5/15/09

eBay makes a genuine reversal in its policy on suspected fakes

EBay created a stir amid its sellers recently when it announced a policy that would have required buyers to destroy items they thought were counterfeit, without giving sellers a chance to prove the items were real. EBay has come up with a revised policy.

Katie Evans , Managing Editor, International Research

 

Under pressure from luxury goods manufacturers to prevent fake handbags, perfumes and other items from being sold on eBay, the online auction giant has taken several steps in recent years to keep counterfeit goods off of eBay. But a recent proposal from eBay Inc. created such a storm of protest-and disbelief-that eBay quickly reversed itself.

The controversy began earlier this month when eBay announced a new policy that was to take effect in June, requiring a buyer who suspected an item she purchased on eBay was fake to destroy the item before eBay would reimburse her. EBay’s exact wording was: “For covered claims that meet the conditions and are not excluded, buyers are required to destroy an item if they claim it is not authentic. Once a buyer confirms destruction of the item, eBay will reimburse the buyer.”

EBay sellers immediately protested that they would have no opportunity to prove that the item was genuine if it had already been destroyed. Sarah Davis, founder of Fashionphile, who has been selling luxury handbags on eBay since 1999, says it would be easy for a consumer who buys an authentic Hermes bag from her for $10,000 to take a picture of a shredded $100 fake, tell eBay the item’s been destroyed and demand a refund. “If it had taken effect, I would have had to pull my listings,” Davis says of the proposed eBay rule.

However, eBay reversed itself in a blog posting yesterday by eBay senior counsel Scott Shipman, outlining a new procedure to be followed if a buyer believes an item is fake. If the buyer and seller cannot settle the matter themselves, the buyer is required to send the item back to the seller, with eBay or the buyer paying the return postage. If the item is determined to be counterfeit it can be considered a violation by the seller of eBay’s policy against selling prohibited items. The new policy also states, “If eBay determines the buyer is not acting in good faith, eBay may restrict or eliminate their ability to return items or make future claims.”

Shipman says the new policy, which becomes part of the eBay user agreement, is needed to protect sellers against inaccurate counterfeit claims, assure buyers that items are authentic, and to maintain the integrity of the eBay marketplace.

“This is a much more fair and balanced treatment for the ‘I think this is fake’ situation,” says Scot Wingo, president and CEO of ChannelAdvisor Corp., which provides technology that enables merchants to sell on eBay. “It shows that eBay is really listening and responding quickly to seller concerns right now-a complete 180-degree change from how they acted in the recent past.”

Davis also was pleased by the turnaround. “I’ve got to hand it to them for listening and making the needed changes before there was any time for the policy to do any real damage,” she says.

Several luxury goods manufacturers have sued eBay in recent years, claiming it was responsible for the sale of fake goods through its marketplace. A French court this month rejected a lawsuit by cosmetics and perfume manufacturer L’Oréal, ruling that eBay had met its obligation to prevent counterfeit items from being sold on eBay. However, eBay has lost some previous lawsuits, and last year was ordered by a French court to pay more than $60 million in damages related to claims from luxury goods makers.

Topics:

Auctioneering, counterfeit consumer goods, Criticism of eBay, Mobile software, World Wide Web

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