BuySafe.com has launched a radically new service for high-volume eBay sellers to guarantee their transactions. Sellers purchase surety bonds from BuySafe and include the BuySafe seal in their eBay listings. The program is designed to assure buyers that it is safe to buy from participating sellers.
Sellers pay 1% of the selling price to BuySafe. The company said sellers expect higher selling prices when they can assure potential buyers they are safe to trade with. Bonds are issued by The Hartford Financial Services Group and expire 30 days after the auction closes.
The program is limited to sellers who do a minimum of $1,000/month in eBay sales; have at least 100 feedback points with a 98% feedback rating; and are based in the U.S., with the exception of Hawaii.
BuySafe verifies sellers' identities and analyzes their financial stability. As part of the application process, sellers sign an indemnity agreement in which they promise that if they don't fulfill the Terms of Sale, they will refund money to the buyer or send replacement merchandise. An overview of surety bonds is presented on the BuySafe site at http://www.buysafe.com/innerpage.asp?section=38&page=486.
Participating sellers can choose which transactions they wish to bond. BuySafe charges 1% of the selling price for each bonded transaction, and there is a $5 minimum charge per month.
If a seller fails to make a buyer happy, the buyer has 30 days from the auction close to file a complaint with BuySafe. (Buyers have to register with BuySafe in order to report a problem.) BuySafe said they send emails to buyers 2 weeks after the auction ends and 3 business days before the 30-day bond expiration date to remind them of the bond expiration date.
The form that buyers fill out to report a problem is a legal agreement and states buyers are under penalties of perjury if they lie on the report.
The seller has 3 business days to respond to a buyer complaint. All correspondence between the buyer and seller is documented online, and BuySafe said they encourage buyers and sellers to work out the problems. If necessary, a BuySafe Problem Resolution Specialist can help facilitate a solution. If the two parties are unable to solve the problem with BuySafe's assistance, the reported problem will be referred to The Hartford and become a claim.
So who wins if there is a claim? The site says, "Winning buyers must provide proof of seller default, while Bonded Sellers need to show proof of compliance with their Terms of Sale." It is up to both buyers and sellers to make sure they document the transaction.
BuySafe said it has gotten lots of positive feedback from eBay sellers as they developed the service. eBay seller BiggBill has gone through the application process and believes the program will be good for his business. He doesn't necessarily expect to attract more bidders or attain higher selling prices. He wants to ease customers' comfort level from the time they press their PayPal button to pay him, until the time the UPS truck drops off their package. "It's about taking care of the customer after the sale," said BiggBill.
There are other services that offer seals showing sellers are safe to deal with, although BuySafe is the only one that uses surety bonds. Sellers can use eBay's ID Verify service, participate in the SquareTrade Seal program, or sign up for Reliable Merchants.
eBay ID Verify
http://pages.ebay.com/services/buyandsell/idverify-login.html
eBay ID Verify allows eBay users to go through an identity verification process and then display an icon in their feedback profile. The service costs $5 and is valid until a user's name, address or phone number change. Verisign provides the service for individuals, GeoTrust provides the service for certain businesses, and Deutsche Post provides the service for German members on eBay.de. ID Verify is not a credit check, it simply establishes proof of identify.
Reliable Merchants
http://www.reliablemerchants.com
For $14 every 3 months, eBay sellers can display a reliability seal in their auctions; when potential bidders click on the seal, they are taken to the Reliable Merchants site, where they can view statistics about the seller's feedback.
SquareTrade
http://www.squaretrade.com
SquareTrade's Seal Program verifies a member's identity and/or address. All Seal Members have committed to participating in good faith in dispute resolution using the SquareTrade Dispute Resolution service should any issue arise in a transaction. The service costs the seller $7.50 per month.
None of these three services guarantees buyer protection, they simply give more information to potential bidders about their identity and/or eBay transaction history.
With BuySafe, however, if a buyer can provide proof of seller default, they are guaranteed protection. The guarantee as described on the BuySafe Web site at http://www.buysafe.com/buyers.asp
"The bond provides that The Hartford will refund the item sale price or replace the item in the event the seller does not fulfill the terms of the contract in the item listing. The bond does not provide coverage for certain types of losses, such as losses arising out of product warranties or guarantees of any kind, or for special, incidental or consequential damages of any type. Other terms, conditions and exclusions apply. "
A claim professional from The Hartford reviews claims and makes final decisions, the first time in online-auction history that a professional third-party has the right to make a decision about a claim. (With SquareTrade disputes, both parties must come to an agreement through the dispute resolution service.)
It's yet to be seen how the BuySafe service will pan out for sellers and their customers. Sellers should keep in mind the legal and financial implications of using bonds to guarantee their performance.
BuySafe recognizes the service is not for everyone, as demonstrated by their minimum requirements. They are banking that high-volume merchants will find the service gives them an edge in eBay's competitive marketplace.
http://www.buysafe.com
