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PayPal, graphs and the trouble with feedback

By Sue March 4, 2010 - 3:52 pm

PayPal sent out a marketing email this week to UK-based eBay sellers, trying to encourage them to banish cheques and postal orders from their listings. The justification, they said, is that DSR scores left by buyers who’ve paid with PayPal are so much higher than those for transactions paid in other ways. Here’s the graph:

paypal graph

It’s an interesting discrepancy, because on the face of it, none of these scores should be affected by payment method. Most listings on eBay UK must now , so if payment’s made by cheque, that’s by the buyer’s choice.

Frankly, I’m not surprised to see the “dispatch” DSR lower for cheque payments: buyers, often, think of “dispatch” as “the time between clicking the Buy It Now button, and receipt”; they don’t think “oh but it took me a week to put a cheque in the post”, they just think “I had to wait ten days for delivery”. No, it’s not fair – but as my old granny said, whoever told you life was going to be fair.

I can *just* about understand for the difference on the communication score too. With a cheque payment, there is so much more to go wrong. Cheques can not get posted or go astray in the post or be untraceable to a transaction or just not fit into the normal automation of business – so I can understand that communication might be more fraught, and get marked down.

But item description? How does payment method affect whether my item’s like I described it or not? Answer: it doesn’t. It can’t.

And more than anything, how can payment method push the always-worst DSR, P&P, down from a safe-ish 4.74 to a downright dangerous 4.6?

I’ve said it before and I’m going to keep saying it: eBay feedback is a farce. Specificially, the DSRs are a farce and do not do what they were designed to do.

Once upon a time, eBay talked to some buyers and what they found was that those buyers were afraid to leave negative feedback. Some buyers asked for a way to say “the P&P was a rip-off” without the seller seeing the red dot and knowing what they’d done. Others said they wanted to be able to say the P&P was a rip-off without leaving a neg when they were otherwise happy. And so the DSRs were born.

But what PayPal’s figures show is that this granular marking isn’t what buyers are doing. Someone who is annoyed that their cheque payment delayed delivery by two weeks is marking down on *all* the criteria. Someone else who’s annoyed they got a UID before they posted their payment is marking down on *all* the criteria. It’s quite clear from PayPal’s figures that buyers who pay by cheque are generally less happy – but it’s equally clear that some of the things that they’re marking sellers down for cannot possibly be related to the payment method. Buyers are using these very specific scores to reflect their feelings about the transaction in general.

Sellers should take these figures to heart. The pro-cheque argument is often made that buyers should be allowed to pay how they like: well, not at the expense of my TRS badge should be the response to that. If nothing else, cheque buyers need extra help, careful handling, nurturing through the transaction.

But eBay should take these figures to heart too. They show, quite obviously, that the feedback system is not right.

  • Caroline
    7 years ago

    This is the reason I’m considering going completely free P&P. At the moment it’s free with a spend of £10 or more, I have a roughly 60-40 split of customers who pay P&P and customers who don’t. The 3s & 4s percentage for customers who pay P&P is nearly double that of those who don’t, across all four markers, not just the P&P one.

    • 7 years ago

      Interesting, thanks Caroline. Anyone else finding this?

  • 7 years ago

    When I read this my first thought was the effect that private sellers have on these figures. Mostly private sellers are more likly to offer anything else rather than have to take paypal as it’s more they loose. And maybe this is often half the problem with ebay that the figures have private sellers in so they will alter the results…I could be wrong tho and they are not included before anyone says!

    • 7 years ago

      There’s nothing to say that private sellers *aren’t* included, Stu, so you may be right….

      private sellers are more likly to offer anything else rather than have to take paypal
      I did have a look at this. PayPal has to be offered on all eBay UK listings except some Vehicles, Services and Property categories. PayPal is automatically included as a payment option and can’t be removed when you list.

      I had a good dig around for sellers saying that they didn’t really take PayPal and so on – and actually, there were very few listings pulling that trick as far as I could see.

      Of course, it’s possible that sellers are listing with PayPal and not notifying buyers til the listing has ended that it’s cheque only – but I can’t honestly imagine that that is that widespread.

  • 7 years ago

    This chart simply shows that Feedback can be manipulated and is not a fair system.
    What annoys me the most however is that ebay / Paypal are trying to manipulate sellers.

    Why MUST sellers offer Paypal?

    Why cant we use other payment gateways?

    If your ebay account is suspended for any reason it’s possible to continue trading on your own web site and still accept still paypal payments. However if your paypal account is suspended then you cant accept ebay payments or paypal payment from your own shop sales.
    So perhaps sellers who have their own web site (which is a growing number) should consider alternative payment methods.

    I’ve got an alternative payment gateway lined up – just in case.

    Where is the competition? Talk about a closed shop!

  • JohnC
    7 years ago

    So what is your typical cheque payer? I’d guess they’re older than the ebay average user, perhaps more (small c)conservative.

    Is ebay expecting us to believe that such people are less patient and more likely to trash DSRs than other users!

    Don’t believe it for a moment, it’s scare marketing by paypal.

  • BigPoppa
    7 years ago

    Yes, the feedback system needs re-jigging. However, the chart is still correct, buyers that pay with Paypal, leave higher DSR’s, as to why etc is anyones guess, but that’s not the point Paypal are making.

    The message is clear, want higher DSR’s, don’t take cheques. Choice for buyers is not always a good thing.

    • 7 years ago

      want higher DSR’s, don’t take cheques
      Yup. As I said in the penultimate paragraph.

  • 7 years ago

    Ultimately this presumes that PayPal’s figures aren’t massaged to boost their ratings and downgrade everyone else’s.

    Notice there’s an asterisk attached to these numbers?

    “* DSR scores calculated for total eBay UK sales paid with PayPal vs. eBay UK sales not paid with PayPal (Nov 2008 – Jan 2009)”

    3) When a buyer doesn’t leave a DSR score, is this not counted, or is this considered a 0 or 1 ala Rob Chestnut neutrals equal negative?
    2) This is not a 1 year or lifetime score. It’s taken during the Christmas shopping season. Expectations are high. So are returns.
    1) The “not paid with PayPal” can include non-paying buyers, reversed transactions, fraud, etal. Technically any PayPal transaction that’s reversed is “not paid with PayPal”. That chart could equally indicate a trend toward an increase in bad transactions, with payment type being Irrelevant.

    Unless PayPal breaks down in detail how these statistics were derived, it’s not a great idea to take those numbers at face value.

    /*

    “Even if you can’t find a source of demonstrable bias, allow yourself some degree of skepticism about the results as long as there is a possibility of bias somewhere. There always is.”
    Darrell Huff, How to Lie with Statistics

    • jimbo
      7 years ago

      My hunch would also be that the type of items that people tend to pay for with a cheque are also the kind of items that attract low DSR’s

      eBay could do a nice promotion: Boost your DSR’s don’t sell second hand goods.

    • northumbrian
      7 years ago

      too right jimbo
      nowt to do with paypal as such ,its the dildos that buy stamps and coins that tend to send cheques , then whinge and moan

    • JohnC
      7 years ago

      Is that a technical term for describing paying customers? It seems an odd way to refer to them.

    • northumbrian
      7 years ago

      certainly is ,after 30 years in business you get to be very technical

    • radams
      7 years ago

      Sounds a pretty accurate term :)

    • JD
      7 years ago

      Do rabbits collect stamps then?

  • 7 years ago

    People who ask me to take chqs or bank transfers don’t have paypal, are pissed off with paypal or both. They are usually grateful to me for offering alternatives. It’s all about communication… When I get the chq I email the customer and set their expectation on clearing times etc . I usually post the item same day I cash it, so to exceed their expectations!

  • theroundearth
    7 years ago

    The graph is, on purpose, very deceiving.
    The small percentage differences between check and Paypal payment scores are shown as they were bigger than 100%, on average.

  • Goodrockingtonight
    7 years ago

    One wonders how many buyers mark the seller down when they pay via e-cheque and the seller only dispatches upon clearence of the e-cheque ?