Wouldn't it be nice if ebay enacted or participated in this policy or offered chargeback guarantees?

[anasazirose]

Someone recently posted this link to an article on return fraud.

https://www.merchantfraudjournal.com/return-fraud-how-merchants-lost-25-3b-in-fraudulent-returns/

It's interesting, and the last paragraph reads :

What Tools Are Available to Merchants to Prevent Return Fraud?

Preventing return fraud is now considered an essential service by many of the top online fraud prevention solutions. They use the same methods to prevent it as they do for other forms of card not present fraud. This includes using their collective merchant network to identify users which violate policies frequently, scoring each user, and flagging them in their network.  This means that if one fraudster abuses return policies in one merchant it will be much more difficult for the same fraudster to attempt return fraud on another merchant within the same network.  As machine learning fraud solutions become more effective and sophisticated, they make card-not-present fraud much more difficult to execute.  As such fraudsters will turn to easier avenues to pull off their crimes such as policy abuse.  

That paragraph links to this article:

https://www.merchantfraudjournal.com/top-ecommerce-fraud-protection-solutions/

which seems to indicate that there are indeed merchant protections against chargebacks,  this would be a spectacular thing for ebay to participate in for their customers that are their sellers.

Chargeback Guarantee

Chargeback guarantees are a contractual obligation on the part of a fraud prevention solution to cover the cost of any chargebacks incurred by a merchant using their platform. When merchants use a fraud prevention solution that offers one, they never have to pay the cost of a chargeback themselves.

Anyone have an opinion?  How could we get ebay to offer or participate in something like this?

[slippinjimmy]

If you want that type of insurance coverage go right ahead and buy it from an insurance company.

YOU are the seller, YOU want the protection, YOU pay for it and arrange it.

eBay is a marketplace they are not an insurance company.

Personally I have no need for chargeback coverage any more than I need shipping insurance, I certainly don't want to pay extra for it.

Maybe you are not aware, you can buy insurance for just about ANY type of risk as long as you are willing to pay the premiums. Insurance companies would be happy to have your business, they know exactly how much to charge you in premiums to ensure that the insurance company ALWAYS makes a profit (which means YOU will always lose in the long run).

[valueaddedresource]

Keep in mind, most of those solutions are geared for individual businesses, not marketplaces. I don't believe any of the services on that list even offer the ability to connect to an eBay account - they all work with Shopify, BigCommerce etc. to offer protection for businesses running their own direct ecommerce websites.

I've personally worked for companies that have used two of the names on that list - Kount and Signified. The services work well for what they do, but there is a not insignificant cost. Their solutions are built for and really only effective for larger enterprise level businesses...smaller sellers will likely find that simply putting aside a certain amount from every sale as "cookie jar insurance" to cover chargebacks would be more cost effective.

Also in my experience, they typically only cover stolen credit card/ "not authorized charge" fraud, but other reasons for chargebacks like a buyer claiming they didn't receive a package that shows delivered on tracking or claiming item was not as described are not covered.

And these types of services open up some interesting risks as far as user data as well. Luckily it's not on the list in that article, but a similar SaaS company called Eye4Fraud just recently had a data breach that exposed over 16 million emails and other personal data.

The way these companies work is when you place an order on a direct ecommerce website, your order details including but not limited to name, address, phone number, email, IP address, last 4 digits of CC etc are passed through to the fraud checking company, which then runs that info through their databases and algorithms to come up with a risk assessment and basically gives the merchant a score and/or thumbs up or down on whether the order is fraudulent or legit.

You may not even realize that info has been shared with one of these third party companies, which is exactly what happened with the Eye4Fraud breach - many impacted users had never heard of Eye4Fraud or had any idea how they got their data because they don't have a direct relationship or transaction with Eye4Fraud but some company they bought from online does.

Could eBay either use one of these companies or create their own in house version of that service to protect sellers against chargeback fraud? Sure.....but be careful what you wish for because we know not only would they pass the cost along to sellers, they would very likely find some way to go even beyond that and monetize it for extra profit as well.

[retro_entertainment_collectibles]

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@slippinjimmy wrote:

If you want that type of insurance coverage go right ahead and buy it from an insurance company.

YOU are the seller, YOU want the protection, YOU pay for it and arrange it.

eBay is a marketplace they are not an insurance company.

Personally I have no need for chargeback coverage any more than I need shipping insurance, I certainly don't want to pay extra for it.

Maybe you are not aware, you can buy insurance for just about ANY type of risk as long as you are willing to pay the premiums. Insurance companies would be happy to have your business, they know exactly how much to charge you in premiums to ensure that the insurance company ALWAYS makes a profit (which means YOU will always lose in the long run).

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IMHO the best thing eBay could do as a preventive measure is expose a new metrics system for both sides of transactions and limit new buyer purchases based on item popularities and amounts until sufficient metrics become displayed.

These metrics already exist along with complex one's within the card franchise systems but they surely are not about to gift said data to say eBay.

There's flawless transaction, every one, there's problematic transactions. For sellers display good vs bad counts/ratio and for those that are bad, simple, # of returns.  Every bad transaction should have the merchandise returned unless the seller wants waive return.

For buyers, good vs bad transactions/ratio and a detailed history.  Returns, chargebacks, INR claims, NAD claims.  When a buyer purchases the seller can reject the order based on the above, could even be automated as ratios or simple counts.

For buyers, they too could select a ratio or counts that afford them filtering of listings, so bad sellers don't get the exposure.

Certainly not perfect and could likely be much farther refined but conceptually it solves some problems.

[dhbookds]

As said.........there would be a cost to sellers........Neither Better Half nor I have experienced much fraud......each with 20+ years experience.......maybe 2-3....... so the cookie jar application is fine for us........ 

I'm guessing there are certain categories that may have alot more than we experience.....but I really don't want to subsidize those.....selfishly speaking......  And I don't want "new" buyer limits simply because that may scare off good buyers.........

[vip2054]

WHY WOULD "GOOD OR REPUTABLE BUYERS BE SCARED OFF OF TRYING TO PREVENT FRAUD????

[southern*sweet*tea]

Chargeback fraud will only decrease when the banks and credit card companies decide they want it to decrease.  As long as fraudsters are paying outrageous interest rates for credit cards, the card companies will continue to turn a blind eye and coddle those people.

The card companies do NOT care about merchants, only the user of their product, and they really don't care about them.  They just want all those interest payments.

[fashunu4eeuh]

“MHO the best thing eBay could do as a preventive measure is expose a new metrics system for both sides of transactions and limit new buyer purchases based on item popularities and amounts until sufficient metrics become displayed...”

Do not think that there would be any retailer anywhere that would be willing to inform new buyers that, sorry, you can only purchase X amount of goods from us until you prove you are a trustworthy trading partner. (That would be akin to blocking zero or low feedback buyers.)  Or do i misunderstand?

[dhbookds]

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@vip2054 wrote:

WHY WOULD "GOOD OR REPUTABLE BUYERS BE SCARED OFF OF TRYING TO PREVENT FRAUD????

Buyers don't understand shipping ...........much less that there is fraud on the site.........some seller rejects their purchase simply because they are a new buyer and have no history...... you think he's going to continue to try to buy here?  that buyer is lost to me and other sellers.........   Sellers scream for sales........which means new buyers with no history.......some may be/go bad.......but we need the good ones.........

[rugerskick]

As normal with a new idea other places are using and embracing, the status quo continues to defend and bring up perceived negatives about <insert anything ebay isn't doing being discussed as a potential benefit to sellers>.

Ebay could certainly implement this, as a seller-selectable, either free or pay to use, option. Either a cost charged per individual sale, per month of sales, or per annum of sales.  

Ebay already tracks negative buyer data, they know the buyer profiles that cause trouble.  This would allow Ebay incoming money to help clean up and maintain the site of problem scam buyers.

[rugerskick]

Its not blocking.  Its simply having a limit in place on a new buyer account.  Credit cards have credit limits.  Brand new cardholders can have low levels of credit on a new account initially and after they prove/show they are responsible and not an outright fraud/scammer, they can ask to get it increased.

Further, like a credit card, an ebay buyer account is a privilege, not a right.

Also note a credit card company watches new accounts like a hawk and they prosecute credit card fraudsters.  It would be beneficial if Ebay took the same kind of actions and buyer fraud as serious as the credit card companies do.

[retro_entertainment_collectibles]

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@fashunu4eeuh wrote:

“MHO the best thing eBay could do as a preventive measure is expose a new metrics system for both sides of transactions and limit new buyer purchases based on item popularities and amounts until sufficient metrics become displayed...”

Do not think that there would be any retailer anywhere that would be willing to inform new buyers that, sorry, you can only purchase X amount of goods from us until you prove you are a trustworthy trading partner. (That would be akin to blocking zero or low feedback buyers.)  Or do i misunderstand?

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I'm not speaking of external of eBay.  Essentially it's reserving the right to transact based on a history.  You can cancel orders now and you take a metrics hit, you might do that based on some feedback left albeit no negative feedback to buyers.  You can block buyers now based on perhaps a bad prior transaction with you.  What I see as a perhaps useful mechanism is to be able block, accept or decline based on ratios.  So say Buyer "X" has 10 purchases, 2 of which have NAD claim, 3 of which were return whatever the reason, 2:1 ratio or 50%.  I might put a limited on my account, I want 90% so 1 in ten transactions might be a return, chargeback, what all.  If a buyers account doesn't meet that 90% criteria they never even see my listings.

Further, buyers might have similar option, if seller "Y" has a 70% performance curve in transactions, well they might want only work with 90%'rs.  So, any seller under that won't even appear to buyer.

Eventually there is a net effect of the cream of the crop rise to the top.  It raises the bar for all transactors across the board.

I would suggest as portion of such a mechanism there's an expirer time or mechanism.  Still going to have false claims, bad buyers/sellers who are receiving impacts on metrics yet time and performance can have those "Fall off" within perhaps a "Tier ratio."  That is to say how much the buyer or seller transacts within a timed "Tier."  So seller who sells a ton mostly w/o issues have a longer time tier to CORRECT problems where-as a "Good seller" via tier ratio would have a shorter time before fall offs as they dont sell as much.

There's actually a variety of ways to look at these types of algorithms.  The Top Rated Seller program for example is a mechanism whereby consumers can perhaps gain a bit more confidence buying from a "TRS."  Point all being using two metrics systems that interlink to try match buyers to sellers and afford both parties confidence eventually "Bubbling up" cream of the crop and suppressing that which is not.

Part of the search engine I hear does just that with sellers, based on metrics attempts push down or suppress problematic sellers.  Also I guess does so w/ dead inventories.

I dont believe eBay has access to buyer card franchise/banking data per consumer or seller just as any merchant doesnt.  One of things Amazon/Walmart CAN enjoy as they both have their own card processing leg, aggregate processor.  Like said before we'd a merchant account through EMS System yet the processor was Wells Fargo, Amazon and Walmart have their own "Wells Fargo."  They went that route to save money and have better risk assessment.  When you consider how many card transactions a Walmart Inc. do in a day at say 2.35% commission to aggregate processor, huge amount of money.

Again for new buyers put a limiter on spending until they establish themselves and yeah, that's probably needing be a pretty complex algorithm maybe even base it on questionnaires.

There are no easy solutions here towards bad buyers nor really even bad sellers as eBay is not a card processor nor do they have chain of custody over merchandise.