ChannelAdvisor Corporation said it has developed a solution to help tackle the problem of deadbeat bidder fraud. The new program, called BidAssure, will reduce online auction fraud for sellers using its auction management software on eBay, Amazon and Yahoo.

Non-paying bidders, also known as "deadbeat bidders," are online marketplace bidders who win an item but do not complete the transaction, thus defrauding the seller. ChannelAdvisor conducted an independent study that showed the problem is increasing at an alarming rate and impacts between 7-25% of all auction transactions. Three to five percent of deadbeats are "repeat deadbeats," meaning they consistently buy items from the same seller and fail to pay. In addition, 5-10% of deadbeats are "multi-seller deadbeats," meaning they defraud multiple sellers over a short amount of time.

BidAssure attacks the problem of deadbeat bidders in three ways: through features in an enhanced checkout system, a bid-blocking feature, and a multi-seller bid-blocking network. The bid-blocking features will only be available to ChannelAdvisor's enterprise clients.

BidAssure CheckOut, available now, is a checkout system with enhanced features including aggressive end-of-auction notices, increased checkout usability and a prominent "checkout here" widget in the auction ad template. Once BidAssure CheckOut detects a deadbeat, it automatically replenishes inventory for resale and files the appropriate fee recoveries with the marketplace.

BidAssure Block, available in October, will give ChannelAdvisor Enterprise clients the ability to automatically protect themselves from repeat deadbeats through a bid-blocking feature.

BidAssure Network, available in early 2003, will give ChannelAdvisor Enterprise clients the ability to "opt-in" to a bid-blocking network. The BidAssure Network will allow participants to detect and block deadbeats identified by other participants in the network, thus protecting against "multi-seller deadbeats" as well as "repeat deadbeats."

Deadbeat bidders increase the seller's time to sell product and cost them auction placement fees. While these fees can be recovered, it is time-consuming and tedious. ChannelAdvisor's studies have indicated that only a small portion of sellers actually file for the fee recovery, thus increasing the problem since marketplaces can not detect and block unreported deadbeats.

http://channeladvisor.com