What eBay buyers need to know about DSRs and ratings

I have posted quite a few things on eBay policies and Detailed Seller Ratings over the past year, in an effort to educate eBay buyers about the complicated and often misleading Detailed Seller Rating system – that little "star" system they ask you to leave ratings in after you leave your regular Positive, Negative, or Neutral feedback.

To nutshell some of the major issues by means of a vivid example, here’s a for instance: If you are leaving a rating, and you hover over the Fourth star out of Five, the system will tell you that the Fourth star is a pretty good rating.  Works like this:

                                                 one star                          two                       three                        four                        five

Description                            very inaccurate              inaccurate          neither*                    accurate                very accurate
Communication                    very unsatisfied            unsatisfied         neither                     satisfied                very satisfied
Shipping speed                    very slowly                     slowly                   neither                     quickly                   very quickly
Shipping charges                 very unreasonable       unreasonable   neither                      reasonable          very reasonable

[* the middle column consists of such mysterious possibilities as "neither inaccurate nor accurate," "neither satisfied nor unsatisfied," "neither quickly nor slowly," and "neither reasonable nor unreasonable."]

Now, one might think that four star ratings are good – the buyer is satisfied and considers the shipping fees reasonable, etc.  BUT, while the language of these four-star DSRs may sound like "good" ratings, eBay punishes sellers for receiving them. Remember how in school, a 3.5 GPA might’ve got you on the A/B honor roll?  So a solid mix of As and Bs was considered a good report card, got you a quarter from Grandma, maybe even got you on the Dean’s list in college?

Well, a 3.5 GPA on eBay is BAD NEWS.  eBay considers that sellers receiving less than 5 star ratings are not satisfying their customers.  If ratings fall below 3.5, even if they’re all accompanied by positive feedback, eBay has a number of nasty fee hikes, search listing downgrades, and other surprises in store. The bottom line is that you if you are satisfied enough with the seller to consider doing business with them again, and you are not interested in seeing their eBay shops or listings shut down and them out of business on eBay, then a Four Star Rating is the equivalent of a bad rating.  Anything below a four star rating sends a clear message: "I am dissatisfied."  Many sellers realistically see anything below five stars as a message along the lines of "I will not be shopping with this seller again."  And there’s a very real contribution to a very likely consequence, which may be summed up thus: "I would not mind seeing this seller gone from eBay." 

Anything less than a 5 star rating is a punishment for your seller.  If you do not have it in for your seller, then please consider contacting him or her if you are less than "very satisfied" and giving him or her a chance to address your concerns.

None of this is news to any of you who have been reading this blog for a while, and if you are a regular eBay shopper, it’s probably not news to you either, regardless of whether you read this blog.

But here’s something newer that you might not know about.  Before, eBay confined itself to raising sellers’ fee rates, lowering their placement in search results, and similar tactics designed to punish sellers who get less than 5 star ratings.  Now, however, PayPal is in on it, in some cases taking money out of sellers’ hands and holding it until the buyer leaves positive feedback.

For larger sellers, those industry giants who sell thousands of dollars’ worth of items a week or month, this might not be a big deal. They have bigger "cushions" in their bank accounts and it doesn’t make them suffer as much to have to ship an item before they have received their funds.

But picture a smaller seller, someone who sells handmade items or gently-used electronics, for instance.  Imagine you buy a heavy piece of electronics equipment from that seller, for $200, and the shipping fee is $70.  If PayPal chooses to freeze those funds pending your leaving positive feedback, then the seller not only does NOT get paid for the item yet, he or she also has to find $70 from somewhere in order to pay the postage on your item.  In some cases, the seller might not get reimbursed (in the form of having the funds released into their accounts) for weeks.  If you are not the kind of buyer who leaves feedback right away or at all, your seller may have to wait 21 days to have the funds released.

There are several factors involved in PayPal making a decision to freeze funds until the buyer had given evidence of satisfactory receipt of the item, but DSRs below 4.5 are in that short list of reasons.

Obviously this makes eBay a much bigger risk, suddenly, for smaller sellers who are just getting established, for occasional sellers who scour flea markets to bring a few unique and interesting items to your desktop, for folks on fixed incomes who sell on eBay to have enough money to buy a new book or new area rug for their apartments once in a while.

Bottom line: less than 5 star ratings will drive sellers like this off of eBay, meaning that eBay will increasingly be dominated by mega-sellers.  Goodbye, internet flea market and funky gift shop, hello Online Strip Mall.  Goodbye, pleasant discounts and surprising "steals," hello smaller sellers’ item prices skyrocketing because buyers must now purchase their own insurance, pay higher listing fees, keep enough money free in their PayPal or banking accounts to cover fee freezes and pay shipping out-of-pocket, etc (I could go on about how much more it costs to run an eBay store than it used to, but just trust me – it’s a lot).

For those of you who have noticed it’s harder to find cool, funky, unique gifts on eBay at a reasonable price, or gently used clothing at a fraction of the mall price, or whatever it is you used to shop on eBay for, you may find that your sellers are leaving eBay and going to places like the following (and sellers, if you’re frustrated with the way eBay and PayPal are treating you as a small seller with a low profit margin, then you might want to check these places out):

Etsy.  "Your place to buy and sell all things handmade."

Bonanzle: "Find Everything but the Ordinary."

Bidtopia.

eBid.

OnlineAuction.com

Webidz.com

More on this later, I’m sure, but this is a newer development that has probably affected your favorite smaller eBay sellers, and you need to know.

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