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Building a Global ODR System: Lessons from eBay and PayPal Colin Rule

Building a Global ODR System: Lessons from eBay and PayPal Colin Rule Director of Online Dispute Resolution, PayPal UNCITRAL ODR Meeting Vienna March 29, 2010. Why Do eCommerce Companies Invest in ODR?. All markets must provide redress Without it, users lose trust

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Building a Global ODR System: Lessons from eBay and PayPal Colin Rule

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  1. Building a Global ODR System:Lessons from eBay and PayPal Colin Rule Director of Online Dispute Resolution, PayPal UNCITRAL ODR Meeting Vienna March 29, 2010

  2. Why Do eCommerce Companies Invest in ODR? All markets must provide redress Without it, users lose trust Trust is essential to online marketplaces Redress is just one element of trust building Offline, redress is usually judicial Courts provide civil and criminal options Law enforcement guarantees outcomes Online, markets must provide it themselves Geographies are irrelevant Enforcement must reside in the code

  3. eBay’s ecosystem is bigMore than 240 million usersMore than 4 billion feedbacks leftMore than 60m disputesfiled per yearIf eBay users were counted as citizens, eBay would be the 5th largest country in the world

  4. How does eBay provide redess?eBay is not a sellereBay has no product,other than a website eBay and PayPalhave created a global economic democracyeBay’s job is to ensure that the marketplace continues to run smoothly – as such, eBay is a third party convenor B S S B

  5. The eBay/PayPal Platform

  6. Types of Low Value, Cross-Border Commercial Disputes Business Business Business CS Agent Consumer Consumer Consumer Consumer B2CBusiness to Consumer B2BBusiness to Business C2CConsumer to Consumer B2CCustomer Support to Consumer

  7. What Lessons Have We Learned? • Buyer Lessons • Seller Lessons • Enforcement • Platform

  8. Buyer Lessons • For buyers, it’s all about trust and predictability • Keep the process simple • Make it easy to find • Lots of support and ways to access it • (phone, email, live chat, contextual help) • Clear status meters • Buyers need education and expectation setting • Resolutions must be quick • Keep attentive for buyer fraud • Protection programs are important • Buyers are more likely to leave forever

  9. Seller Lessons • Good sellers want to work issues out • Let sellers play the lead with their customers • The majority of issues are misunderstandings • Some sellers are fraudsters • All cases of fraud first appear as disputes • Must be aware of the dolphins in the net • Set incentives and sellers respond • Give sellers the tools to work at volume • Sellers’ priority is on fairness • Communicate clear policies • There is a clear economic value for trust

  10. Enforcement • Enforcement is essential to success • Sellers will ignore outcomes with no enforcement • Buyers don’t want decisions, they want results • Funds should be held in escrow at the time of filing • Buyers must receive refunds ASAP after decision • Refunds should come through the same channel as the original payment • Fraudulent sellers must be held accountable • Enforcement actions need not be transparent

  11. Platform Lessons • Use the Fourth Party • It’s the only way to scale • When carefully designed, it works well • Automation can be appropriate online • Put resolution processes in the transaction flow • API enable all work flows • Don’t work all volumes manually • Crowd-source complex cases to scale • Be aware of perverse incentives • Platforms must always evolve and self-improve • Track feedback from all process participants

  12. OAS-ODR Overall System Design Central Clearinghouse Seller Sellers each opt-in to the system voluntarily ODRProviders OASCaseDB Seller ODR providers apply and are approved individually Seller Key Components:A Central Clearinghouse, who maintains the case database; National Administrators; and ODR providers approved by the National Administrators NationalAdministrator NationalAdministrator

  13. Conclusions • It is possible to build scalable ODR systems • No system will be perfect at launch • We must learn from existing systems • We should allow for continuing innovation • The goal is a safety net, not primary redress • The best resolution is no dispute • Second best is seller handles the matter • Any system must meet buyer and seller needs • If it does not, it will quickly become irrelevant • Online users ignore tools they don’t like

  14. ResourcesThe National Center for Technology and Dispute Resolution: http://odr.infoThe UN Working Group on ODR:httwww.odr2010.com.arThe ODR International Workshop series:http://odrworkshop.infoADR Cyberweek: http://www.odr.info/cyberweek.php

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