Criticism of eBay - Reasons Why eBay Sucks!
eBay Customer Support claims that its data indicate that less than .1% of all transactions result in a confirmed case of fraud. One mechanism eBay claims combats fraud is its feedback system. When a user feels that a seller or buyer has been dishonest, a dispute can be filed with eBay. An eBay seller may be suspended if there are too many complaints made against them. eBay does not allow sellers to give negative feedback to buyers.
Until June 2008, eBay allowed Mystery Box and Mystery Envelope auctions. However, these are almost all fraudulent auctions since the seller can manipulate the box contents to make sure it is never a good deal for the buyer. Mystery Envelope auctions offer cash prizes of an undisclosed amount to auction winners. The auction winner usually receives from 10% to 30% of the money he paid for the auction back in 'winnings'.
Scammers like to target new members to take advantage of their unfamiliarity with how eBay or PayPal works. New members can be easily tricked into thinking there is a special Web site they should make payments through (which is in fact a fake site set up by a scammer) or they may be tricked more easily into using a fake escrow company.
Many complaints have been made about eBay's system of dealing with fraud, leading to its being featured on the British consumer rights television program Watchdog. It is also regularly featured in The Daily Mirror's Consumer Awareness page. The complaints are generally that eBay fails to respond when a claim is made.
Frauds that can be committed by sellers include:
- selling counterfeit merchandise – see below;
- shill bidding - see section below for more details;
- selling bootleg merchandise;
- receiving payment and not shipping merchandise;
- shipping items other than those described;
- giving a deliberately misleading description;
- knowingly and deliberately shipping faulty merchandise;
- denying warranty exchange after pre-agreeing to RMA of DOA merchandise;
- knowingly selling stolen goods;
- misrepresenting the cost of shipping;
- using bulk shipping prices to knowingly mask much higher costing, individual return shipping
- using pseudo-accounts to make high nonpaying bids on similar items that competitors are selling
Frauds committed by buyers include:
- PayPal fraud, namely filing a false shipping damage claim with the shipping company and with PayPal;
- Friendly fraud: receiving merchandise and claiming otherwise;
- returning items other than received;
- the buyer sending a forged payment-service e-mail that states that he or she has made a payment to the seller's account (an unsuspecting seller may ship the item before realizing that the e-mail was forged); and
- making a low bid then using pseudo-accounts to make high nonpaying bids in an attempt at gaining a low second chance offer price.
Fraud is prevented by:
- third-party businesses, such as CheckMEND, compiling lists of stolen goods from local authorities and businesses so eBay consumers can check to see whether the goods they are buying are stolen; and
- third-party software that could potentially eliminate eBay account hijacking by alerting users if they are being tricked into going to a bogus, or "spoof", Web site (see anti-phishing).
Shill bidding is undisclosed vendor bidding that is used to artificially inflate the price of a certain item. It is usually carried out with "shill" account(s), by either the seller under an alternate account or another person in collusion with the seller. Shill bidding is nominally prohibited by eBay. However, eBay has been criticized for not doing enough to combat the problem. Indeed, it can now be demonstrated that eBay actively facilitates such allegedly criminal activity. Still, there are techniques, like sniping, which let buyers avoid shill bidders.
It is estimated that about a quarter of all ancient coins and about two-thirds of all antiquities sold on eBay are modern forgeries. In March 2008, Professional Coin Grading Service issued an alert noting counterfeit PCGS slabs and various United States and Chinese coins originating from People's Republic of China being sold on eBay.
In court papers introduced by attorney for jeweler Tiffany & Co., it was claimed that researchers for Tiffany had determined that over 70% of the Tiffany silver jewelry offered for sale on eBay was fake. Tiffany & Co. filed a lawsuit against eBay in 2004 which claimed that eBay profited from the sales of counterfeit Tiffany items that infringed on its trademark. On July 14, 2008, a Federal District Court judge ruled that eBay does not have a legal responsibility to monitor users selling counterfeit items. In 2010, the Second Circuit affirmed this decision (see Tiffany v. eBay).
eBay does allow buyers to rate any seller using a feedback system that allows both positive and negative comments; however, sellers are prohibited from leaving anything other than positive feedback for buyers. Before eBay's January 29, 2008, policy-change announcement, at the end of every transaction, both the buyer and seller had the option of rating each other. Both parties had the ability to rate each other and the experience as a "positive", "negative", or "neutral" rating and leave a comment no longer than 80 characters. As of CEO's John Donahoe's announcement however, the option for sellers to leave anything other than positive feedback to buyers (in response to an outcry from buyers who received negative feedback in retaliation for leaving the seller a negative) was removed.
According to critics, weaknesses of the feedback system include:
- Small and large transactions carry the same weight in the feedback summary. It is therefore easy for a dishonest user to initially build up a deceptive positive rating by buying or selling a number of very low value items, such as e-books, recipes, etc., then subsequently switch to fraud. eBay has since restricted digitally-delivered items to classified listings, which do not involve feedback.
- Sellers can also attempt to boost their own feedback by buying their own items with alias accounts, and leaving positive feedback for their main selling account.
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