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eBay Accused of Price Gouging Scheme
Symbiot writes "eBay is being sued in a Calilfornia court for a practice that the plaintiff, Glenn Block of Pennsylvania, claims artificially raises the amount of a bid. The practice combines the warning emails that eBay sends out when you are the highest bidder and your bid is at your maximum, with the bid increment mechanism. It seems that if your original maximum bid settnig prevents your current bid from falling on an increment then your current bid will be raised to the next increment as soon as you raise your maximum. If the plaintiff wins this class action suit could cost eBay tens or hundreds of millions of dollars."
...with a little more substance than the Reuters.com blurb can be found here.
"Give me taste, give me funk, give me fury, gimme some more."
"I see that they have homed in and I raise my cap to 125.00, suddenly my high bid is 102.50 rather than 100.01."
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I've noticed this as well.. but . .
"when I reloaded the page later it would revert back to my prior high bid, which can be handy for disguising what your actual new cap is. I'm sure they know all about it and had fiddled with the way it works."
This is probably your browser caching the old page, which I've also had happen. It's not their fault you need to reload the page.
I had a max of say 100.01 and another bidder had bid 100.00 while the current high was substantially lower, so it showed 'You have been outbid the current high bid is 100.01' Now, they could bid at least 102.51 and take the lead or had figured that was just too much, either way, I see that they have homed in and I raise my cap to 125.00, suddenly my high bid is 102.50 rather than 100.01
But for the minor fact that eBay tells you this is how the bidding system works. If you wanted to avoid this then you just should have bid $125.00 to begin with. On eBay if somebody else bids the same amount (within the increment) as you did then you are still the high bidder because you placed that bid earlier. When you decided to up that to $125.00 that bid took over -- hence the later bid was the winning bid and it needed to be higher then not equal to the previous bid. This is all documented on eBay's site.
I think that's a gross exaggeration of the problem, however it could cost eBay a lot in man-hours auditting the results of every auction since the beginning to determine who is entitled to a refund.
I doubt they'd bother with the audit. They'd just put X amount of dollars into a fund and tell everybody who might be eligible that they could collect from it. Better then half won't bother -- is my time to fill out and read that document worth a few bucks?
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
In the bad form of replying to my own post I found the help section on eBay that explains this policy. To quote:
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Maybe I'm missing something here, but ... ... How can there be more buyers than sellers?
There's more potential buyers then actual sellers. Not every bid for an item wins after all....
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Nobody seems to understand the problem here. It isn't about winning auctions. It's about eBay automatically increasing your bid for no real reason.
Here's the scenario:
You bid on an item for, say, $80.
Somebody comes along, bids $75.
Your bid is auto-incremented to $76 to beat out this other bidder.
You, getting nervous that somebody might usurp your spot with a max bid of $80, increase your maximum.
When you increase your maximum bid, eBay automatically increments the CURRENT bid value by the increment amount, EVEN THOUGH YOU WERE THE CURRENT HIGH BIDDER TO BEGIN WITH.
This is where the price gouging comes in. You are already the high bidder, you're just increasing your maximum bid. It shouldn't increase the current bid when the current high bidder increases his maximum, though. That is totally nonintuitive. The system interprets your maximum bid increase as a "competing bid" however and checks its max value against the current max bid value, and if greater, it "bids" on the item with the new max value, increasing the cost by the minimum increment, just as if ANOTHER bidder had come along and bid on the item at a higher value.
It's like you're bidding against yourself whenever you increase your maximum bid, and THIS is the price gouge that is to be disliked.
Reinvent the wheel only at either a lower cost, greater effectiveness, or your own personal enrichment and satisfaction.
But ebay is not the beneficiary, the seller is, so...
Ebay is a beneficiary.
Ebay takes a percentage of the earnings. If the final bid is inflated, then Ebay makes more money.
94% of Repubs and 21% of Dems voted to renew the Patriot Act
I've scored some really nice items on ebay, antiques and such.
The problem for me is two fold.
1) I can't see the items to get an appreciation of the quality, age, wear, and authenticity. I take the sellers word for it, which is generally very verbose and well described. I bid near top dollar and hope the seller is honestly describing the item. I'm a collector, not a bargain hunter.
2) A lot of people are on ebay, so if the verbose description of an item has the right words, all the collectors find the item. Raising the price for the seller.
The best deals have been from sellers who didn't know what they had, and listed it with some other unrelated item I was persuing as a package deal.
It's very hard to find a bargain price for a well listed well described item that it in any sort of demand.
The best purchases have been at top dollar for good merchandise I would not be able to find locally.
I think it's a win for everyone but the bargain hunting buyers.
One thing I can say is good, though, is that eBay doesn't nail bidders for a fee as well. I've had to shell some $$ in the past on other auctions and thought that was pretty scurvy, but it actually is practice at many large auction houses. Sothebys and the like didn't become famous for their charity to buyers and sellers.
Yeah, but acccording to themselves (IIRC) EBay are not auctioneers:-
From Ebay.com and also at Ebay.co.uk, they say that:-
3. eBay is Only a Venue.
3.1 eBay is not an auctioneer. Although we are commonly referred to as an online auction web site it is important to realise that we are not a traditional auctioneer. Instead, the Site acts as a venue which allows registered users to offer, sell, and buy just about anything which is legal, at any time, from anywhere, in a variety of price formats. We do not review listings provided by users, we never possess the items offered through the Site and we are not involved in transactions between buyers and sellers.
In short, they do a lot less than Sothebys and friends, so I don't consider this largesse in any way.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
I've been with Paypal since near its beginning and I've always been surprised that its made it since its margins are actually very low. So yeah, Paypal isn't doing that much gouging, at least on this issue... (it has other problems...)
The seller places the item for auction, waits a fixed amount of time, then gets money. At no time does he face any risk.
The buyer, on the other hand, has to sift through the items (and sellers DO spam keywords), place a bid, then wait around for days. He may likely be outbid, in which case the whole process starts over. If the buyer "wins", he then sends off his money in *hopes* that the seller will deliver. When/if the item arrives, it's often not in the condition described, or very often violates normal assumptions about what is salabled. ("Well gee, I didn't say it came with a power cord!!").
That's not to say this is all ebay's fault, the point is that ebay is great for selling, not great for buying.
I believe you can change your maximum bid at any time, although it requires setting it to zero first (withdrawing from the auction).
Of course you lose your place in the line, but that's not unreasonable.
I've had several bidders who did that - entered mistaken bids, withdrew them, sent me apologetic email, and re-bid. I had no trouble with it.
When EBay says "someone has outbid you with a bid of $100, do I hear $105?", your automatic bidder won't bid $101; so your analogy is flawed.
If I read the article correctly, your statement is exactly what the lawsuit is about. The guy was expecting to win with a bid of $101.50 (or somesuch) and ended up paying 102.50 because the system increnments in $2.50 amounts in this dollar range. So, eBay is in effect saying "do I hear $102.50?" It looks at the proxy bid and sees that someone is willing to bid that much, and places the bid on behalf of the bidder, who now complains because he could have won for $101.50, even though eBay (using its well-documented rules) "said", "Do I hear $102.50?"
There's a big difference between saying eBay is an auctioneer (which I did not do) and likening (which means 'comparing' in my dictionary) them to an auctioneer.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
4.125 cents.
http://pages.ebay.com/help/sell/fees.html
Remember the days when Republicans were the party of fiscal responsibility?
Some states have this system, sort of, where the plaintiff gets a portion of the punitive award and the state gets the rest -- laws implementing this are called "split award" statutes.
There has been some interesting work done on whether this system is, overall, welfare-improving. It may be intuitive that such a system cuts down on frivolous lawsuits, but it wouldn't be good if it cut down on justifiable lawsuits, too. Not only would potential plaintiffs not be compensated for wrongs, it could lessen the incentive of a defendant to avoid doing the wrongs. (Avoiding these problems -- in addition to possible constitutional problems -- is probably why no state has a 100% "split" award statute.)
And it's not clear that lawyers might be less likely to push the more questionable cases -- in fact, they might be more likely to push them, because under such a system all plaintiffs have an increased incentive to settle cases, which costs plaintiffs' attorneys (working on a contingency fee basis) less money and time (so in aggregate they can bring more).
What right do they have to that?
Because those are the terms of putting an item up for sale on their website.
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
I completely disagree, if you're careful, then you can often get things on eBay for much less than a retail store, the only downfall is the possibility of being outbid, thus the automatic bid system. I bought some RAM on eBay and it cost about half what it would have from anywhere else, and besides the seller taking a while to ship the RIMMs I was very pleased. I then sold a mohterboard and just kept the money in my PayPal account and don't get hit with any extra fees, I assume that when I try to transfer to my bank account these fees will come into effect but if I buy something else, then I can use the money in PayPal to pay for it.
Sexual intercourse is kicking death in the ass while singing. ~Charles Bukowski
The reason that ebay doesn't allow you to lower your maximum bid after placing a bid, is it can allow you to see your opponent's maximum. Otherwise the closest you could have gotten is by bidding in something like $2 incriments. This is tiresome on larger priced auctions. Bidding just up to the maximum can give you a strategic advantage in auctions.
It is considered ruthless bidding, since it can give the specific bidder performing this practice an unfair advantage over other bidders. It is frowned upon and just plain tiresome to do. If you were able to lower your maximum after setting the bid at your oppnent's maximum, you could bypas all the trouble. Though the strategic advantages of this can be questioned, it is still a potential advantage for savy bidders.
A person CAN win an auction if their high bid is not a full official increment above the lower bidder. This happens in the following situation:
I bid $5.02 on an auction first. Then you bid $5 in the final seconds, in an attempt to snipe my bid which is showing as the starting price of $0.99. I win the auction with a winning bid of $5.02, even though the next increment should be $5.25.
What eBay says is basically that you are invalidating your original proxy bid if you place a new maximum bid, so it (the proxy system) increases your previous maximum of $5.02 up to the minimum increment above the opposing bidder's $5.00 bid. With your initial proxy bid you had the advantage of placing the bid first, so even if the opposing maximum bid was exactly equal to yours, you would still win. By placing a new maximum bid you invalidated that time advantage and reset the proxy system. Your previous maximum of $5.02 is no longer high enough above the opposing bid to be a valid bid, so your bid is increased to the next increment to make it valid under their system.
It all has to do with time, and whether the proxy system should be reset by a new maximum bid or continue to consider the old maximum as a valid bid and leave it alone, even if it wouldn't have qualified if it hadn't been your previous maximum. It's described fairly clearly when you read the help files on proxy bidding, so I doubt this will hold up in court. I'm looking at it from all sides and can't really find fault with eBay. You agreed to use their system, they described how the proxy bidding works (including what happens if you place a new maximum bid), so I can't see that there is really anything heinous going on. There is no manipulation, it's all above board for once.
If you want to save a dollar here and there, stick with your original maximum bid and quit futzing with the proxy system, or snipe it with a precise amount. Either way, don't complain when you lose the auction.