From Marketwatch:

EBay Inc. said Wednesday that it would cut some listing fees “dramatically” as the online auction giant responds to increasing competitive pressure from such rivals as Amazon.com.  Shares of eBay fell more than 1% to $25.06 by midday trading Wednesday. The stock has shed more than 20% of its value over the last three months.


Ebay is missing the point.  Yes, lower fees are always welcome. But they are meaningless in the eyes of Ebay customers who also want better service.  Ebay customers want want tighter monitoring of fraud, which is reportedly rampant on Ebay, and which Ebay apparently disregards.  Ebay customers defect to Amazon because they trust they will receive exactly what they pay for.  Pricing is secondary.

MSNBC investigated Ebay and reported the following:

…the company doesn’t routinely inform customers when they have been ripped off or regularly notify law enforcement about apparently illegal activity on its site.

…Fraud complaints filed with eBay rarely trigger any disciplinary action against sellers, even when accompanied by extensive documentation of wrongdoing.

…EBay acknowledges that it doesn’t automatically suspend the cheating sellers it catches.

…In a case in which postage stamps were allegedly being altered to increase their value and then resold “as is,” eBay took no action to halt the auctions despite receiving a litany of complaints from a group of stamp experts who assembled detailed evidence on the purported scam.

There are also grass root petitions generated by Ebay customers who were victimized by fraudulent sellers, but apparently with no disciplinary action against the sellers from Ebay.  One such petition, with thousands of signatures, claims the following:

Every day 1000’s of FAKE MP3\MP4 players are being sold to unsuspecting buyers worldwide. These players are being listed as having 2GB\4GB and 8GB (Gigabyte) of storage capacity but in reality they have much smaller memory modules that have been manipulated (Hacked) so that they read as larger than their true capacity. These memory modules can be as small as 128MB. Unfortunately most buyers do not realize they have been scammed until it is too late.

Is eBay aware of that these fraudsters are using their service to scam millions of dollars on a global scale? The answer is yes, every day they receive complaints from buyers through the eBay system. Every day their sister company PayPal receives dispute claims from buyers of these players seeking a refund. Despite the 1000’s of complaints eBay chooses to turn a blind eye to the whole scandal, even blocking buyers from trying to warn other members of the scam.

If Ebay is going to retain their existing customers, and have any hopes of recovering lost customers, then they need to concentrate on customer service.  Lower fees alone just won’t cut it.