EBay Authenticate: Noble effort, dubious solution

By Wayne Jordan

EBay is about to jump into the quagmire of product authentication. A few weeks ago eBay announced the roll-out of their eBay AuthenticateTM program [http://ebay.to/2jCZBBG]. The idea, they say, is to “boost consumer confidence, especially for higher-end transactions.” The program is set to begin later this year (2017). The proposed eBay authentication (eBay Authenticate) is a three-step process:

eBay AuthenticateTM Steps

• Sellers or buyers opt-in to the program (for a fee, of course)
— When an item is sold, it is shipped to a third-party “expert” for authentication
• If the item is determined to be authentic, it is shipped to the buyer. If the buyer subsequently determines that the item is not authentic, they can return it and receive a refund of twice the purchase price.

For now, eBay Authenticate seems to be focused on designer fashion accessories. But, celebrity collectibles, autographs, and other memorabilia are achieving record prices at auction.

Authentication services for many of these items already exist. Will eBay attempt to roll these into the program as well?

eBay illustration

Illustration obtained from eBay.com

Early Feedback

As you can imagine, eBay sellers aren’t thrilled about the new program. Some have even claimed that it will create a higher level of fraud than now exists.

Said one eBay seller: “I see thousands of obvious fakes listed every day, many of them higher value items. If I can now buy those and get twice the money back, I should be able to make a good 6- or 7-figure income each year.” [Comment by ken070: http://bit.ly/2ld1VU1]

I’ve read reader comments on this program across a half-dozen websites. Often-repeated seller concerns about eBay Authenticate include:

What About….What If….

— How are the “experts” chosen?

• Will there be enough authenticators for the size of the market?

question_mark— Will there be shipping delays due to slow processing by authenticators?

• Many sellers are themselves experts in the products they sell; how are disagreements between seller and authenticator handled?

— What if an item is damaged due to poor packaging by an authenticator?

Perhaps eBay will address these issues before the eBay Authenticate program rolls out.

New Program, Familiar Situation

We know that eBay has a credibility problem; it always has. They have struggled to overcome this issue for the past twenty years. The website The Counterfeit Report [http://bit.ly/2lcWBAb] claims to have received over 2,000 counterfeit products from eBay sellers representing over 400,000 eBay listings. Counterfeits weren’t limited to designer fashions; fakes included auto parts, iPhone chargers, over-the-counter drugs, electronics, sporting goods, children’s toys, and fragrances. Some of these items were deemed to be dangerous.

The essential flaw is, of course, the trustworthiness of the buyers and sellers themselves. Let’s face it: Fraud is rampant. It’s rampant not just on eBay, but everywhere. In 2015, the U.S. Customs Service confiscated $19.5 million in fake NFL merchandise [http://bit.ly/2kkwwjD]. In November 2016, four persons were arrested for selling $1.5 million in fake designer handbags and jewelry from their homes and beauty salons [http://bit.ly/2l1evUr].

These incidents are just the tip of the iceberg.

Seriousness of Scam Scenarios

An Arlington, Virginia, preschool teacher was recently sentenced to thirty-three months in prison for perpetrating the same scam that strikes fear into the hearts of eBay sellers: buying a genuine item and returning a fake for a refund. The Arlington woman had designer handbag knock-offs made for her in China and Hong Kong. She bought genuine bags at Neiman Marcus and TJ Maxx in twelve states, using sixteen different credit cards, and then returned the fake handbags to the stores for a refund. The real ones she sold on Instagram and eBay. The scam cost the retailers more than $400,000.

And eBay proposes to give fraudsters double their money back? No wonder sellers are concerned. For crooks, eBay Authenticate could be a license to steal.

What gives me pause is the skill level of the authenticators. Even when objective analysis standards are applied, well-meaning authenticators (and sellers) may disagree. The owner of a well-known collectibles auction house recently said to me: “The entire authentication business is a scam.” Is eBay offering a scam as a solution to scams?

In an article in the Miami New Times on autograph fakery, writer Jake Rossen makes the point:

“… independent experts…all have the same problem: They sometimes get it wrong. While the specialists say their services have cleaned up an industry rife with fraud, critics say their ‘expert authentication’ is little more than pseudoscience used to generate millions in profits at collectors’ expense” [http://bit.ly/2l1v16P].

More Concerns and Questions

Unfortunately, consumers don’t know any of this. For the most part they think that the opinions of “experts” cannot be disputed, just as they think that an object’s value is inherent and appraisers will always reach the same value conclusion.

Laughable.

There will be eBay buyers who won’t buy without “authentication” and sellers who won’t opt-in to the program. Other sellers may feel obligated to participate in eBay AuthenticateTM  fearing that they will lose sales if they don’t.

Me? Not in a million years. I already offer a no-questions-asked refund on my eBay sales. I’ll never agree to give someone double-their-money-back. Let them buy somewhere else.

In My Opinion…

eBay Authenticate is an honorable effort, and I applaud eBay for their attempt to improve their

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credibility. But, this program will go the way of so many other eBay “improvements.”

Are these programs inherently bad? Is eBay simply a flawed platform? No, not at all. The core issue is that some people are just crooks. Crooks are out to make a fast buck, and they don’t care who gets hurt in the process.

Reputable sellers want to make money as well, but not at the expense of their reputation.

Ultimately, online transactions are between a buyer and a seller. They should communicate with one another, just as they would in an offline transaction. EBay and PayPal do the best they can to police a colossal marketplace. Most transactions go smoothly; but some don’t (just like with offline transactions).

We’ve all heard phrase caveat emptor (buyer beware). More appropriate to the eBay AuthenticateTM program is still another Latin phrase: caveat venditor (seller beware).

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