A New Tool for eBay Problems: Online Dispute Resolution

Kegler Brown Litigation Newsletter

It's happened to the best of us. A few minutes of idle browsing on eBay become an obsession with finding a gravy boat in the exact pattern that matches the rest of your fine china. Or a mint-condition Chatty Cathy doll just like the one you had when you were a kid. Or a piece of autographed memorabilia that will prove for all time that you are the most fervent fan on the block. Whatever "it" is, we buy it sight unseen on eBay, trusting that the item will arrive on our doorstep exactly as it was described on the website.

But what happens if that gravy boat turns out to be robin's egg blue instead of the cornflower blue of the rest your dishes? Worse yet, what if the gravy boat arrives in pieces, and you opted to forgo the shipping insurance? A new form of conflict resolution has entered the online marketplace scene to help settle situations just like these. Instead of wrangling through the issue by messaging the seller's eBay account, you can turn to online dispute resolution (ODR).

ODR offers a web-based forum where the buyer and seller work together to reach a mutually satisfactory resolution. SquareTrade is an independent website that offers ODR services specifically tailored for eBay members. You begin the process by filling out a form describing your complaint. SquareTrade then contacts the seller and encourages him or her to use the ODR forum to respond to your complaint. There is no charge to file a complaint or use the forum to settle a dispute. If the parties cannot reach agreement by themselves, SquareTrade can provide an unbiased mediator who will work to understand both parties' perspectives and help develop a fair settlement. Hiring a professional mediator through SquareTrade costs a flat fee of $15.

The benefits of ODR are obvious: the process is cost-effective, and most claims are settled within 10 days. ODR also has its drawbacks, however. In an anonymous setting like eBay, the only way to bring parties to the negotiating table is by threatening to post negative feedback because ODR cannot penalize parties who refuse to participate in the process. However, legitimate sellers are almost always willing to work with their customers to avoid customer dissatisfaction and negative feedback. ODR also lacks some of the human touches that make negotiation and settlement work. For example, if you're frustrated because the gift you ordered online didn't arrive in time for your kid's birthday, an emailed apology may not feel as heartfelt as a live apology. In addition, ODR cannot protect against outright scams; the scammer will be long gone by the time you realize there is a problem. In spite of these drawbacks, ODR still offers the opportunity to have a productive discussion with the other party without the cost or hassle of employing a more formal legal process.

ODR is gaining ground in areas outside of eBay as well. ODR is particularly well-suited to help connect parties who are in far-flung jurisdictions when the dollar amount at stake does not justify high travel expenses. Beyond the cost-cutting aspect, though, lawyers and clients agree that ODR helps speed up the negotiation process in conflict resolution as well as in transactional areas of law. Using resources like discussion forums and websites, a document can be drafted, amended, and critiqued in a far shorter time period than traditional methods would require. If the parties need to talk in real-time, they can teleconference or log on to an instant messaging service. Better yet, if no real-time interaction is necessary, then there is no need to schedule a time when everyone is available.

Even as ODR becomes more prevalent to deal with conflicts arising from internet transactions, you should still use caution when purchasing items online. Always use your credit card, not your debit card, to pay for items that you purchase online. That way, if a conflict cannot be resolved with the seller, you can contact the credit card company to receive reimbursement while the credit card company handles the seller. Also, don't post feedback for a seller until you receive the item and verify that (1) it is what you ordered, and (2) it works the way it's supposed to. Posting positive feedback for the transaction before you receive the item eliminates the seller's primary incentive to address your concerns. On the other hand, never post negative feedback until you've given the seller a chance to respond to the problem; it's poor eBay etiquette, and, more importantly, it's unlikely to resolve the situation.

Of course, we all hope that our gravy boats and other dubious treasures arrive on our doorsteps as promised and intact. But it's nice to know that there are tools like ODR to help resolve any problems that may appear along the way.