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ebaY Pays For Deadbeats? |
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Is ebaY Paying for Shill Bidders, Deadbeats, Site Hits and Inflated User ID Numbers?
editorial 13 Mar 2002
Thanks to a link provided by an alert TAGnotes subscriber on 11 Mar 02, it has come to TAG's attention that ebaY is participating in several programs where they fund "points" for registrations and bids on ebaY auctions. Though no start date was available, it appears from the posts on the points industry chat boards, that this program has been in place for a few months. The earliest post we found about it so far, was dated 25 Jan 2002.
There is a whole online world, where point collectors participate in a variety of promotion programs funded by advertisers and sellers of products, whereby the point collector garners points for various activities on the net. The point collector can then redeem the points for web certificates with which they can 'purchase' merchandise.
Some of these sites are -
http://www.blink.com
http://www.clicktothemagic.com
http://www.creationsrewards.net
http://www.dealofday.com/
http://www.primarewards.com
http://prizebuddies.org/rewards/
What ebaY does, is pay these point sites so the point site will reward points to their users, in exchange for the point sites users going to ebaY to register and place bids. These bidders do not need to buy anything or follow through on their bid if they have the high bid on an item, to garner the points, just register and bid. Wonder why your deadbeat bidders have increased? Here is one answer!
In addition, chat on the point site boards seems to indicate that many users register multiple times and post hundreds of bids for the sole purpose of getting points. There are even strategies discussed on how to bid without having to buy. These point gatherers are very involved in their pursuit of points, and on one site we found a chart comparing the points available for ebaY bids from point site to point site.
Posted on 10 Mar by metaz on bigbigsavings.com
"eBay points to Webcerts - a comparison
I made this for my own use, but thought others might be interested. It's a comparison of how many eBay bids it would take to get Webcertificates at various programs.
$10 Webcertificates
Program (points for WC) / Points per bid = # Bids for WC
PrizeBuddies (11150) / 26 = 429
CreationRewards (2300) / 5 = 460
ClicktotheMagic (2150) / 5 = 430
PrimaRewards n/a
Blink (96000) / 75 = 1280
$20 Webcertificates
Program (points for WC) / Points per bid = # Bids for WC
PrizeBuddies (22250) / 26 = 856
CreationRewards (4300) / 5 = 860
ClicktotheMagic (4300) / 5 = 860
PrimaRewards (23400) / 25 = 936
Blink (182000) / 75 = 2427
$50 Webcertificates
Program (points for WC) / Points per bid = # Bids for WC
PrizeBuddies (53450) / 26 = 2056
CreationRewards (10300) / 5 = 2060
ClicktotheMagic (10750) / 5 = 2150
PrimaRewards (54400) / 25 = 2176
Blink (440000) / 75 = 5867
$100 Webcertificates
Program (points for WC) / Points per bid = # Bids for WC
PrizeBuddies (105450) / 26 = 4056
CreationRewards n/a
ClicktotheMagic (21500) / 5 = 4300
PrimaRewards (105400) / 25 = 4216
Blink (750000) / 75 = 10000 "
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At first glance this points for bids (PFB) program seems to be a good thing. What seller would object to more bids on their items? We all know that items with bids bring even more bids. And if a buyer comes to ebaY, aren't they likely to stay and become a regular buyer at ebaY? Unfortunately, this program will very likely not result in these desirable ends.
The folks who are involved in point collection, couponing and refunding (PCCR) are a breed unto themselves - much like the online auction community. This PCCR industry was well developed prior to the popular advent of the internet, and the internet just provided a new niche for them. They are disinterested bidders, going to ebaY seeking points for redemption, not for finding and buying items. The way the program is set up, it encourages this bid for points desire, not a bid for and buy items one.
ebaY has this set up to profit ebaY almost exclusively, with a seller receiving a benefit almost by accident or as an afterthought, if at all.
The first problem is the most obvious one, that of deadbeat bidders (known on ebaY as NPBs - non paying bidders). With a deadbeat buyer, ebaY can probably recoup their entire cost of the PFB program, as only a percentage of sellers bother to go through the complex deadbeat bidder program to get their final value fee back. In addition, ebaY gets another listing fee from the seller, as deadbeat items are not eligible for a free relist if sold the second time around. It is unfortunate that ebaY makes gains from deadbeat bidders, and sellers lose profits from deadbeats. ebaY could have made this program reward points for buying an item on ebaY, rather than points for just bidding. That would directly benefit the seller, and bring a different kind of PCCR person to ebaY, one who might be involved in the PFB programs, but is also looking to purchase items on ebaY.
ebaY also gains advantages by inflated registration numbers. PCCR participants register on ebaY to get the points. They can register again and again and get points each time. These accounts are very likely to become inactive and ebaY never removes an inactive account. ebaY also gets more hits on the site from the PCCR folks, though hits from disinterested bidders benefits only ebaY, as it makes their statistics look better. ebaY can report deadbeat sales every time the item sells, as there appears to be no deduction of deadbeat sales from ebaY's gross sales figures in their SEC filings. ebaY has designed a program that appears to be paid for by sellers, but only benefits ebaY's ability to sell advertising and inflate their numbers in order to keep their inflated stock price up. The very fact that this program has been kept a secret from ebaY's users is sufficient reason for all sellers on the site to question ebaY's motivation.
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Some Program Details
From Blink http://www.blink.com
eBay.com
Earn 5 points + 7,500 when you register and place a bid for a product today. New eBay members only. If you already signed up... use the link below to place your bids and earn even more points!
eBay.com bids
Earn 75 points for each bid placed on eBay products. Registered eBay members only - if you haven't signed up yet, use the link above. Each bid MUST be placed AFTER clicking on this link to get your points.
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CreationsRewards.net
5 points per bid no daily limit
500 points for registering
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PointPool.com
5 points per bid
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PrimaRewards.com
25 points per bid no limit to bids per day
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Some board comments about bidding names removed for anonymity -
"if you do it right, there is never a chance of winning a bid on ebay. Find something like digital cameras or computer gear - the idea is to find something very popular. Look at newest listings or if you do a search for a specific item, you can select "lowest price" at the top of the listings. Find something for $1 or .01 etc and place a single very low bid. No chance to win a $600 computer for $1. "
"I will bid on item I would buy if the price was right. I like coins and rookie baseball cards.
Many start out a 1.00 and are worth hundreds.
I stick with them until they get too expensive."
"that's an interesting point about abuse; I haven't placed any bids yet at eBay but I was thinking that with all this extra bidding the bids themselves get grossly inflated--still, as long as the seller is getting paid..."
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For Basic Information on how this all works and comparisons of sites -
http://www.comparerewards.com/
