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Protect Yourself: Online Auction Acumen

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, as well as Wall Street investors. But dozens of other sites also offer auctions. For savvy shoppers, these electronic flea markets can 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 ripoffs, read on.

According to the U.S.-based National Fraud Information Center, auctions top the list of Internet scams.

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 will need to 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 will have to register for you.
There may be a fee for sellers to list merchandise for sale 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 the 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

Here are a few winning tips:

Research the product first.

If you plan to bid on a new product, check the going price at online stores or through comparison shopping sites. If you know that you can buy a CD player at Amazon for $60 with free shipping, why bid more than that at auction? Don't get caught up in auction frenzy and pay over retail--no deal there.

See what similar items are selling for.

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. Knowing this information will make you more savvy when you place your bid.

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.

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.

Check the Shipping Charges

Before you bid on an item, check the cost of shipping, especially if you are thinking of buying an item from another country. It could add considerably to the final price, turning your "steal" into a bad deal.



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