Every day, jewelry, Chinese porcelain, computer hardware and tens of thousands of other items change hands via online auctions. eBay, the 800-pound gorilla of the auction world, has become the darling of bargain hunters and collectors. But dozens of other sites also offer auctions. For savvy shoppers, these electronic flea markets may reward you with outstanding values. But you may also find yourself a victim of fraud. Unlike buying products in the real world, online auctions pose some unique risks. To get the best prices and prevent rip-offs, read on.
- 1 How Auction Sites Work
- 2 Get the Best Buy
- 3 Avoid Fraud
- 4 Frequently Asked Questions
How Auction Sites Work
As with online stores, the exact auction procedure varies by site. All reputable sites should offer clearly written instructions and provide a way for you to ask questions.
In general, to participate, both sellers and buyers must register with the site. Usually this is free. You must provide your name, address, phone number and e-mail address. Some sites have age restrictions. For instance, if you are under 18 years old, your parents have to register for you.
There may be a fee for sellers to list merchandise, and typically sellers also pay the auction site either a flat fee or a percentage of the final sales price. Buyers pay sellers directly and may also pay shipping costs. Most auctions are time-based, meaning that the highest qualified bid at the end of a predetermined period–say a week–wins the item.
Get the Best Buy
1.Research the product first.
If you plan to bid on a new item, check the going price at online stores or through comparison shopping sites. If you learn that you can buy a mobile phone at Amazon.com for $60 with free shipping, why bid more than that at auction? Don't get caught up in auction frenzy and bid more than retail–that's no deal.
2.See what similar items cost.
Before you bid on used merchandise or collectibles, follow the action on a similar item. This will give you a good idea of the amount of interest–the number of bidders–and the amount of the winning bid. This intelligence makes you more savvy when placing your bid.
3.Set a limit to avoid bidding wars.
Determine how much you are willing to pay and don't exceed that. Unless you are bidding on something extremely rare, you will certainly find it listed again. Many sites allow you to set your high bid when you place your initial bid. This can be a good way to keep yourself in check.
4.Use a bidding service.
If you regularly use eBay, we recommend eSnipe, a service that automatically places your bid in the last few seconds of the auction. The chief advantage is that your interest in the item is concealed, so it reduces bidding wars, holding the price down. Winning bidders pay eSnipe a small fee, which is more than outweighed by what you can save.
As a buyer, you can't physically examine the item you want to bid on. The best you can hope for is a detailed description and digital photos. You'll have to trust the accuracy and that you'll receive your purchase in the stated condition. That's where the potential for fraud is greatest.
eBay and many other auction sites now offer satisfaction guarantees, allowing you to return an item that does not arrive in the condition claimed, but it’s your job to first study the listing to make sure it really is what you’re looking for. And don’t assume a site offers protection; make sure to read their guarantee policy before bidding. It's up to you to be a smart consumer. Here's how:
1.Read the auction site's policy carefully.
Make sure you understand how the auction works before you bid and what the obligations of the buyer and seller are. For instance, if you win a bid, but change your mind, are you on the hook? What sort of protection against unscrupulous sellers does the site offer? Links to details as such can usually be found in the footer menu.
2.Know the seller.
Get the seller's vital information, including name, address and phone number. Ask the seller how she ships, how long delivery takes, whether insurance is available and inquire about the return policy. Check the auction site to see if there is any negative feedback about the seller, be sure to check the legitimacy of positive ones too.
3.Check out the merchandise.
E-mail or call the seller directly if you have any questions about the item. Don't bid unless you are satisfied with the answers.
4.Be wary of “fabulous” finds.
If a deal seems too good to be true, it probably is. It might mean the item is stolen or fake. A healthy dose of skepticism prevents you from becoming a victim. Contacting the seller is often a good step to take too.
5.Choose Your Payment Method Wiseley.
Using a credit card affords you the same protection you have when making purchases in the real world. Debit cards do not offer the same level of protection and should be avoided whenever possible. Online payment services, such as PayPal, usually offer some type of buyer protection and fraud guarantee, and they allow you to bid without providing sites with your financial information. Just make sure you read their terms of service and are satisfied with the liability protection they provide. For expensive purchases, consider using an escrow service.
Most bidding sites now handle the payment, so you never have to send money to a bidder directly. If you find a site that doesn’t do this, use extreme caution. Never send cash and avoid sending checks or money orders, especially to post office boxes. If you must pay this way, only send payment to the address listed by the seller on his or her auction page.
6.Keep a record.
Print a copy of your transaction for your records.
Online auctions remain wildly popular, because the vast majority of people have a positive experience. If you do have a bad experience, try contacting the seller first. Sellers rely on customer feedback to build their business, so if something is wrong, they usually want to make it right. If they are not helpful, check the auction site’s policy for returns and complaints. As a last resort, contact your credit card company and/or payment service and report the fraud. If you do become a victim of auction fraud and you live in the United States, you should also report it to the National Fraud Information Center or the Federal Trade Commission.
Frequently Asked Questions
How can I tell if the pictures are accurate?
Just because the seller posts pictures of an item, doesn’t mean that’s what it looks like. If you are shopping for a used item, be wary of images that are too perfect. The seller may be using stock photos or stealing someone else’s pictures. If you can’t tell, trying doing a Google image search for the photo. If you’re using Chrome browser, right click on the image and click “Search Google for this image.” If Google finds several identical images, you should think twice before bidding on the item.
How can I prove I didn’t get what I bid on?
You should be able to access the original listing page even after the auction has closed. Usually you can do this by visiting your account page on the auction site and reviewing your winning bids. You may also be able to find a link to it in previous emails you received about the auction. Once you find the original listing, compare the photos and item information to what you received. Before you contact the seller or request a refund, make sure the error was the seller’s and not yours.
How do I know I can trust a seller?
The first thing you should always do before bidding is review the seller’s feedback. If they have any negative reviews, read them and find out why. One or two unhappy buyers isn’t a reason to avoid a seller altogether—some buyers will never be happy—but if several buyers are complaining, or if even a single buyer mentions any type of unscrupulous business practices, you should find another seller. Another thing to look at is how many reviews the seller has had. Being new to an auction site doesn’t automatically make a seller untrustworthy, but it’s a lot easier to trust someone who already has thousands of satisfied customers.
If a seller has an online store too, should I buy the item from there instead?
Plenty of sellers now sell through online stores and online auctions. Some auctions sites, including eBay, even allow sellers to pick whether items are put up for auction or listed for a fixed price. As a seller, using both methods allows you to offset the inherent risk involved in putting an item up for auction. If the seller has identical items up for auction and for a flat fee sale, pick whichever one will give you the better deal. If the seller has an external store site, before you purchase anything there, make sure the site is secure. Check out our Safe Shopping guide for more information.
Is it better to use credit cards or PayPal?
There was a time when using a credit card was always the better choice, but PayPal now offers similar fraud protection to credit cards. PayPal also offers some advantages, most notably that more eBay sellers accept it. And since you can pay with PayPal without entering any credit card information, it also cuts down on the number of companies that have the financial information on file, making you less likely to be impacted by a data breach. On the other hand, linking your PayPal account to your bank account may open you up to some additional risks.