Effective Strategies to Reduce Your eBay Defective Transaction Rate

eBay introduces changes on a consistent basis to improve user’s experience. Though eBay terms these as steps towards continuous improvement, some users especially sellers have not always welcomed some of the changes.

In the past, we have seen spike in the eBay listing and final value fees which are naturally unwelcomed by most seller, especially the small business owners.

eBay money back guarantee, click and collect and the recent “Managed Returned Process” are some of the most important changes that need to be understood for keeping your account in good standing order and ensuring smooth running of your eBay’s business.

Like I said earlier, most of these changes seem to be in the favor of buyer and people in various forums and blogs have commented and complained.

Like always, I look at them in a positive light. They, in the long run, help genuine sellers. I disagree with some sellers, bloggers and forum members unleashing arrows of criticism on eBay by saying that all these changes are made to please buyers.

Well, that should be. Buyers are the back bone of eBay community. They are the essence and the life blood of the business. Where there are no buyers, there is no business.

A successful and long term business does not simply want buyers. They want satisfied buyers.

If you want to take your business to the next level, do not sell to satisfy or please buyers, sell to buyers who are delighted.

The Transaction Defect Rate

how to remove defectsThe DEFECT change is, perhaps, the most challenging change among all the changes so far. As mentioned earlier, I personally look at eBay changes through positive glasses, but the recent defect change really seems to be flagging a dead horse or nailing a jelly to the wall. I admit that!

I am a top rated seller and since the launch of the new system in August this year, I have 1.49% defective rate. To keep my status intact, I must maintain the defect rate below 2%.

I know that 2 out of these 3 are not my faults and the third I mistakenly checked the “item out of stock” option for cancelling the transaction.

I understand, it goes the same for most sellers. But, we can sit and just start complaining against eBay for introducing these “unfair” and “unjust” changes. We need to take action to keep things smooth.

So what is the defect rate? It is one of the changes aimed at strict seller’s performance which was introduced in August 2014.

The transaction defect rate replaces the previous minimum positive feedback requirements.  Although, it replaces the minimum positive feedback requirement policy, feedback is still one of the most important components of the change.

However, according to eBay’s recent announcement, the transaction defect rate (TDR) will replace the DSR (Detailed Seller Rating) for evaluation purposes.

When something goes wrong in the transaction then it is counted as a defect. What counts as a defect, then?

There are number of things explained on the official page what counts as defect. Here is a summary

Detailed Seller Rating

I mentioned earlier that it replaces the overall DSR, but the DSR still plays a role in the TDR. If a buyer leaves a DSR of 3 or less than 3 for items as described, you get a defect.

Return for Item Not as Described

Buyers can now return items using eBay’s managed processed return. Although, buyers can still return item by privately communicating with the seller, you get a defect if they chose to use the eBay Managed Return system.

eBay Money Back Guarantee or PayPal Protection for Buyer

This is again for items not as described. Buyers may use either the MBG or PayPal’s protection. In return you get a defect.

DSR of 1 for Despatch Time

Shipping time is now even more important indicator of good selling practices than before. A DSR of 1 counts as one defect.

Negative Feedback

Previously a negative feedback would bring down the overall positive score percentage of the total feedback. Now, it will reduce it the same way with additional punishment of getting one defect.

Neutral Feedback

Neutral feedback is no more harmless. It can damage your reputation almost in the same way as negative feedback. One neutral feedback will get you one defect.

Transaction Cancelled

One you cancel a transaction due to an item being out of stock, you get a defect. In the past you could cancel a transaction for any reason and long as you refunded the buyer everything was good to go. No more!

How Many Defects Per Transaction?

Only one. Yes, one.

Let me explain it.

Let us suppose, you receive a negative feedback from a buyer, you will get one defect.

If you receive all other defect indicators for the same transaction, you still get one defect.

For instance, you receive a negative feedback, DSR 1 for despatch, or DSR 3 or lower for description or any other indicator, you still get only defect for one and the same transaction.

This is the rule for the time being. Will it change? Maybe. You never know.

How Does the Transaction Defect Rate (TDR) Affect You?

The impact is huge. All sellers must work hard to provide a pleasant shopping experience to the buyer to keep the standards high. A lower TDR ensures that you get all the privileges and your items rank higher in the search results. A higher TDR will cost you top rated status and search results.

In order to maintain the minimum standards for eBay Top Rated Seller, you must maintain a maximum of 2% TDR. If your TDR is higher than 2% then you top rated status in risk. For standard seller, the defects must not be more than 5% of the total transactions.

What happens if the rate goes higher than 5%? Possibly, a suspension!

The defects must come from 8 unique buyers in case of standard sellers or 5 unique buyers in case of Top Rated Status. It means if you received more than 8 (or 5 in case of Top Rated Status) from the same buyers which are not unique, you status will stay unaffected.

In addition, you must not have more than 0.3% of eBay Money Back Guarantee or PayPal Purchase Protection closed cases. Only those cases were counted which were opened by buyers and you did not sort and then eBay or PayPal found you responsible and refunded the buyer.

What is the Evaluation Period for TDR?

The evaluation period is 3 months if you have 400 or more transactions in the last three months. If the number of transaction is less than 400 in the last three months, the period extends to 12 months.

Can Buyers See Your Defects Rate?

Currently buyers cannot see you defect rate and can only see your DSR, feedback comments etc.

Evaluation Period

Your account will be regularly evaluated against the new standards. Currently, you are either evaluated three months or twelve months depending upon the number of transactions.

Three Months

If the number of transaction is 400 within the past three months, then the evaluation period will be the past three months.

12 Months

If the number of transaction is less than 400.

How to See Your Own Defects?

In order to see your own defect rate, follow the following steps.

Log in to your account
Click My eBay
Click Account
Click seller dashboard

seller dashboardstep by step to defect rate

How to Reduce the TDR Risk?

I know it seems tough to keep to the standards and maintain your top rated status. For any successful business, it is absolutely essential to change with the change. Consistent evolution ensures that the business meets its external threats by bringing about proper changes.

Here are a few tips that will help eBay’s Seller to reduce their Transaction Defect Rate, if not eliminate it altogether.

1. Improve Your Item Description

This the most important gauge or measurement because you can get defect if your item description does not meet the actual product sold. The lowest DSR minimum to escape defect should be above 3. You will also get a defect if the buyers go for managed return due to items not described correctly. Another way to get defect for description is when a buyer files a dispute for item not described and gets refunded via eBay Money Back Guarantee or PayPal Buyers Protection.

So the item description should be your No 1 point of attention. Here a few tips to correct your item description.

Describe Your Item As It is

Some sellers exaggerate the features and benefits and buyers attach higher expectation with product. Do not exaggerate the features or benefits your product offer. Honesty is the best policy.

Highlight the Defects

If your item has any flaws, do not try to hide them. Unprofessional sellers may try to earn a few bucks by hiding the defects in the item. Professional sellers, on the other hand, should highlight if there any flaws. Make such flaws bold in your description and even change the colour of the text. You may also use your photos to highlight any areas that you want your customers to know the weakness.

Let me reiterate that many defects are related to item not correctly described and you must get this part correct and leave no room for errors. You do not have a choice.

Write Detailed Descriptions

Do not leave your buyers to guess. Write detailed descriptions leaving no or minimum room for interpretation. If the item is used, mention it in the main description section in addition to mentioning it item specifics. Words as new, nearly new etc. are often confusing and subject to interpretations.

Use words such as used, brand new, in box, ex-display, mint condition, spare or repair etc. with utmost care to reflect only the true condition of your item.

2. Deal in High Quality Product Line

Selling cheap and inferior quality products are more prone to defect rates. It is highly unlikely to maintain your Top Rated Status if you deal in cheap quality products. This may even risk your whole business in the long term.

3. Take Professional Looking Product Pictures

An image is worth a thousand words as the saying goes. A bad image will say a thousand bad words about your product and the same is true of the opposite.

You may invest in product photography in buying some good quality equipment. This is mostly a one off investment which goes a long way to pay for itself over time.

4. Fast Dispatch Time

Customers love quick dispatch. Once an item sells and payment received, there is not point to let the item sit on the shelves in your store.

When I am done with the day’s packing of the parcel, I delay the trip to the post office till the last possible time of the day to include any latest orders.

If a customer’s order at 4:30 and receives it next morning, they will love to come again and leave you glowing feedback. Post your last sold item on the same day whenever it is possible.

5. Offer Free Shipping

Most sellers offer shipping on their items to get great rating on the DSR. When you offer free shipping, you automatically get a 5 rating on your DSR for shipping.

Some people ask how they can offer free shipping when it costs them? The reality is nothing is free. You just include the cost in your sale price. Instead of listing an item for $9.99 with a $4.99 shipping charge, list it for $14.98 with free shipping. This is a great strategy; it works!

6. Pack Your Item Properly

Whatever you do, all is lost once the customer gets a damaged or broken item in the post. Make sure you use suitable and secure packaging materials to pack your item.

It will not cost you much if you spend a bit more on your packaging materials. In the long run, it will save you money and your top rated status.

7. Make it Easier for Customer to Contact You

After item description, make it the most important part of your listing. Write it in bold that in case of any problem, the customer should directly contact you without any complain or negative feedback. Assure that you want to assist the customer in case of any issues.

Most customers read the contact information and would be happy to contact you through eBay messaging system or email. Once the customer contacts without filing a complaint, then do your best to solve the customer problem.

9. Provide Telephone Support

Many people think that eBay buyers do not like to make a call. I do not agree. My own experience says that they do call you if they need to sort a problem out. Telephone is the quickest way to be in contact with the customer.

Mention your telephone number several times in your listing inviting the customer to call if they need any help.

Also include a note to the same effect along with your phone number in your shipping.

Make sure you answer your customers call promptly and courteously. Once you give a contact number, you must attend the call. Just in case, you are unable to attend the call at time or your have been called at some unsocial hours, let the customers leave a voice message. Return your customers call promptly after listening to the voice message.

When the customer does not respond to your call, leave a polite message asking the customer to call you back at the time appropriate for them.

I understand that providing a dedicated telephone customer support is not easy to manage for some individual sellers because of the hassle involved, but serious business seller must establish a telephonic contact with the customers to lower the risk of receiving a defect.

10. Provide Support with Free Services

Providing support through Skype, Viber, Tango, and WhatsApp etc. is a great way to get you an edge over the competitors and keep your customer happy.

Remember the easier you make it for the customer to contact, the lower is the possibility of getting a defect.

11.  Follow up Email

Once you ship your item, send a follow up email thanking the customer for their custom.

Ask in the email to contact you if they have any problem. Make sure you mention that they contact you before the reach out to eBay.

Include all your possible ways of contact such as email, eBay messaging system, text message, telephone, Facebook, Skype, Viber and son on.

If you have been collecting customer’s email address, you may send a follow up email by just creating a broadcast to all customers by using email provider services like Aweber or Mail chimp.

12. Delight Your Customers

During my MBA years, we read several cases that businesses that delighted their customers had more long lasting impact than those who could simply keep them satisfied.

Delighted customers are excited to visit you back and offer repeat customs. Delighted customers become loyal to your business and happily enter in to long term business relationship.

13. The Customer is Always Right

No, he is not! But, yes he is! You know what I mean. Many times it is actually the customer’s fault. However, we must accept that the customer is always right. There is no business without the customer and we must do as much as we can. Sometimes, even a small favor can save you a defect.

You are doing no favor to your customer by selling him; it is the customer who is doing you a favor by providing you the opportunity to do so.

14. Contact eBay

Most sellers complain of the waiting time to call eBay. You may also speak to someone who is totally unaware of the whole thing. However, it is worth giving them a try.

I have not called them myself because of extremely busy schedule during the holiday season. It is on my “to do list” and will definitely report back here of any outcome.

The Chinese Factor

Many people think it is difficult to compete against the Chinese sellers especially on price. They offer dirt cheap prices. Most Chinese sellers have low DSR and with a low positive percentage. As each negative and neutral feedback is counted one defect, it looks extremely difficult for these sellers to keep their head above water.

This may be provide an advantage to sellers based in Europe and America. Non-serious sellers, quick buck earners and cheaters will find extremely difficult to survive!

The defect rate is the most unwelcome change. You have to be more professional than professional to stay in the business. There is nothing we can significantly do against the change; the above tips may help us to at least keep the risk minimum.

Out of all these tips, item description and reaching to the customer before the managed returns are crucial. They will either make or break.

I am KK an eBay and Amazon expert, teacher and internet marketer. I offer advice on e-commerce, content marketing and guest posting.

One comment on “Effective Strategies to Reduce Your eBay Defective Transaction Rate
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