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Online Auctions for Sellers

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If you have items to sell — whether they’re quirky, quaint, chic or practical — you might want to sell through an online auction. If you do, check around to see how different sites operate. Learn about sellers’ responsibilities and best practices, and how to spot some common scams, so you can make the most of your time online.

Choose a site

You want to find a site that fits your needs. To start, think about sites where you’ve bought things — did you like how the sites worked and the items you saw there? Are you looking for a site that lets you sell a variety of goods, or one that focuses on a specialty? Visit different sites and consider:

  • if you’d like to shop there
  • what it costs to be a seller, and whether the cost seems reasonable to you
  • if you’re comfortable with the site’s rules for sellers
  • if the site offers help that matters to you, like instructions or ideas about best practices for creating your account page, writing listings or managing your business
  • if the site helps you communicate with buyers and resolve customer problems

See what current sellers say about their experiences on a site. You can search for sellers’ comments by typing a site name and ”reviews” or ”selling on” in your web browser, or search for sellers’ discussion groups on or off the auction site. The sellers’ remarks may tip you off to issues you haven’t thought of yet.

How will you get paid? Some payment systems are more secure than others. When you look at a site, see if it requires buyers to use credit cards, which provide some protection, or an online payment system that processes payments from buyers’ accounts into sellers’. If you plan to sell high-dollar goods like furniture or electronics, look for a site that lets you use an escrow service for payments. An escrow service accepts a buyer’s payment and tells the seller payment was made, so the seller will ship the item. After the buyer accepts the shipment, the escrow service releases the payment to the seller.

Is your information secure? You’ll have to give the site personal and financial information (like a bank or credit account number) to pay for services. Find out how the site will protect and use your information, and look for indicators that the site is secure, like a URL that begins https (the "s" stands for secure).

List an item

Your item listings and advertising must tell the truth and include all relevant information so they don’t mislead people. Honest ads are required by law, and they’re good for business too; when you’re clear about an item up front, you build trust and save buyers from asking questions. For example, if you’re selling something that isn’t in top condition, add words like “used” “refurbished” or “as-is,” and describe the damage or defect. As you create a listing, try to think like a buyer. Use key words — like brand name, model number or color — that someone might use when they search. Your listings may get more attention if you add details and vivid descriptions. For example, instead of listing “Red ladies boots,” try “Red leather Western boots, Women’s size 10.”

Include a few photos of the item taken from different angles. Shoppers want to see the actual item you’re offering, not generic photos of something similar. Provide the item’s dimensions and weight too, so buyers can calculate any shipping costs they must pay. Include your email in your listings so people can easily reach you if they have questions.

Explain how you operate

Your rules and sales policies can influence a person’s bidding decisions. Make sure your policies are easy to find in every listing, and easy to understand. Buyers will want to know:

  • what payment methods you accept
  • whether an item comes with a warranty, and if it does, how long the warranty lasts and what it covers
  • if you accept returns or exchanges, and if you do, for what reasons and in what time frame. If you don’t accept returns or exchanges at all, it’s important to say that.
  • the shipping options you offer and what they cost; who pays for shipping and reshipping if necessary; and when you ship after an auction ends

Read about the site’s process, so you’re aware of any deadlines for getting help. An FTC rule requires you to ship sold items within the time you stated in the auction, or within 30 days if you didn’t state a time. If you can’t meet the shipping commitment, you have to give the buyer a chance to agree to a new date or cancel the order for a full refund.

Keep transaction records

After an auction ends, print or save copies of transaction records, including the product description, final price and your communication with the buyer. The auction or payment system may have copies of records, too. Keep records of when and how you shipped the item, package tracking and proof of delivery.

The Internal Revenue Service (IRS) small business website has information about recordkeeping requirements for online auction sellers, whether they sell occasionally or as an ongoing business. If you must keep any sensitive personal information about a customer, like a name plus a credit or other account number, you need to store it securely and dispose of it properly. This FTC guide explains how.

Work out problems

Your copies of transaction and shipping records may help you resolve a buyer’s complaints about an item’s quality or features, or whether it arrived as promised. If you and the buyer can’t settle the issue, contact the site’s dispute resolution staff. Explain what you’ve done so far, share copies of your records and ask for their help.

Scams against sellers

Scammers online aren’t looking for bargains. They’re after your merchandise, money and personal information. There are things you can do to guard against them.

Use safer payment methods. Use credit cards or an online payment system or escrow service that you choose or the auction site recommends.

It’s risky to accept a bank or cashier’s check or money order, even if it shows the name of a legitimate financial institution, because it could be counterfeit. Your bank may accept a check or money order at first, because the bank must make funds from deposited checks available within a few days. It may seem that the check has cleared and money is in your account, but it can take weeks to uncover a fake check. If you ship merchandise before a check or money order fully clears and it turns out to be fake, you lose the merchandise and the payment you’re owed.

Don’t respond if a buyer asks for your bank account number so he can “deposit payment to your account.” Once he gets access to your account, he’ll probably take your money, not add to it.

Check out several companies before you choose an escrow service. Search online for the company name and the word “complaint” or “review,” and see whether your state requires the service to be licensed. If you want a buyer to use a specific online escrow service, make that clear in the listing. If you get an email saying the buyer deposited money with a service or third party receiver you didn’t choose, don’t ship anything. It could be a spoof email that makes it look like money is waiting for you when it isn’t. If you rely on the message and ship the item, you could lose the item and never get paid.

Log into your accounts. Don’t hit “reply” or click on links in email messages that look like they’re from the auction site or payment system. You might end up on a spoof site that imitates a legitimate site. A hoax message might say something alarming to make you react quickly, like:

  • “Your account will be shut down if you don’t respond immediately to validate your information.”
  • “We suspect an unauthorized transaction on your account; click here to verify your account details.”

The scammer may want to steal your information, or trick you into downloading malware onto your computer. Instead or replying or clicking, type the auction or payment site’s web address (URL) in your browser and log into the site. If the auction or payment site really has sent you a message, you’ll see it in your account and you can respond there.

Also, a scammer may send an email that looks like it’s from the auction or payment site to “confirm payment was made.” The scammer hasn’t really paid, but he hopes you’ll believe the email and ship the item before you review your account. Before you ship anything, type the payment site’s web address (URL) in your browser, log in and check your account.

Sell only things you have in your possession. In one chronic scheme, a scammer contacts a seller and asks her to list his merchandise for him, and collect buyers’ payments. The scammer tells the seller to keep a share of the “payments” and forward the rest, and says he’ll ship merchandise directly to the buyers. But after the scammer gets the money, he usually doesn’t ship the goods that were advertised. Disappointed buyers contact the person they paid — you — with complaints and refund requests.

Use the contact information the site has on file. Don’t play along if someone contacts you after an auction ends, claims he’s the highest bidder, and asks you to ship to an address that isn’t the buyer’s address on file. He may be a scammer who hijacked the real bidder’s account and wants to steal the merchandise away from you and the legitimate bidder. When you use the address information that’s on file, you protect yourself and the true buyer.

Tell the site about a problem buyer. For example, if a buyer asks to return an item for a refund, but sends you junk instead of the item you shipped out, tell the site operators. Even if you can’t prevent the cheater from getting a refund, you can help the site screen out scams.

Report fraud

If you have problems during an online auction transaction, try to work them out directly with the buyer and the auction site. If that doesn't work, file a complaint with the Federal Trade Commission and your state Attorney General.