From Start Up Journal:
Online-auction sellers also can apologize to unhappy customers, but sometimes the damage can't be repaired. After every sale on eBay, for example, buyers and sellers are asked to rate their dealings with the other person, plus offer a brief opinion. If a negative comment is posted, anyone considering a transaction with that buyer or seller can read it.
The ratings, called "feedback" scores, are all-important to many eBay users. The scores are cumulative and appear beside every eBay member's name, along with the number of transactions used to determine it.
A buyer leaving a negative rating risks receiving one back from the seller, or vice versa. Since the scores are cumulative, one negative rating won't do much to hurt the score of a member who had dozens of positive transactions. But it can destroy the rating of a member who's only made a few sales or purchases.
Mr. Ferrante always gives refunds to his eBay customers to keep his positive feedback score 100%. He's been selling his personal collection of entertainment memorabilia on the auction site since 1997. "Feedback is the foundation on which you can make any and all claims of credibility," he says. "It's your identity, your firewall." He estimates he loses about $200 a year in refunds to unhappy customers who buy from him on eBay and his personal Web site.
Some sellers find they can't avoid negative ratings, no matter how hard they try. Buyers new to the site and unaware of the importance of feedback are most likely to give negative ratings, says Jan Ovshani in Houston, who has been selling his original oil paintings on eBay since November 2003.
In May 2004 he noticed a flaw on a $48 painting he was about to ship to a new eBay user. He couldn't send a replacement since the artwork was original, so he gave the buyer a full refund, including shipping fees, and apologized via e-mail. The customer, who had completed only three prior eBay transactions says Mr. Ovshani, never replied and left negative feedback, despite accepting the refund.
Mr. Ovshani, in turn, left the buyer negative feedback, which lowered the person's feedback score by 30%. Mr. Ovshani's score dropped by less than one percent and is now 99.5% based on 379 transactions.
Negative feedback doesn't have to remain permanent on eBay. It has a mutual feedback-withdrawal service that allows buyers and sellers to remove feedback left for one another. Of course, both parties must participate for this to work. Mr. Ovshani asked his unhappy buyer to complete such a transaction, but the buyer didn't reply to his request, and the negative feedback stayed.
EBay also will remove negative feedback for buyers and sellers if the comment breaches its feedback policy because it contains obscenities, personal-contact information, links to other Web pages and other violations.
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