A store full of products on display


Auctions have always been popular means to buy and sell merchandise, from small community fundraising sales to gala events hosted by famous auction houses like Christie’s and Sotheby’s.  Traditional auctions bring to mind images of fast-talking auctioneers banging mallets to close a deal, or lavish rooms filled with rich buyers, ready to bid on rare antiquities and works of art.

But these days, the term “auction” conjures up an entirely different picture:  buyers impatiently refreshing the online auction pages on their computer screens, as the minutes tick down to the final bid.

The Internet has changed the way people do practically everything, as well as the way we buy and sell.  In fact, Internet auctions have gained incredible worldwide popularity, with the eBay as the undisputed leader.  Nowadays, anyone with Internet access can buy or sell online.   Bidders don’t even have to be in the same time zone, let alone in the same room.  Virtually everything is bought and sold on eBay auctions, from expensive antiques and works by master artists, to everyday personal creations and household items.

It’s easy to get familiar with buying and selling on eBay:

*  All participants have to sign on to establish an eBay before buying or selling.  Every participant receives his or her own unique user-designated screen name like, for example, Catgirl99.  If the user consistently violates eBay rules, then the website can discontinue the account as sanctions against that particular user.

*  Anything can be put up for bid on eBay, with the exception of drugs, pornography, and illegal items.  Usually, the seller sets a reserve price, which will act as the minimum bid and starting point for online offers.  For instance, Catgirl99 is selling a kitty collar with bells on it.  She will not take less than five dollars, so she sets the reserve at a five-dollar minimum bid.

*  The seller places the item on his or her eBay page, along with a product photograph, a description, and a sales pitch.  Here, Catgirl99 writes, “Never lose your cat again!”  The seller sets a bidding period for the term of the auction, normally around two weeks.

*  Buyers search the eBay site for products they are interested in.  When the product is found, potential buyers will place bids.  The initial bid must be higher than the reserve, and, of course, higher than any previous bids.

*  As more bidders start to take action, the price of the item up for bid continually rises.

*  After the predetermined time has passed, the bidding will close.  At this point, the auction is ended and the item is considered sold to the highest bidder.  The sale is confirmed with both parties, and the buyer gets in touch with the seller to arrange payment and delivery terms.

Buying and selling on eBay really is a very simple technique.  With items offered for sale from literally every part of the globe, it’s easy to see why this method of buying and selling has become so hugely popular.  Ebay auctions make it simple for buyers to find hard-to-find and collectible items, and sellers can easily locate interested buyers to purchase their items.  With strict rules in place, eBay also helps to protect both parties by promoting fair transactions.

That is not to say, however, that online auctions are free of fraudulent cases. Over the past three years,  according to the Federal Trade Commission (FTC), Internet auction fraud has ranked consistently as one of the most filed consumer fraud complaints.  In fact, both buyers and sellers have filed cases where deceitful parties have scammed them.

The secret to security when buying and selling on eBay, is to understand what the scams are, and recognize the setup before it’s too late.

Bid Siphoning

You’ve found the item you’ve been searching for, and the seller emails you directly to tell you that there is an alternate auction site where you can buy his or her product at less than the eBay price.  Never follow up on this offer.  Legitimate auction sites like eBay provide buyer protection in the form of insurance.  If a seller fails to deliver a product you’ve paid for, eBay may be able to replace the money you’ve lost.  They will, in turn, pursue the seller and charge him or her accordingly. If your purchase, however, was made outside of eBay, that protection may not be available to you.

Bid Shielding

This is a common scam perpetrated by buyers.  A product is shielded from fair bidding when a buyer places a high starting bid.  Other bidders don’t want to vie with the high price, so they leave the auction.  Just before the bid closes, the scammer withdraws his or her bid and starts bidding under another name.  Since the auction is about to end, therefore, the second lowball bid becomes the final selling price.

Shill Bidding

A shill is usually a swindler’s accomplice.  Shills drive up the online bids, forcing legitimate bidders to raise their bids.  You’ll be able to spot a shill if the product doesn’t seem to carry the value of the price it commands.  Shills place high bids to tempt others to raise their own bids.  In the end, the highest bidder has paid much more than they normally would have, often for a product of compromised value.   Counterfeit or knock-off products, stolen items, and refurbished pieces can be sold this way.

These are the most ordinary cases of Internet auction fraud.  Being aware of these situations, and being cautious in general, can help you avoid the unpleasant experience of being scammed of your money or goods. Nevertheless, buying and selling on eBay still proves to be a  reliable and fair way of marketing merchandise.

Internet auctions like eBay have created a true global market–connecting buyers with sellers and helping the world to connect through responsible and fair trade.

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Filed under: Ebay Business