Brings buyers and sellers together to resolve
problems with online transactions
Editor's note: Can disputes be settled in cyberspace through online
mediation? SquareTrade.com, a leading online dispute resolution service,
has attracted a great deal of interest from consumers and business
marketplaces. Chatelaine's Antiques Collectibles & Appraisals is pleased to welcome SquareTrade as one of
its valued partners.
In the dreams of Steve Abernethy, flame wars and vitriolic negative
feedback will be a relic of 1990's e-commerce.
To realize his vision, Abernethy founded SquareTrade. The site offers a
unique web-based system with a series of guided steps to help buyers and
sellers settle disputes. If direct negotiation between parties doesn't do
the trick, a mediator steps in and helps them work things out.
"The Internet is still young," says CEO Abernethy, "and
it's still coming to terms with the possibilities and pitfalls of
e-commerce. SquareTrade provides a critical mechanism to create buyer
confidence that benefits all transactions, not just the one that's gone bad."
Abernethy and his two co-founders contacted Jonathan Zittrain, a professor
at Harvard Law School and a known expert in the area of cyberlaw. Through
Zittrain, the three were introduced to Professor Ethan Katsh, Co-Director
of the Center for Dispute Resolution and Information Technology at the
University of Massachusetts at Amherst.
Professor Katsh had recently completed an online dispute resolution
pilot with Ebay. He and Janet Rifkin, Co-Director of the Center, along
with Abernethy and his co-founders, germinated the idea for a business. In
August 1999, they founded SquareTrade and in February 2000 launched a
no-fee pilot program on Ebay. Within ten minutes, the firm was handling
its first dispute.
SquareTrade has now handled thousands of cases. They've learned that
less than one-third of the situations involve outright returns. Most cases
fall into a grayer area of customer satisfaction.
Resolving A Dispute
In a case that grew out of a sale on Ebay, a man bought an Eames chair for
$800. It arrived bearing the soft patina of mold and the odor of mildew,
though the seller insisted that it was clean when he sent it.
After a series of increasingly inflamed exchanges between buyer and
seller, with threats of damaging negative feedback bandied about, the
seller registered a "complaint" through SquareTrade in which he
checked off boxes indicating what the problem was. As with real-time
dispute resolutions, a large part of the process is distilling the dispute
to the events, rather than the emotion that can make resolution nearly impossible.
After a series of exchanges that took place on a secure case page
hosted on SquareTrade's Web site, the buyer and seller were unable to
reach an agreement and requested a mediator. SquareTrade's mediation
process is handled online, with no live sessions. This speeds things up
because the parties involved do not have to find a time to get together.
"The mediator listened to both parties," says Abernethy,
"and what came out was that the buyer really liked the chair and
wanted to keep it but felt the merchandise wasn't as promised or depicted
on Ebay. The seller didn't want to deal with return shipping costs and
having to list the chair again, and risking potential negative feedback.
So together they determined that it would cost $150 to have the chair
cleaned. The seller paid $100 and the buyer paid $50, and both parties
were happy with the outcome."
Since launching the eBay pilot program, SquareTrade has signed a
two-year exclusive deal with the trading community.
SquareTrade now charges $15 and up for its services. The company has
become partners with Onvia, a site that provides products and services for
small businesses and HelloBrain.com, an intellectual capital online
Sites that display SquareTrade's Seal have pledged to work with
customers to resolve disputes through SquareTrade's neutral, third party
process. "A large component of online merchants' concerns has to do
with protecting reputation. And both buyers and sellers need the comfort
that their concerns will be taken seriously. Often, the issues are not
black and white."