter a transaction problem. For example, the sellers may say things like, "Oh, I sent the item, I can't imagine what's wrong..." or "I'll check what happened with my shipper, just wait a few days" or "it just bounced back through the mail, let me send a replacement." All of these things are fine to say if they're true, and they're just what you want to hear if you're a buyer with a problem. But the experienced member asserted that these sellers are stringing their buyers along for a more insidious reason: they want the buyer to lose their eligibility to file a dispute or claim.

Buyers can only file a dispute on PayPal up to 45 days after the payment is made, and up to 60 days on eBay after an auction closes or the buyer makes a buy-it-now purchase. As sellers are usually much more savvy about eBay and PayPal's rules and resolution processes, buyers often don't know what their eligibility window is prior to experiencing a transaction problem. That leads to a situation where an unscrupulous seller can mislead and distract their buyer for long enough that the buyer loses eligibility, and then the seller can act with impunity knowing the buyer is no longer able to file a protection claim.

Let me be clear: there is no excuse for a seller to engage in this kind of behavior. Even if the seller sugar coats their delays with apologies and empathetic responses it's still seller abuse if it's just an attempt to deny a buyer redress by waiting out the filing window. It's deception, pure and simple.

I've had some sellers come up to me and tell me horror stories about how abusive buyers had been to them in the past. They often present these as "once bitten, twice shy" scenarios, saying that they'll never be so foolish as to trust a buyer again. Each seller has to make their own choices, and if a seller wants to be very strict and firm in insisting upon terms for their transactions that protect them against unreasonable buyers, that's their call. But if a seller takes that mistrust one step further to justify this kind of manipulative behavior, then that's not acceptable. No seller has the right to deceive their buyers, and it is unreasonable to punish future buyers because of the unreasonable actions of a previous buyer.

All buyers should get this message loud and clear: if your seller has not addressed your concern, and the end of the filing window is approaching, you should file a dispute to preserve your eligibility for protections. Even if the seller seems responsive by email and friendly, buyers must be aware that they should still file. The dispute can be easily canceled later if need be, and no action will be taken against the seller's account. Also, buyers should know that if a seller pulls this on them, they should make sure to leave the seller a neg and to clearly explain what happened. That may protect a future buyer from being "seduced" by the same tactic the next time around.

The experienced member who informed me about this issue ended their message by asking, "Without trust can eBay even exist?" My answer to that is an emphatic no. eBay is based on the premise that people are good. Trust is the lifeblood of our marketplace. There is no avoiding the truth that this kind of cynical, strategic behavior on the part of some sellers cuts to the heart of eBay. I think all of us should have zero tolerance for this kind of thing, for while it may benefit the seller who does it in the short term, it harms all of us (buyers, sellers, and the marketplace) for the long term.

 

Filing disputes beyond the eligibility window

I just had an exchange with a very experienced eBay member who had a seller string them along so that they missed the filing window for an Item Not Received dispute. His question was whether it was still worth it for them to file the dispute (even though they knew they would not be able to follow through with it) just so that eBay would be aware of what happened. He also observed that some of the links to file disputes disappeared after the filing window closed, which made him even more curious.

It’s an interesting question, and I thought the issue would be valuable to raise on the Chatter.

We do in fact welcome Item Not Received (INR) or Significantly Not as Described (SNAD) reports even if you’ve passed the filing window. It’s also true that some of the links to report INRs and SNADs do disappear once the filing window has passed (such as the link in the My eBay drop-down menu next to the item).

The rationale for this is that if someone has missed the filing window it makes more sense to not to urge them to start the process as opposed to starting the process and then telling them they’re ineligible for it.

However, for savvy users who want to ensure eBay is still notified of the situation, it’s still possible to initiate the process to get the report into our system even if you are prevented from proceeding because you’re beyond the filing window. To do so, just file through one of the links that is not connected to a particular item. One such link is at the top of your dispute console – as it is not connected to any particular item, it never disappears.  Another link is available on the INR process help page.

You’ll need the item number to file on these pages (it’s automatically entered if you use the My eBay link, but if you use these links, you’ll need to enter it yourself, as the site won’t know which item you want to file the INR regarding). Once you enter the item number we’ll note the filing in our records even though you can’t continue in the process.

Folks often ask me why we limit the amount of time buyers have to report disputes.  There are some legal reasons – we have to resolve these issues before buyers lose their eligibility to file a chargeback through their credit card issuer, for instance – but we also think it’s appropriate to not make sellers liable for item disputes for all eternity after they make a sale.  In the vast majority of cases the buyer should know if they have an issue within a month or two after the transaction.

Getting MIPS into the Resolution Center

When I first came over to PayPal, I was flummoxed by some of the emails I received from members that told me that their PayPal claims weren’t appearing in their Resolution Center. The only way the members learned about the claims was through email. How could they not be appearing in the Res Center? I thought to myself. Could it be a bug?

I took a couple of the emails along with me on a trip out to PayPal’s operations team in Omaha
and had the folks in the know fill me in. In almost every case, the claim in question was over what was called a “multi-item purchase” (or MIPS). That’s where a buyer purchases multiple items from a seller on eBay and pays for them with a single PayPal payment.

MIPS resolutions are complex
From a resolution perspective, it’s not hard to see why resolving those kind of cases is complex. Say the buyer purchases 8 different items, and the seller ships them in 3 different boxes. Maybe one of the boxes doesn’t arrive, and one of the items that does arrive is different than what the buyer expected. So for one PayPal payment, we may have three INR (Item Not Received) claims, one SNAD (Significantly Not as Described) claim, and four items that have no problems.

The PayPal claims process just wasn’t able to handle a complex case like that. The process was all based around a single item – so for instance, the claim had to be either INR or SNAD, not both. And what about multiple tracking numbers for the three packages?  The process couldn’t handle that.  And what if one item was a bowling ball and the others were beanie babies—there’s only one shipping amount, so how do we figure what portion of the shipping should be refunded to cover the return of one item out of the eight? You start to see how complicated it can all be.

The way PayPal handled MIPS in the past was to work the claim manually. So when the buyer filed the claim, we’d look it up on eBay and see it was a multi-item purchase, and then pull it out of the automated queue. Then we’d work the case by hand, notifying the members of progress through email. Of course, this led to much frustration, as emails can get blocked by spam filters (which lead to time outs and claim defaults), and members couldn’t see MIPS cases in their Resolution Center, so they always had to keep one eye on their inboxes to ensure they didn’t miss a MIPS case.

We needed a better way... and it's here now
Everyone realized that this could not go on.  It was causing frustration and dissatisfaction for our members, and it was giving customer service a headache working all these cases by hand. So we decided to make fixing this problem a top priority, even though it was obvious to us that fixing the problem correctly was going to be an enormous challenge.

I’m very pleased that now, two years later, we’ve finally done it. Last week we launched the MIPS flow on PayPal, a dedicated flow that can handle even the most complex multi-item purchases without batting an eye. It took hundreds of days of development and quality assurance testing, and we thought through every little edge case we could devise. All of that work has paid off, too, as we’ve had no major bugs reported since the launch, and we’ve had hundreds of these cases come through without a hitch.

All your disputes are visible in the Resolution Center
Now sellers can rest assured that all of their disputes are visible in the Resolution Center. There’s no need to obsessively check in-boxes for wayward disputes or claims. (The other flows that used to be worked manually, ACH returns and fraud reversals, were also brought into the Resolution Center earlier this year.) This also means that all disputes and claims are also now visible in your Downloadable Dispute Report, so the DDR is now complete as well.

Huge kudos go out to the team that made this happen, from the pioneers who wrote the first specifications document back in 2004 to the developers, QA engineers, UI designers, and Project Managers who made MIPS a reality this past week. This closes a big hole in PayPal’s functionality, and while it will never get a splashy mention on the front page, it represents a real milestone for the platform.

Which PayPal Buyer Protection Program Applies?

Answer Center celebrity kathiesklown1970 asked me a question the other day about how the various PayPal protection programs work together, and it got me thinking that the answer would make a good blog post.  I know there's a lot of confusion out there on this topic, so let me try to clear things up a bit.

Consider this situation: a buyer sends a seller $1000 via PayPal for an eBay purchase that only has $200 worth of protection. The buyer never receives the item, so he files an Item Not Received (INR) claim with PayPal. The seller has $500 in his account at the time the claim is filed.  If the buyer wins the claim, how much does he get?

First, regardless of where the transaction takes place and with what seller, PayPal recovers all the money we can get from the seller. In this case, it would be $500.

Second, because the purchase was only eligible for $200 worth of protection, and the buyer already got more than that back from the seller ($500), then PayPal would not provide any additional reimbursement. However, if the purchase had qualified for PayPal Buyer Protection (PayPal's top tier coverage, up to $2000) then we would top off the coverage to the full amount of the purchase or the full protection amount (in this case, an additional $500) from PayPal's pocket.

All that takes place behind the scenes, invisible to the buyer. Third, and finally, in one refund we give the buyer all the money they're entitled to. If the payment was PBP eligible, we would refund the buyer $1000 and then take the seller negative (in this case -$500) the amount that PayPal had to pay on the claim.

The coverage the payment is eligible for is important. For instance, off-eBay the buyer can only get money from the seller, there's no additional PayPal protection. However, we do keep trying to get the remainder back from the seller, but with no guarantee that we'll be able to secure it. We also do not take the seller negative, because PayPal didn't have to pay out any money in protections; we just restrict the account until the seller pays the remainder, so we can give the buyer the rest of the money they're owed once the seller pays up.

I understand it can seem a little complicated, especially because the buyer receives their refund in one lump sum without much explanation about how it was computed.  Hopefully this explanation helps to clear things up a bit!

Talking Returns & Refunds on PayPal Radio

Since Jeff mentioned my segment with Jason on PayPal Radio last week I thought I’d follow up with some of the detail around what we discussed.

Sometimes a buyer contacts you after they receive your item and they say they're not satisfied.  You can feel from their tone that they’re thinking about filing a dispute if they don’t have their problem addressed. If you’re ever in that situation, you’ve got a couple options available if you want to avoid a formal complaint, the best of which is probably offering a return.  Another option is to contemplate offering a partial refund.  Jason and I had a good discussion about these two paths.

Research has shown that what buyers really want when they receive an item they are not satisfied with is an easy, simple return. This is probably a legacy of shopping in face-to-face stores, where you can go back to the store and return the item directly if you’re not happy. Top face-to-face merchants can often charge a significant premium over their competitors if they have a generous returns policy, because buyers are willing to pay more if they know they’re not going to risk any post-transaction arguments should they not be satisfied for whatever reason.

If you and the buyer agree to go the returns route, there are many options available.  You can do a return for a replacement item, a return for a full refund, or a return for store credit.  If you have an item that loses a significant amount of it’s value after it’s been open or worn, you may consider charging a restocking fee.  The key thing is to lay all of this out in your item terms and conditions prior to the sale, because introducing it after the fact can definitely make a buyer feel like they’re being abused.

To ensure that you’re protected in a return, insist the buyer uses delivery confirmation with shipping insurance.  Explicitly discuss packaging if the item is fragile.  If the issue is your fault, you should strongly consider offering to pay return shipping, which may communicate your good faith to the buyer and may avoid the neutral or negative.

If you go the partial refund route, be aware that offering a buyer a partial refund can be a little touchy.  You don’t want it to seem like you’re trying to buy them off. Maybe couching it as, “What would you have been willing to pay for the item you received?” Or, “How much do you think it will cost to fix/alter the item so that you’ll be satisfied with it?” would help to set the frame appropriately. Emphasizing your desire to see them satisfied prior to offering the partial refund can also keep the negotiation positive and solution-oriented. You can make the refund through PayPal’s multiple partial refund tool, accessible from the payment details. You can also make multiple refunds up to the amount of the original payment, and your fees will be refunded each time.

I think returns are underutilized on eBay and PayPal, and I’d like to see more tools and talk about them in the boards. It was great to get a chance to chat with Jason about them, too. That guy knows everything PayPal, it’s really humbling.  He’s well on his way to being the Griff of PayPal!

The New PayPal Security Center

The first thing I did when I got on my computer a few days ago was check out the newly launched PayPal Security Center.  It's truly a thing of beauty.  It came live in the US early this week, and plans are for it to spread to much of the rest of the PayPal world in March.  There's now a link to it from the top of every page on the PayPal site, but you can also go to it directly at www.paypal.com/securitycenter.  I think it represents a huge leap forward in helping PayPal users stay safe online. 

The new layout and design is what you notice first.  It was based on extensive in-depth feedback from users, and I think it looks really smooth.  Beyond the appearance, though, the content has been completely re-worked and restructured, with the goal of making it easier for users to find answers to their questions with just a few clicks.  The project was able to consolidate a good number of pages spread confusingly across the PayPal site into a single integrated destination.  Having tried (and failed) to do this myself on other projects I know this is no easy task.

For instance, a new set of guides provides detailed tips and advice regarding high priority topics like Identity Theft, Phishing, Building Buyer Trust, and Managing Chargebacks.  The Report a Problem box, which appears on every page of the Security Center, makes it easy for users to alert PayPal about a spoof email or to file a transaction dispute.  Also, the center makes it easy to get the latest info on new initiatives like the Equifax Credit Alerts program, the PayPal Security Key, and the Virtual Debit Card.

This was an immense project, requiring the collaboration of nearly every part of the PayPal organization.  The project took more than two years of planning and development to become a reality.  Dozens of people contributed mightily to the effort, but kudos especially should go out to the two team leaders, Barry Grant and Dave Steer, for making it happen.

So go check it out and let us know what you think in the Chatter discussion forum.  Hopefully this will be a big step forward in the battle against the bad guys, and it'll help us get the word out to users about how they can keep themselves safe.  And that's good for every single one of us in the eBay and PayPal world.

Visiting Second Life

A few weeks ago I had a chance to spend some time at the San Francisco headquarters of Linden Labs, the creator of a website called Second Life.  For those not acquainted with  Second Life it can sound a little crazy: it is an online virtual space where people can log in from all over the world to explore and interact with each other.  The virtual space is built by the users and rendered real-time in high quality 3D graphics, so you can look at anything and go anywhere.  And as you walk around, you’ll see (and interact with) all the other people who are logged in and exploring at the same time as you.

Residents of Second Life do the sorts of things we do in the face to face world, such as play games, build houses, or hike through beautiful landscapes.  However, because the world is virtual, residents can also fly, teleport from place to place, or ride jet packs.  And because you can change almost every aspect of the virtual world, Second Life is limited only by your imagination.

Though it’s been around for a few years, Second Life has been getting quite a bit of attention lately.  Articles on Second Life have appeared in prominent publications like the New York Times, the Wall Street Journal, and Wired Magazine in the last month or two.  As a result, on October 18, Second Life passed the one million user mark, and they have been growing by almost 50,000 new users a week.  Big corporations have taken notice, and now auto manufacturers and clothing stores are introducing new products and opening stores in Second Life to help generate buzz.

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.

Morality and Other People's Mistakes

My friend Adam Bowman brought a recent thread in the Seller Central board to my attention regarding buyer obligations to sellers.  I thought it was worth sharing here, because it’s a difficult dispute situation that raises some interesting questions.

In summary, an eBay buyer purchased a Halloween costume for her daughter and was sent the wrong size.  The seller admitted to the mistake a nd explained that mailing labels had been accidentally switched at the time of shipping, so the buyer had gotten a different costume by mistake (another buyer also got the wrong size.) The seller told the buyer to wait for further instructions about where to ship the item to so that the problem could be solved.

However, the buyer was happy with the costume, and had already used it. She didn’t want to return the item, and she was especially worried that if she shipped off the costume she had, the replacement wouldn’t make it back to her in time for Halloween (which was the reason why she bought the costume in the first place.)

The situation led to a great deal of discussion in Seller Central. 

The San Francisco PESA Summit

Last week I was lucky enough to attend the Professional eBay Seller’s Alliance (PESA) conference in San Francisco (PESA is an independent group - not an eBay program). It was a great gathering of about 200 or 300 top sellers. As usual, PESA put on a wonderful show, with good food and stimulating conversations. It was held at the Stanford Court Hotel, right at the top of Nob Hill, with amazing views in every direction. The sessions were great, with a lot of interesting information, but (as usual) the best discussions happened in the hallways.

We talked about the challenges facing sellers in terms of margin pressures, the recent crackdown on excessive shipping, the re-balancing of the marketplace, and finding the right mix between stores and auction format listings.  I was very eager to get some feedback on the new PayPal Dispute Resolution process, and most of it was quite positive.  I made several pitches for people to fill out their Customer Service Messages in their seller profiles – it still amazes me that even top sellers don’t know about that feature.  Not all the conversations focused on challenges -- Golf44bob told me some amazing success stories about his recent diversification into the wine business.  So it’s clear opportunity is everywhere out there in the marketplace, you just have to identify it and then go after it aggressively.

I attended one of the roundtable lunches where eBay and PayPal employees outnumbered the sellers almost two-to-one. The PayPal and eBay delegation that came up the peninsula was definitely the largest group, but there were representatives from other companies there as well, including Google, Amazon, Prosper, and many others.  I missed the dinner at the Foreign Cinema in the Mission District, but I heard the food was great (that’s the challenge when the conference is in your home town – you can’t stay out all night gallivanting because the wife expects you home in time to give the boys their bath… lol).

On Friday after the conference ended a smaller group of about 20 or 30 sellers came down the peninsula for a tour of eBay’s north and south campuses. Sadly, as the driver was a little confused about directions, the delayed arrival kept me from acting as tour guide on north campus (PayPal’s home) but several folks from our Community team were more than able replacements.

(It looks like the San Francisco conference pictures aren’t yet up at www.gopesa.org, but there’s some good shots of last year’s conference in Austin. Here’s one of me alongside Steve Abernathy of SquareTrade as he awarded some iPod Nanos in a raffle on the roof deck of the Whole Foods corporate headquarters, with Jonathan Garriss, PESA Executive Director, by our side: http://www.noblespirit.com/PESA_Austin/_DSC2163.jpg)

Let he who is without sin leave the first feedback...

I was on the radio last week with Griff and we chatted for a few minutes about the perennial topic of who should leave feedback first.

I could almost hear Griff sigh on the air when I brought up the topic, because he's probably had this conversation about 10,000 times (and that's a conservative estimate).  Everyone at eBay knows the party line:  don't rush to leave feedback for either your buyer or your seller, because you want to make sure that you know how the transaction turned out at the end before you put a permanent comment on the record.

Now many buyers want sellers to leave them feedback as soon as they pay, because (from their perspective) as soon as the buyer pays they've met all their obligations.  Jeff mentioned on the blog that I was going to talk about it on the radio last week and already a thread started up talking about this exact issue.  camino3x2 posted, "The seller should be leaving feedback immediately upon verifying payment has been received."  glenj1 posted, "In my opinion, the seller is wrong to withhold feedback until receiving theirs. If they get my money, especially when paid promptly, that should be sufficient to warrant immediate pos. feedback."

However, sellers are often wary to leave early feedback, because it essentially gives the buyer carte blanche to give them a neg without fear of retaliation.  That was essentially the point that sclotdebrotx, megsunlimited, and valuesavvy made in the thread.  The buyer may get the item and then make unreasonable demands (for example, asking for more than was in the original item listing, or requiring a refund of shipping and handling) and if the seller has already left feedback then they are totally exposed to a neg.

However, the reason why I brought the topic up with Griff was because I wanted to take the opportunity to say something a little different about this oft-chewed-upon question.  I started out completely on the same page as the eBay party line, but after reading literally thousands of disputes dealing with feedback, and talking with sellers who almost well up with tears thinking about their one neg, I've come around to a different perspective.  Or maybe, a different philosophy.

My first point is this:  people take feedback WAY too seriously on eBay.  Feedback is not a distillation of your character, it's not a divine judgement as to your inner worth, it's not even necessarily "true" in the purest sense.  It's just a bunch of comments from people you've transacted with, nothing more, nothing less.  As such, I think we all just need to take a deep breath and chill out about it a little.

Pierre has said in the past that the one problem with the feedback system is that there aren't enough negs.  For the system to really work, people have to be honest.  And right now we're too scared of negs, so we don't give them when they're deserved and we overreact when we get one we don't deserve. 

I have joked in the past that I sometimes think we should send out a "congratulations!" email to members when they get their first neg (particularly if they already have a good number of positives.)  Sort of a "welcome to the club" email.  The message could say, in essence, there are unreasonable buyers out there, and sometimes you may run across one and you may get a neg you don't deserve.  Or, sometimes you'll come across a seller who is mistreating their customers, and they may mistreat you as well.  If you give them an accurate neg and you get one in retaliation, then you should wear that as a badge of honor.  You took one for the good of community.  Good job.

Savvy eBayers will check out a neg on a potential transaction partner and be able to figure out very quickly if it was just a retaliatory neg or a slap from a chronic complainer.  Feedback requires context, and those who know how eBay works will take the time to get that context.  Also, many sellers will only leave feedback after they've received it, which means that they lose out on positives from buyers who forget to leave feedback first.  Our fear paralyzes us, even to the extent that we are willing to harm our reputation to avoid any vulnerability.

The flip side of this is that we should all also be freer with our positives.  Life is too short to live in fear.  If a buyer communicates well and pays quickly, why wait?  Give them the positive.  It communicates something important about our values: we choose to trust, and we believe that people are basically good.  It's really rare for a buyer to leave a neg for a good seller that leaves them a positive.  It doesn't make us vulnerable to take the first step... in fact, just the opposite.  It frees us from the constant fear and worry of being susceptible to the one unreasonable person out there.

I have seen sellers driven to the brink of madness by a single neg they received that they feel they didn't deserve.  For many of these sellers, their 100% positive rating becomes a curse.  They will spend endless hours mollycoddling unreasonable buyers so as to preserve their "perfect" rate, hours that they could have spent listing more items or giving service to non-whining buyers.  And the irony is, if they got the neg, their 99.9% feedback wouldn't affect their business one whit.

So take the risk.  Do the right thing.  Decide to live your eBay life without fear.  Personally, I think we'd all be a little better off.

Ensuring your home machine is clean

I once suspected my account had been hijacked.  (It turned out it was my own idiocy, but that’s a separate issue.) As a result, I immediately changed my password to protect my account.  A great list of all the things you should do to secure your account is available on eBay right here. 

But even after I followed those steps there was this lagging sense of unease hovering over me afterward… had I done enough?  What else should I do to ensure my computer is clean?  Was there a hacker watching my every keystroke half a world away, waiting for me to type something valuable?

This advice from the Answer Center I found recently is very specific, which is just what you need should you find yourself in a similar situation:

“If you think your account has been taken over, or if you clicked on a link in a spoof email, you need to clean your machine.

First, update your Anti-Virus software.  Make sure you have the latest update from your anti-virus software vendor, then run a very thorough scan . . . scan every file on your computer that your AV software will scan. If you know how to boot your computer into Safe Mode, running the scan, while in Safe Mode is a bit more thorough.

The reason why is that a lot of the newer 'stuff' that steals passwords won't be found by Anti-Virus software, as it downloads . . . only days later, when you run your usual scan, will this 'bad stuff' be discovered. By that time, the scammers can have hijacked your account and listed thousands of dollars worth of 'phony merchandise'. The AV scan will check for any malware of this type.

Also . . . make sure that your Windows Updates are totally current. Go to your Start Button —> Windows Update, to check. You'll be taken to the Microsoft site, and have their site scan your computer for anything it might need. Look, specifically, in the Express Updates or the Critical Updates section(s). Download everything suggested.

You also need to run an anti-spyware scan in addition to the AV scan. If you don’t have a program, there are several very good free programs, such as Ad-aware, that you can download.”

What I Bought on eBay: UPDATE

So I just got an email from a six-year eBay veteran names Jules Maas who has the true story behind the "What I Bought on eBay" video:

"Hi Colin,

I'm a former eBay employee (6+ years) and after reading your blog post today, I thought I might share some background on this video.

This actually took place in Salt Lake City, UT and I was lucky enough to see it live. The performers were eBay employees in the SLC office's IT group (great guys). They performed last, got a standing ovation and WON the competition.