eBay Top-sellers Getting TKO'd by TKOs

The battle against online fraud can be a complex and ever changing fight.  The good guys come up with counter measures to the bad guys. The bad guys react by changing their tactics, the good guys react, and so the wheel turns.

Thus, as eBay fights fraudsters, sellers are exposed to new behaviors.  One problem that we've seen substantially escalate in the last several weeks is TKOs.  It took me a while to get to the bottom of that name (most sellers assume it has to do with Technical Knock Out - the common usage of the TKO acronym , but we have a couple of ex-eBay folks in our UK office and they were able to enlighten me after some digging).

TKO stands for - TaKe Over (the T and K are from Take the O is from Over). I realize it's not a true acronym, but that's what I'm told internally eBay uses as an explanation.

This is a long post, but it's an important issue to understand.  In this post we'll give a detailed overview of what a TKO is, the impact on top sellers, a case study and finally our suggestions to eBay for fixing the TKO problem.  Finally, as reference we were able to obtain the emails that go to both buyers and sellers so you can see the wording for yourself.

What is a TKO?

Here's how the TKO scenario plays out:

1. Non-fraudulent large seller lists items for sale all the time in auction format (larger sellers list more remember)
2. A bad-guy uses phishing or password guessing, Trojan horses to take control of a buyer's account.
3. Bad-guy now uses this hijacked account to bid on hundreds, or thousands of items - they go on a frenzied bidding spree.
4. Good-guy seller's listings end with winning bidders.  Bad-guy could have won some, most likely he is just one of many bidders.
5. Good-guy buyer who is the victim of account hijack reports to eBay
6. eBay blocks the hijacked account and through a series of steps returns control of the account to the good-guy buyer
7. As part of this process, eBay looks at the bid activity for the hijacked timeframe and deletes (yes totally removes) those listings from eBay
8. eBay emails seller to tell them that due to the fraudulent bidding activity, the auction is totally invalidated and has been removed from the system
9. eBay ALSO emails EVERY bidder of the impacted listings to let them know that the item has been nuked and the transaction is null and void

For under-bidders that receive the email, it's not a big deal.  For winning-bidders it means they no longer will receive the item they won so they now have to go and find another item or explore if the seller has it.

The real victim in this fraud scenario is the seller and increasingly top-sellers.

Top-seller impact

The TKO actions taken by eBay Seem logical enough, but this is causing serious economic damage to sellers as it ramps up:

1. Top-sellers by the nature of listing more, have a higher probability of being hit by the problem and as they grow, the number grows at a faster rate.
2. In steps 8+9 of the TKO scenario above, the email to the seller (included below due to length) is very clear that a fraudulent bidder/taken over account was involved. HOWEVER, the email to the bidder (included below due to length) is very unclear and in fact doesn't even clearly state that it was not the seller that caused the listing to be TKO'd.
   • 2A. The email to ALL bidders hurts the seller's image/brand on eBay by not making it clear they are not fraudulent
   • 2B. The email frequently causes a raft of emails to the seller and increases customer service
   • 2C. The email does not point the buyer back to the seller to try and bid on a similar item or once the seller relists, let them know about it (more on relists - see number 5).
3. Since the item is deleted from the eBay system, the seller can not recover the listing fee
4. Also, if the TKO happens after the item has been won, the seller also loses FVFs
5. If your read the seller notice, you will notice that since the item is totally deleted from eBay's system, there is no automated way to relist.  If you use the eBay seller tools, the information is completely gone.  If you use a third party system to list, you can at least post the SKU again, but you will not get a relist credit as you normally would if an auction was ended (versus TKO'd)
6. Sometimes this happens so far after an auction has ended that the winning bidder has already paid.  Now the seller has a refund problem, but this is hard because the item is deleted and the seller can't even look up what the item that was TKOd 'was' to be able to re-offer it to the buyer, refund, etc.  When this happens you are in a really sticky situation.

To be fair, I've heard that if sellers document the TKOs, call their TSAM and complain a little they will get the FVFs credited and if you complain a LOT you get the listing fees too.

In any case, these six economic impacts really add up and TKOs appear to be occurring at a near epidemic pace over the last 60 days.  Let's look at a recent, real-world example.

Case study: TKO'd vintage poster seller - emovieposter.com

eBay's largest vintage movie poster seller, emovieposter.com, runs weekly auctions that customers know end on Tuesday nights.  emovieposter is a multi-million dollar GMV seller and amazingly (given the volume and product sold) maintains a 99.9% feedback rating. I haven't seen a negative in 2yrs.  Everything emovieposter sells starts at $.99 no reserve so this is exactly the seller eBay wants to keep and grow so they can bring the fun back to core.

Unfortunately, it's exactly these elements that make emovieposter a target of fraud in general and recently a relentless barrage of TKOs: lots of listings, lots of bidding, .99 start price, high ASP put them in the fraud bullseye.

Last week after their weekly Tuesday night auctions closed, emovieposter received noticed that 97 of their listings had been TKO'd.  While only 97 listings were TKO'd, eBay emailed EVERY bidder the bidder TKO email (emovieposter averages about 7 bids per item so that's about 700 this week.  As mentioned the bulk of emovieposter's bidders are previous buyers so their first inclination is to email emovieposter and ask what the heck is going on.

The impact to emovieposter for ONE weekly auction:

• 97 listing fees and FVF's not refunded
• 700 bidders that have received an unclear email about emovieposter
• hundreds of calls and emails from anxious bidders+buyers wanting to know what's going on
• 97 buyers that need dealing with
• 97 posters that didn't sell and now sit for another week costing time and money to warehouse/move/etc.

Suggested solutions for the problem

Here are several ways for eBay to address/fix this situation:

• Get even more aggressive on protecting the site from phishers.  Key fobs for accounts, require buyers to register with payment/addr info, stop sending out emails that have clickable links (yellow button), etc.  We've been covering this topic for a while.  Oh yeah - require passwords to be a mix of chars/other, longer and get a seller to change them frequently
• If hijacks do occur, don't nuke the listing, simply put it into a closed state so it can be relisted.   When relisted email all the bidders that it's back.
• Rework the email that goes to bidders making it 100% clear the seller was not involved in any fraudulent activity
• Give sellers the ability to reduce the number of bids a single bidder can make in a short window of time.  e.g. Limit bidders to 5/10/20 bids per 24hrs
• Of course 100% fees should be credited - it's eBay's job to police the site and stop account take overs.  With the seller paying they have no incentive to start to get more aggressive on this.  They need to feel the pain.

Are other sellers out there hitting this issue? Feel free to post your comments/suggestions/experiences as well.

And now for those that are interested here are the emails sent to the seller and buyer respectively:

Note: To protect the personally identifying information of the buyer+seller, I have replaced anything personally identifying with a description in brackets.

Seller TKO Notice:

Subject: TKO NOTICE: eBay Listing(s) Removed
-----------------------------------------------------------------
Dear [seller], [seller email],

The results of the following listing(s) have been cancelled due to bidding activity that took place without the account owner's authorization:

[list of titles ]

We have cancelled the listing(s) to maintain the integrity of the eBay site, your account, and the bidder?s account that was accessed. We are working to restore the bidding account to its rightful owner, and we are working with the account owner to prevent any additional unauthorized activity. Since the account owner did not initiate these bids, fees resulting from the listings in question will be credited to your account.

Unfortunately, it is not possible for us to automatically relist these items for you. Instead, to relist these items you will need to start from the beginning of the listing process, either through the "Sell Your Item" process or through your third party listing service. We know that this is an inconvenience and we apologize for the negative impact it may cause you. We are working on tools to allow you to relist your items without starting from the beginning, but they are not available at this time.

Do not respond to this email, as your reply will not be received. If there are issues that have not been addressed by this message, you can contact us by clicking the "Help" link located at the top of most eBay pages and selecting "Contact Us" from the menu on the left hand side of the page.

We apologize for any inconvenience this may have caused.

Regards,

eBay Trust & Safety

Bidder TKO Notice:

Dear [bidder user ID],

The listing in which you were a bidding participant:

[item number and title ]

has been ended by eBay. Since the listing was ended by eBay, the transaction itself is null and void.

Due to privacy concerns, we cannot disclose the exact reason the listing itself was ended.

We apologize for any inconvenience this may have caused you, and we thank you for being a part of the eBay trading community.

Regards,

Customer Support (Trust and Safety Department)

Comments

[Jeff]

I have tried to sell the same laptop and been hit by TKO four times in a row.

[0ctavia]

I've known for some time that the situation was bad but it sounds as if it's even worse than than I thought.

How does eBay explain this excess money ... listing fees and FVFs that aren't refunded ... how is it noted in eBay's yearly accounts? The cash can't be attributable to sales because there are no item numbers etc to go with it, so where do they put it in the accounts.

I really want to know the answer to that because, if you think about it, over a year it has to add up to quite a tidy sum.

[Shawn Jones]

First of all, Bruce I hate to hear that has occurred to you, as it is one of the most frustrating things that can happen. I know from experience, except it has put me into a horrible situation. I have sold on Ebay since 1995 (I believe may have been 94 or 96), and was one of the top sellers back then. However, we have ran into similar issues with BOTH Ebay and Paypal that on occassions has caused our account(s) to get suspended at times and some even were permanently suspended. Not to mention that Paypal then has "limited access" to our account(s) on several occassions as well, which most originated directly from something Ebay did. This occurred prior to Ebay purchasing Paypal & even more so after. My first encounter was when I was selling Nascar & die-cast items mainly, and running about 200+ auctions a week with several being dutch auctions so I was selling 500+ lots easily weekly, and it was not uncommon to sell 1000-1500 lots. However, I had one buyer buy approx $1200+ worth of lots and he/she paid via paypal and I shipped out within a day or two. A month passed by then 2 and nothing, but then after probably 4 months I heard from the buyer and he stated that he wanted his money back. Now remember this is atleast over 3 months after he rec'd the items and I am almost positive it was over 4 months. He had purchased mainly nascar items and with the market being so volatile on what he had bought I would have lost a lot by refunding his money b/c some of the larger items had dropped drastically in price, which is why he really wanted his money back. However, he stated that they were damaged due to the packaging.. Yeah right... 4 months later.. Anyways, Like Benelli stated above, I too try to keep everyone happy and coming back, but this was too extreme for me. But I did tell him that we could work something else out, but I could not refund his money due to the time & my policy was plainly written in the auction that there was a 30 day return period and i'm not a stickler or anything but this was too excessive.. I offered many different solutions, which were way more than acceptable, and I feel as if I shouldn't of even done that! Anyways he harrassed me for a couple weeks and I had noticed that I was having a lot of unpaid items and complaints then negative FB started hitting. You guessed, either some friends of his or he, with diff. accts., were bidding up my items and then complaining etc... Then he called my house & spoke to my wife and threatened me to her and yelled and cursed etc.. I called him back from work and told him what I thought, but then after going home & talking 2 my wife we filed a police report. Not that it did any good really b/c he was in another state. Then just as I thought it was over, Ebay suspends my account for I think "seller non-performance" from all the complaints/neg. FB etc.. he had posted.. Then a month later (almost 6 months since he paid) paypal called me and stated that I owed them $XXX b/c they refunded the guy's $$!!! I sent them the tracking # & everything, and this was even when they only dealt with if the item made it or not!! But it didn't matter & I was sent to collections, which I paid the amount AND the guy still kept the items... Calling/Emailing both of them did NO good whatsoever... Now to sell, I have to use a different name etc.. and everything mainly b/c of that. There has been some other things such as teh TKO happen, and that is BS too. Because I sold auto'd items for a while and when the people get that email they think that they are fake. This caused me to have to refund over $2500 in one week, not to mention the sales lost from the auctions they closed, but also b/c I lost a ton of buyers for future auctions b/c of the email!!.. Also, one more thing. Paypal is just as irritating on things such as the "limiting access".. IT is usually for "suspicious activities", which I have never had anyone define to me what suspicious activities I was involved with.. I do know that I had a chargeback against me once and got limited and you never get your money!!.. Sorry this is so long, but I could give you tons of more examples.. And what is bad is that back then I was working at a great job and made plenty of money to support my family, but now I have had surgeries on my back and am disabled, and am applying for disability but it is going to take over a year more, and already been almost 18 months since I've worked.. So, I have to do Ebay, but am working on other projects on-line so I can get away from it, such as building web-sites, etc.. I am also looking at doing more e-commerce and using google as well as some other places. I have found a classified site that works great...

If you would like to know some other places to sell and/or other things to make money just drop me a line at discounts@rock.com

AND if you have any ideas please let me know!!!

Benelli

[QueenyD]

I purchased some shipping supplies from a seller with Great customer service and items and rec'd 2 TKO notices today.. it was awful, sounded like he had done something wrong.. it made no sense. I've been dealing with him for a year. a while later I got an email saying that it was an error... even though Im a seller I was very confused...

I decided I would contact the seller and ask him to add my email to his database in case he decides to leave ebay.. I would hate to not be able to buy his products..

[Tim]

This has been happening, as you mentioned, for years. I have had a store since the beginning. Some of my store items have been listed with GTC (so it is the same item number) since I opened. When one of those items gets nuked for whatever reason - all the buyers of that item - going back months if not years - are sent that e-mail.

It makes me look like a shady seller. I get e-mail from buyer who received their item a year ago asking what is going on! I complained and complained. And got no where. eBay doesn't care. Sellers concerns are not eBay's concerns, it is that simple.

[Peter Leeflang / CEO of Leeflang Archives Corporation]

I'm not a top seller, but a gold level powerseller and also got hit the last 2 weeks alone with 2 TKOs, while I did have none in the whole last year.

Upon checking if I got credited, I noticed tha I got the listing fees back automatically, but not the final value fee. So Mr. Hergenshon's story is not entirely accurate as fas as our experience with the listing fee credit is concerned, although I will still have to claim the FVF.

From your story I must still understand that Ebay is actually in breach of contract as it does not deliver the service that our FV fee paid for (a sale) and does not refund them unless we incur extra costs ourselves (time calling them and time documenting the cases).

[John]

We are receiving about 5-7 of these notices every week! This issue is very confusing to eBay buyers and frustrating for sellers. The listings are removed from the eBay system and eBay sends a confusingly worded statement to all bidders that imply that the seller is somewhat "shady". They really need to get a handle on this issue as it is constantly increasing in frequency. Immediately eBay should come out with better wording that more accurately explains the situation to under bidders.

Thanks for reporting this issue on this board. We have been suffering in silence too long with this serious issue.

[Benelli]

I joined eBay in 1999 and started selling in 2003. I sold $1.3 million GMV from my eBay Store alone last year, no auctions, all Store's Fixed Price, all Brand New Items with warranty. My feedback is 99.9%. eBay bought the last company I worked at (where I designed and coded the 1st eBay API powered Store (eValueville)). I paid nearly $200,000 in eBay fees in 2006. The license plate on my car says 'Proud eBay PowerSeller' which I purchased at the San Jose eBay LIVE in 2005. I have always liked eBay.

My account manager stopped answering my emails... so did HIS manager. This is because I asked how to report someone that had stolen 50,000 of my images. I've asked for a new Account Manager and THAT email has gone without a reply for 3 weeks. I'm on my 3rd Account Manager and waiting for the 4th. I'm going to have to ask for a new Manager for my Account Manager! :(

I routinely find a few thousand dollars a month in Fees that eBay did not credit properly. My Account Manager keeps telling me to write reviews, use the Store Marketing tools, etc... all sorts of advise on what *I* should do. eBay is doing none of it on their own. I could go on... but any large seller already knows what I would say.

My competitors are allowed to run Multiple Stores with IDENTICAL INVENTORY (duplicate Stores with 50,000 identical items each by the same seller). When I reported this and demanded action my Account Manager sent it over to Trust & Safety and they have done nothing about it (this has gone on for over a year now). Yet eBay claims there are too many Store's items that are not selling and its dragging down core. Why not prevent sellers from having duplicate stores (at least on this huge scale)?

These competitors play games with eBay Policy (by shifting a few dollars from the Price into the Shipping, keyword spamming, etc.) and I've reported 1000's of their violations (excessive shipping, keyword spamming, image text theft, VERO, etc). Yet they persist and eBay does nothing. So I coded a program to report them for me, it reports 1000's of violations at a time (we even had eBay call and ask us to STOP reporting violations, there were too many coming in). Now, if I can write a program in a weekend to do this automatically, don't you think eBay could if they *wanted* to?

Since eBay has absolutely proven that they do not care about Store's and are not going to do anything to increase their value (on the contrary, after advertising the hell out of Store's they then complain that there are too many Store's and try to drive us away or worse, drive us to Core and poverty as well). I'll take the hint, eBay...

I realized, after all of this, that eBay has become the worst enemy of my business (they are the only ones that could shut me down now)... so... I did what everyone should have done last summer.

My Google Base Powered, Google Product Search (Froogle) enhanced, Google AdWords driven eCommerce site with FREE credit card payment processing by Google Checkout will be ready for deployment by the end of May. All of my efforts since the middle of last year have been put towards this objective. The goal was to have my OFF EBAY store done in time for eBay LIVE this year, and it will be.

I'm going to put that eBay LIVE Priority Pass to work in Boston and make these issues known to the Executive Team.

On the other hand...

AuctionBytes reported that Meg said there would be no fee increases this year... that's a start but eBay has a long way to go before they regain my trust, let alone become the center of my attention again for a while.

[Bruce Hershenson]

I AM the seller Scot cited in his story, with my permission, of course. To make things worse, this is not the first time this has happened to me! Last Halloween I had my regular auction and two hijacked accounts bid on and won 165 of my items IN EXACTLY THE SAME WAY. I bitterly complained about it to eBay, and was completely ignored, and when I asked what they were doing to prevent it from happening again, they told me "they were working on it".

I HOPED it was a one time occurance, and that it would never happen again. Now that it HAS happened a second time (and now that eBay has again not done anything about it, or contacted me in any way), I see no choice but to make plans to move my auctions entirely off of eBay.

That is a shame, both for me and for eBay. I have held 323 nearly consecutive Tuesday night auctions of 500-1000 items per week on eBay with over 13 million in sales. I start all auctions at 99 cents and all truly have no reserve (my auctions are extremely similar to those of jayandmarie, an eBay legend).

Even though I sell one of a kind 30-100 year old items (many with condition issues) I have only received 13 unique negs over the years (out of 260,000+ items sold) and have only 8 mutual withdrawals in that time, and this pretty remarkable record is because I am 100% honest with my customers and I tell them in advance that if they have any problem with their order I will do anything reasonable to resolve it, and then I do!

One might think eBay would greatly value a seller like myself, and want to keep me, but if they can't (or won't) protect me from these bidders using hijacked accounts, then it seems they don't value me enough.

If I rented a big store in a shopping mall and several mornings I came in to find that the outer walls of the store were sprayed with obscenties, and the mall owners said, "We can't do anything about it, but we are working on it" AND if they said, "You have to clean it up yourself", then I would surely move my store to a more safe mall, with better security, and where the mall owners took responsibility for their problems, and I feel eBay is leaving me no choice but to move from their "mall".

We USED to have two eBay stores where we sold lots of posters. We closed them when eBay drastically raised their fees, because we felt that move on their part was telling us they were fine with us selling our store items elsewhere (which we now do) and now we are afraid that this latest indifference on their part is telling us they can live without our weekly auctions. I can't understand their thinking.

Bruce

[Robert]

These TKOs are causing buyers to refuse to pay for other purchases that were NOT TKOed. Example, Bidder1 wins 5 auctions from same seller. Bidder1 receives TKO notice on only 1 of the items but now refuses to pay for the remaining 4 due to lack of trust.

Twice we have had bidders that received TKO notices on purchases from other sellers turn into PayPal disputes right after the package was mailed. The reason for the dispute was "eBay told us not to complete the transaction". 1 of these bidders was so upset she would not even communicate with us.

I don't have the answer however the way this is currently being addressed is adding fuel to the fire.