If you choose to read further, please make sure to wear your "Tin Hat" and verify that there are no “Black Helicopters” in the airspace around your home or place of business.
After thinking about the new "eBay Bucks" test some more, I came to a simple conclusion: This test is brilliant on eBay's part.
First, they test the program with half of Q2 still ahead of them, so there is plenty of time for the excited registrants of the program to "Shop Victoriously" and earn their "eBay Bucks". eBay collects their regular take while delaying payment for the promotion until Q3 – Brilliant!
Since we have no idea how big the test group is we will assume it is sizeable enough to move the GMV and revenue needle upward for the quarter while pushing the cost of the program into Q3.So in Q3 these excited “random” users continue to "Shop Victoriously" for another month-and-a-half before they get to redeem their earned “eBay Bucks” and eBay continues to get their regular take from sellers.
Now, here is the brilliance of the program: The user will have one month to redeem their "eBay Bucks" and they can only use it for purchases on eBay between August 22nd and Sept 21st, 2008. I don't know about you, but I'm on vacation in late August so I won't be on eBay buying anything and would most likely forget about my "eBay Bucks" when I got back. That time of year, is also when consumers are doing their “back to school” shopping which I don't recall every doing on eBay.
Even if I did redeem my earned "eBay Bucks" I would have to spend them on eBay where they would once again get their take of the FVF and other fees from the seller.It's all in the math and the percentage of users who would actually redeem their "eBay Bucks" will be relatively small; just think of how many gift-cards never get redeemed. Those "random" users who do redeem their "eBay Bucks" will have spend them on eBay where eBay still gets the FVF on that purchase and eBay generated far more revenue from the increased spending for 3 months, while only allowing the redemption for 1 month.
This is a perfect example of offering a promotion that looks like it will pay out pretty big to the user, but that actually costs eBay very little and by rolling it out now, they can stoke their Q2 numbers without having to pay anything for the promotion. -- in case you are wondering, that is the "tin hat" part of this post.
Anyway, if the promotion increases sales on the marketplace everybody will be happy; sellers because they sell more product; investors because the promotion really doesn't cost eBay much; eBay managers because they are able to get the benefit in two quarters and buyers because they think they are actually earning something.
Brilliant, I say Brilliant!
Can you tell I was bored?