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ABSTRACT
Third-party seal programs, such as BBBOnLine, have emerged as a thriving e-service for building consumer trust on the Internet. Given the impersonal nature of electronic commerce, third-party seals are well positioned to act as the intermediary between competitive online vendors and nervous online consumers. This article surveys the current landscape of existing third-party seal programs, examines their role in building trust between vendors and consumers, and discusses the challenges that lie ahead.
Keywords: trust, third-party seals, e-service, Internet shopping.
INTRODUCTION
Substantial barriers to ubiquitous consumer adoption of online commerce still exist. A primary obstacle preventing consumers from purchasing goods and services online is their lack of trust in online retailers (Hoffman, et al., 1999). Many online retailers are new and relatively unknown to consumers, with rhe distance and impersonal nature of online shopping making it even more difficult for consumers to assess the trustworthiness of online stores (Fung and Lee, 1999). Internet vendors must engage in trust-building activities, to differentiate themselves from their competition and to survive. A recent study of online buyers indicated that trust in, and recognition of, the merchant by buyers was the most critical factor in the selection of an online vendor (Lynch et al., 2001). Trust is generally difficult to build, but easily lost, with significant cost implications. Amazon.com clearly illustrates the benefits of acquiring customers, satisfying their needs, and building their trust. Amazon enjoys repeat business that accounts for 73 percent of its sales. Given its strong word-of-mouth advertising and brand recognition, Amazon spends an average of only $19 to acquire each new customer who is expected to spend approximately $150 per year (Hof, 2000).
To aid consumers in their evaluation of online retailers and other service providers, a growing number of online services such as Bizrate (www.bizrate.com) and Gomez (www.gomez.com) have attempted to aggregate consumer feedback and provide ratings of online stores. Others, such as BBBOnline (www.bbbonline.org) and Trust.e (www.truste.org), have been developed to allay consumer fears of privacy violation. Many consumers rely on the recommendations made by these third-party agencies in choosing online vendors. Online vendors, on the other hand, use the endorsement of third-party agencies as a tool to build consumer trust. This article surveys the landscape of existing third-party seals on the...