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April 20, 2007

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.


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.


Customer Support (Trust and Safety Department)


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