EBay feedback cutoff kicks in Monday

The most controversial of the e-commerce site's policy changes has smaller merchants spooked about losing their voice.

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5 ex-eBayers: Where they sell now5 ex-eBayers: Where they sell now5 ex-eBayers: Where they sell now
EBay's planned fee and feedback changes have sellers threatening an exodus. Here are five sellers who already left, and how they've rebuilt their businesses elsewhere.
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(FORTUNE Small Business) -- The controversial new feedback policy eBay announced in January is slated to start taking effect on Monday, removing sellers' ability to leave neutral or negative feedback for their buyers.

While eBay (EBAY, Fortune 500) officials hope the change will benefit both buyers and sellers by creating a more reliable marketplace, some small merchants see this as another reason to move their wares elsewhere.

When PowerSeller Carol Barton, 49, first heard about the coming revisions to the feedback policy in January, she says her first thought was, "I can't believe eBay is actually going to do this!"

Barton has begun preemptively leaving notes in every package she mails asking her eBay customers to contact her before posting a bad rating. Other sellers are taking more drastic action: A number have posted store notices saying they will no longer leave any feedback at all in protest of eBay's new policy.

EBay officials say the feedback change was necessary to counter a growing trend of sellers leaving retaliatory ratings for buyers who give them negative ratings.

"What we discovered through research was that any negative feedback that the buyer gets reduces their purchasing or willingness to purchase within the marketplace," said Brian Burke, eBay's director of global feedback policy. "The goal behind the changes is really to make sure that we've got buyer accountability and seller accountability."

To make up for limiting public feedback options for sellers, eBay is giving its vendors more behind-the-scenes tools to protect themselves against unscrupulous buyers. Starting May 27, vendors will be able to tighten buyer restrictions and block shoppers who have been reported for policy violations, such as feedback extortion or nonpayment, from buying or bidding on their items. Additionally, an improved sellers' "reporting hub" will enable merchants to report problem buyers to eBay officials.

Barton, an antiques dealer from Kansas City, Mo., doubts that eBay will hold up its end of the enforcement bargain. "Over the years, I've reported fraud and negative behavior and never seen any action," she said. "I don't have a lot of faith in eBay's responses. But, maybe their customer service will change too."

EBay's feedback change is part of a comprehensive revamp that has also brought changes to eBay's fee structure, search algorithm, and PayPal policies. Small merchants have been particularly vocal in their displeasure about the changes.

Since the policy revisions were put into effect in February, Barton has slowly moved most of her antique and silver charm sales to other auction and retail sites, most notably Ruby Lane.

"I think the changes, all of the changes, are geared toward large sellers," she said. "That's who they will benefit."

Linda Hatchett, 60, is less concerned about losing her ability to leave negative feedback than she is about the new, stricter consequences of receiving bad ratings from buyers. This week, she closed her LP store on eBay. Her concern: "If I sell less than 20 items one month, one negative feedback would raise my dissatisfied-customer percentage high enough to cause a PayPal hold or bury me in a Best Match search."

Sellers that she has communicated with through a private, off-site forum are also worried that rival vendors might start sabotaging each other's reputations by unjustly leaving harmful feedback under cover of separate eBay accounts used for buying.

"I think we're in a very hostile seller situation," Hatchett said. "I have no clue why eBay is doing it, but it scares me."

The Henderson, Nev., entrepreneur plans to sell her merchandise on her own Web site, set to launch in June. She intends to continue using eBay for bulk sales of excess inventory, but most of her e-commerce will be handled elsewhere.

Veteran eBay merchant John VanCott, who sells vintage porcelain signs and automotive items out of Orem, Utah, has also moved elsewhere in response to the recent changes.

"I am aware of [the feedback changes], but I haven't paid a lot of attention to all of them," he said. "That's because I switched a lot of business over to other sites."

EBay's increased "final value" sale fees and the growing presence on the site of large vendors have driven him to peddle his inventory through local online classifieds and competitor sites, including OnlineAuction.com. VanCott, 42 and a 10-year eBay vendor, now sells only about 30% of his wares on eBay.

Antiques dealer Barton said it's the cumulative effect of eBay's changes that has smaller merchants spooked.

"[EBay] is changing to become a big supermall, and that doesn't have a place for small sellers like me," she said. To top of page

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