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Online shopping at: Auctions
 At
nowhere else on the Internet does the free market economy rule as
it does in online auctions: Ready buyers bid, money changes hands,
ready sellers ship the goods and everybody's happy.
Well, almost. As with any endeavor involving humans
and money, online auctions have suffered their share of scams, hustlers,
cons, frauds and hackers out to cheat both buyers and sellers.
But in true democratic fashion, the law-abiding auction
community has taken it upon itself to weed out the bad apples by
posting publicly accessible profiles of buyers and sellers on the
auction sites for all to see. Let the buyer -- and seller -- beware
is the rule where online auctions are concerned.
How auctions work
Auction sellers register an item with the online auction site by
providing personal information, a detailed item description, photo
if available, minimum bid and reserve bid (if they desire to keep
the item rather than sell it below a certain bid), payment and shipping
information.
Online auction sites usually separate items
into broad categories: single items with reserve bid, single items
without reserve bid, multiple items available to multiple bidders
and items instantly available at a certain price. Auctions may also
feature a store where fixed-price items can be purchased.
Once you register as a buyer and thoroughly research
the seller, the item, the time remaining, the current bid and the
bid history, you are ready to make your bid.
Most online auction sites act as your proxy; that
is, you designate the maximum amount you would spend on the item
and your proxy keeps your bid as low as possible but incrementally
ahead of the others until it reaches that level. If another bidder
outbids you, the auction site will alert you via e-mail so you have
the opportunity to enter a new bid, time permitting.
Once the auction is concluded, you will be notified
via e-mail if you won; if not, you can check the auction site to
find out who did and the amount of the winning bid. To claim your
item, simply follow checkout instructions on how to pay the seller
for your acquisition.
Paying online for auction items
The popularity of online auctions brought with
it a payment dilemma: because online buyers and sellers typically
don't know (or trust) each other, how could the item and the money
change hands in a timely manner?
Buyers don't want to part with credit card or bank
account information or pay without assurance that they will receive
the item; sellers don't want to be stuck with a bad check or ship
the item until they have cash in hand. To further complicate matters,
most sellers don't have merchant accounts that would allow them
to accept credit card payments.
Online auction giant eBay,
allows buyers to pay via credit card or checking account debit through
PayPal.
The e-payment provider holds the money in escrow and
notifies the seller via e-mail that you have paid them for the item.
The money is electronically debited from your account into the escrow
account, then credited electronically into the account the seller
registered with the e-payment provider.
The U.S.
Postal Service and CheckFree
also offer Pay@Delivery,
an e-payment provider that incorporates an electronic version of
COD, or cash on delivery.
Buyers and sellers both benefit by online payment.
Buyers don't have to share their account information with anyone
but the e-payment provider, they can earn rewards points on their
credit card and receive the item sooner. Although sellers pay a
nominal fee based in part on the price of the item sold, they receive
their money sooner via direct deposit and greatly reduce their exposure
to fraud.
Despite the ease of e-payment today, buyers aren't
the only ones stuck in the slow lane; many sellers still accept
only cashier's checks or money orders for auction items.
Auction tips
Here are a few tips when buying merchandise through
online auctions:
- Avoid sellers who have numerous negative comments
on their profiles
- Know exactly what you're bidding on
- Ask questions about an item before you bid
- Contact the seller directly if you have complaints
- Wait patiently for your item to arrive; large-volume
sellers may only ship items once a week.
- Use a payment method with which you feel comfortable
- Write politely, calmly and rationally when you
e-mail the seller or post feedback on the seller's profile
-- Updated: March 28, 2003
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