Trade Me rolls out new buyer-protection service
17 Feb 2017
Trade Me (NSX: TME), a marketplace and auction site in New Zealand, unveiled a new buyer-protection service for consumers trading new and used goods across its general marketplace.
The buyer can apply for a refund, if the item he’s purchased, or won in an auction, is not as it was described, or if the item didn’t turn up. Following an investigation by Trade Me, the buyer will be refunded his money.
The buyer-protection service will be rolled out on Febr. 21, and covers general marketplace items purchased through the Trade Me card-payment system up to a value of $2,500 NZD ($1,800 U.S.).
Stuart McLean, Trade Me’s head of marketplace, described the buyer-protection service as a “safety net” developed to give consumers better peace of mind when using the site, but added that only a “tiny percentage” of Trade Me transactions ever result in a problem.
“The buyer-protection initiative is a free safety net, and another way for us to show our members that we’ve got their backs,” McLean said. “On those rare occasions [when there is an issue], we want to make it easier for members to get things sorted out.”
The company also hopes the buyer-protection service will establish a point of difference between Trade Me and other general marketplace sites – many of which don’t accept responsibility for the items sold on their sites.
“It’s important that our members know Trade Me is different to unregulated marketplaces,” McLean said. “With us they have someone to contact if they need a hand, and an avenue to get a refund if something goes wrong.”
Although nearest competitor EBay does offer a money-back guarantee, the guarantee doesn’t cover used goods, which Trade Me’s buyer-protection plan does.
“This gives our buyers a great level of protection when choosing their next second-hand fridge, bike or trampoline,” McLean said.
McLean said the buyer-protection service would have minimal impact on sellers, as most of the sellers on the site have a good reputation within the Trade Me community, and are already “experts” at resolving issues.
“Only rogue sellers will have an issue with this — they’re the ones who will hear from us, and it will force them to smarten up their act, or get off Trade Me altogether,” he said.
News of the announcement, however, saw the company’s share price fall 4.1 percent to $4.95 NZD ($3.62 U.S.). Speaking to the NZ Herald, Mark Lister, head of private wealth research at Craigs Investment Partners, said the announcement could be weighing on the company’s share price.
“It’s obviously good for their customers, but it potentially could add to their costs if they’re obliged to provide refunds when trades go wrong,” Lister said.
“They’ve had a good run of late so [it’s] not surprising they’ve had a bit of weakness.”