As popular as they are, online auctions should be approached with
care. Many times, merchandise is offered that either may be
illegal, fraudulent, or simply doesn't exist, and the vendor
takes your money and runs. So what can you do to protect yourself
if you enter bidding in an online auction.

You should understand how the auction works. Many online auctions
simply list items that people want to sell. They don't verify if
the merchandise actually exists, or if it is described
accurately.

You should therefore check out the seller. If it is a company,
contact the state or local consumer protection agency and Better
Business Bureau where you live, and also where the company is
located.

Many auctions have a feedback section for comments about the
seller. Be aware that a clean complaint record doesn't guaranty
that someone is legitimate, and that glowing reports could be
"planted" by the seller.

You should know the value of the product before you bid. If
the product is brand new, check to see what price retailers are
charging for it. If the product is used or reconditioned, you
will want to pay way less than the retail value.

Be especially careful if the seller is a private individual. Most
consumer protection laws and government agencies that enforce
them, don't deal with private sales, so if you have a problem, it
could be impossible to resolve. Always get a physical address and
other identifying information. You'll need the seller's name,
street address and telephone number to check them out, or follow
up if there is a problem. Don't do business with sellers who
won't provide that information.

You should ask about delivery, returns, warranties and service.
Get a definite delivery time and insist that the shipment is
insured. Ask about the return policy. If you're buying electronic
goods or appliances, find out if there is a warranty and how to
get service. Don't get caught up in a bidding war; you may end up
paying more than the product's worth.

Be especially wary of claims about collectibles. Since you can't
examine the item or have it appraised until after the sale, you
can't assume that claims made about it are valid. Insist on
getting a written statement describing the item and its value
before you pay. Online auctions will, sometimes, allow you to
check the merchants history with their auction. Check to see if
people have complained about the their products or business
practices before you decide to bid.

Pay the safest way. Requesting cash is a clear indication of
possible0 fraud. If possible, pay by credit card because you can
dispute the charges if the goods are misrepresented or never
arrive. If you pay by check, make it out to the seller. But
remember that the merchandise probably won't be shipped until
your check is deposited and cleared, so stopping payment is not
an alternative.

PayPal, while very convenient and used by many, it has been
reported that they may not provide the same protection as a
regular credit card in the event of fraud. It is my opinion that
they fall into the same category as paying by check.

Someone who has a bank account is not normally a person who "hits
and runs". Know if the merchant offers a warranty or money back
guarantee or before bidding on a product. You don't want to get
stuck with a product that does not work or you're not satisfied
with.

If you do have a problem, let the auction site know. Some sites
investigate problems like "shills" being used to bid prices up or
other abuses of the auction system. They may also want to know
about sellers who don't deliver or misrepresent their wares. A
bad record may result in a seller being barred from using the
site in the future.

Above all, use common sense to guide you. Ask yourself: Is what
the seller promises realistic? Is this the best way to buy this
item? What is the most I am willing to bid for it? If someone
does out bid you, don't be afraid to out bid them. Remember
however, not to go over your maximum bid price.

If you follow these simple rules, you may find the online
auctions to be a source of some great deals. If you don't, you
may still get that great deal, but you could also find yourself
wishing you had.

About the Author
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