New Channel To Resolve Disputes

Online services help e-businesses mediate customer complaints

By L. SCOTT TILLETT

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Luring consumers to your Web site can be challenging enough. Resolving a dispute with them after they have purchased something from your site might be even trickier.

To address this challenge, a group of companies that act as intermediaries has begun to emerge, aiming to resolve disputes between consumers and e-businesses online.

There are as many as 20 such Web sites, said Richard Naimark, senior vice president at the American Arbitration Association. Among those emerging as key arbitrators are Cybersettle.com, eResolution, iCourthouse and Square Trade.

And it's not just consumers that are looking at these services. For example, HelloBrain.com and online auction site eBay signed deals with Square Trade to help them handle their disputes. Also, eResolution, a company approved by the Internet Corporation for Assigned Names and Numbers to help resolve disputes over domain names, announced plans to have a system in place by fall for resolving broader business-to-business e-commerce disputes.

In most cases, the services these companies offer blend automated Web-based tools with human mediators in a process that seeks to remedy a buyer's or seller's dissatisfaction with a transaction. But Naimark said there's room to refine the hybrid process.

"You're going to see in the next year a lot of attempts to broaden the process," said Naimark, adding that many online mediators are focused on business-to-consumer transactions. "What they're really doing is taking existing paper-based models and people-based interactions and transplanting them to the Web."

Naimark said these service providers need to focus on providing their clients with more options for resolving disputes and making their Web-based services easier to navigate.

At Square Trade, the hybrid is emerging. Its service allows unhappy customers of a commerce site or Web marketplace to initiate a complaint. The Web-based service standardizes complaints through "radio buttons" that let a buyer click to articulate a problem for a seller--rather than writing a long e-mail and then sending it blindly to a random address, said Steve Abernethy, Square Trade's CEO.

The radio buttons cover common topics such as "item was damaged" or "I got the wrong item." The service also allows a buyer to designate a desired outcome--be it a full refund, partial refund or a replacement item. From there, Square Trade sends an e-mail to the seller's specific customer service rep, who is invited to visit a password-protected Web site to view the buyer's complaint. The site allows the seller to enter its own comments, to resolve the case or to request that a live mediator be brought in to mediate the case by communicating with both parties via the Web site and proposing solutions.

A party who requests mediation through eBay could pay $15 to resolve a dispute on Square Trade, Abernethy said. Outside of eBay, each party would pay about $20 to call in a mediator. For mediation services, Square Trade also might charge a fee of 0.50 percent when a dispute is resolved.

These new services give e-businesses a chance to improve their standing with consumers. An online mediator's seal on an e-commerce site, therefore, might help garner a customer's confidence, Abernethy said.

CRM Issue

HelloBrain.com CEO Bharat Sastri said, "This is a customer relationship management issue." His company serves as a marketplace to connect engineers, programmers and designers with companies looking to buy their talents. "We have to be prepared when there is an exception condition," he said.

And in e-commerce, it might make sense to use the Web, rather than paper-based processes and face-to-face meetings, to mediate a dispute, said Maneesha Mithal, an attorney with the international arm of the Bureau of Consumer Protection at the Federal Trade Commission, whose officials are still trying to determine their role in online dispute resolution.

"When you're talking about e-commerce, you're talking about consumers in one country doing business with businesses in other countries," she said.