A new study concludes that some eBay users are artificially boosting their reputations on the Internet auction Web site by selling items for practically nothing in exchange for positive feedback from the buyer. Sellers with good reputations can seek higher prices on items they sell, according to the study out of the University of California at Berkeley's Haas School of Business.
Under eBay's reputation system, buyers and sellers can submit feedback to each other after a transaction. Some merchants are selling items at minimal prices, such as 1 cent. They then hope that grateful buyers will give them positive feedback, ask for it or offer to provide positive feedback in exchange, according to professor John Morgan, who co-authored the study. One merchant was selling written compliments in exchange for positive feedback, Morgan said.
Researchers analyzed feedback listings during the second half of 2005 and during one month in the spring of 2006. They found that a high percentage of feedback listings for low-price or seemingly valueless items sold during those periods had a Buy It Now option and a price of a penny. Sellers lose money on such sales because they pay eBay 25 cents for listing the item and 5 cents for the Buy It Now option. "Such a listing makes no economic sense unless the seller is trying to increase his feedback rating," Morgan said.
The authors of the study even bought literature on eBay that backs up their theory. They paid three different sellers a penny each for a publication titled "Positive Feedback Ebook." The document advised eBay users to buy 100 different items that cost almost nothing in order to get a positive feedback score fast and easily.
Catherine England, an eBay spokeswoman, said she could not comment on the specific report but said the problem of feedback manipulation is not new to eBay and is not a particularly widespread problem. The company has a team of 2,000 workers worldwide that monitors for trust and safety abuse problems and suspends or locks out accounts of policy violators, she said.
The site has 105 million items listed at any give time, with about 6 million new items posted daily, England said.