Buyers’ Negative Ratings and Textual Comments on eBay: Reasons for Posting Ratings and Factors in Denouncing Sellers

Abstract

In this study, we use a dataset collected from eBay to analyze buyers’ negative feedback ratings and associated textual comments. By using text mining and sentiment analysis, we identify seven key reasons why buyers post negative ratings: communication problems, shipping issues, product defects, payment refund problems, customer service issues, fraud, and product packaging. These seven reasons can be classified into three categories: (1) sellers’ malicious fraudulence toward buyers, (2) factors likely under the control of sellers, and (3) factors not likely under the control of sellers. Drawing on these categories, we discuss how sellers can effectively reduce the likelihood that buyers post negative ratings. The most important things sellers can do to avoid negative ratings are to improve communications with buyers and to handle product shipping issues properly. In addition to posting the reasons for their negative ratings of sellers, the textual comments associated with negative feedback ratings may also include direct denouncements of sellers, such as buyers explicitly claiming a seller is a liar and warning other buyers to be cautious of the seller. We collectively call these actions buyers’ denouncements against sellers. These denouncements have significant negative impacts on sellers’ reputations. In this study, we use correlation analysis and logistic regression to investigate the factors that motivate buyers to denounce sellers. We find that, of the three categories of reasons why buyers post negative ratings, sellers’ malicious fraudulence toward buyers and factors likely under the control of sellers are more likely to lead to buyers’ denouncements of sellers, while factors not likely under the control of sellers are not likely to lead to buyers’ denouncements of sellers. In addition, buyers’ strong negative sentiment is also more likely to lead to their denouncement of sellers. Managerial implications of these findings are discussed.