Instead of partnering with sellers, eBay is pulverizing them.

eBay's controversial new feedback system rolled out May 19, 2008 leaving thousands of sellers with drastically altered feedback ratings -- some sellers lost their PowerSeller status at the stroke of midnight.

New rules for lean timesWhat happened is that eBay changed the rules of the game retroactivally making neutral feedback received over the past 12 months count as a negative. Previously a neutral rating did not count against the score at all. This calcuated move reduced feedback for thousands of eBay's top sellers effectively leaving them with a score under 98%, which disqualifies them for PowerSeller discounts. A select few improved their scores. The overall net result is that eBay will dish out fewer PowerSeller discounts.

"No negative feedback" policyeBay seller doomsday was also marked by a new policy to encourage even lower seller ratings, thereby effectively reducing further the PowerSeller discounts supposedly awarded by eBay. Buyers may now only receive positive feedback.

Sellers and buyers today received the following notification when leaving feedback:

"Buyers, you can no longer receive negative or neutral Feedback from sellers. You should leave honest and accurate Feedback without the fear of receiving negative or neutral ratings."

Perfect timing!Higher postal rates... tactically eBay could have made all the changes in February 2008 along with the other so called "enhancements," but eBay likely timed their plans with the USPS who raised postal rates May 12, 2008. Higher postage rates are nudging buyers to further lower Detailed Seller Ratings on shipping and handling. This effectively reduces PowerSeller discounts as sellers must maintain an impossible 4.8/5.0. (No one likes to pay for shipping.)

Bad economy... The timing is also aligned with the delivery of economic stimulus checks roll out. Sales on eBay will surely go up because people have a check in hand, not because buyers are no free to leave feedback. But eBay will surely credit themselves, and its sellers will continue to play the role of "whipping boy."

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M.C. Nygard is a Platinum PowerSeller who had a perfect 100% feedback score that tarnished overnight by being reduced to 99.8%. She still qualifies for 15% PowerSeller discounts.