Jul 22, 2024

Selling Items Online Through Internet Auctions

Tips for Sellers...

Know Your Legal Obligations

Under federal law, you’re required to advertise your product or service and the terms of the sale honestly and accurately. You can’t place “shill” bids on your item to boost the price or offer false testimonials about yourself in the comment section of Internet auction sites.
You’re prohibited from auctioning illegal goods; some auction sites have further prohibitions on sales of other items. While many auction sites monitor to ensure that illegal items are not being offered, the responsibility for ensuring that a sale is legal rests with the seller and buyer. Some auction sites post a list of prohibited items.

You are required to ship merchandise within the time frame specified during the auction, or within 30 days, if a time frame is not specified. If you can’t meet the shipping commitment, you must give the buyer an opportunity to agree to the new shipping date or cancel the order for a full refund. To learn more about your responsibilities when shipping products, see A Business Guide to the Federal Trade Commission’s Mail or Telephone Order Merchandise Rule.
Advertising Your Product

    * When describing your item and its condition, state whether it’s new, used, or reconditioned.
    * Anticipate questions buyers might have and address them in the description of your item or service.
    * When possible, include a photograph of the item. There’s much truth to the saying that “a picture is worth a thousand words.”
    * Specify the minimum bid you’re willing to accept.
    * Specify who will pay for shipping, and whether you’ll ship internationally.
    * State your return policy, including who’s responsible for paying shipping costs or restocking fees if the item is returned.
    * Let prospective bidders know whether you provide follow-up service; if you don’t, tell them where they can get it.

Dealing with Bidders

    * Respond as quickly as possible to bidders’ questions about the item you’re auctioning or the terms of the sale.
    * When the auction closes, print all information about the transaction, including the buyer’s identification; a description of the item; and the date, time, and price of the bid. Save a copy of every email you send and receive from the auction site or the successful bidder.
    * Contact the successful buyer as soon after the auction closes as possible; confirm the final cost, including shipping charges, and tell the buyer where to send payment.

Arranging for Payment

    * If you accept credit card payments from the buyer directly, bill the credit card account only after you’ve shipped the product.
    * If a buyer insists on using a particular escrow or online payment service that you’ve never heard of, check it out by visiting its website or calling its customer service line. If there isn’t one, or if you call and can’t reach someone, don’t use the service. If the service claims to be affiliated with a government agency, that’s a sign of a scam.
    * Before agreeing to use an online payment or escrow service, read the terms of agreement. If it’s an online payment service, find out who pays for credit card charge backs or transaction reversal requests if the buyer seeks them.
    * Examine the service’s privacy policy and security measures. Never disclose financial or personal information unless you know why it’s being collected, how it will be used, and how it will be safeguarded.
    * Don’t use an online escrow service that does not process its own transactions, but that requires you to set up accounts with online payment services. Legitimate escrow services never do this.
    * Check with the Better Business Bureau, state attorney general or consumer protection agency — where you live and where the online payment or escrow service is based — to see whether any unresolved complaints are on file against the service. But remember that a lack of complaints doesn’t guarantee that the service has no problems.

Look Out for Fraudulent Checks or Money Orders

Sometimes, your bank may not alert you that a fake check or money order has been returned until after you have shipped the merchandise. If you are suspicious about a check because it is written by a third party or for any other reason, call the person who wrote the check to verify that they have authorized it. If you receive a check or money order for an amount that exceeds the successful bid, and the buyer asks that you wire the excess funds back to him or to a third party, do not wire the money. Instead, return the check to the buyer, and do not ship the merchandise.

If you accept payment by check, ask for a check drawn on a local bank, or a bank with a local branch. That way, you can make a personal visit to make sure the check is valid. If that’s not possible, call the bank the check was drawn from and ask if it is valid. Get the bank’s phone number from directory assistance or an Internet site that you know and trust, not from the person who gave you the check.
For Buyers and Sellers...
Where to Turn for Help

If you have problems during a transaction, try to work them out directly with the seller, buyer, or site operator. If that doesn’t work, file a complaint with:

    * the attorney general’s office in your state.
    * your county or state consumer protection agency. Check the blue pages of the phone book under county and state government.
    * the Better Business Bureau.
    * the Federal Trade Commission. File a complaint online at ftc.gov.

The information on this site was created by the Federal Trade Commission and has been compiled by the site owners, who are not responsible for any errors or omissions. Site design is a trademark of quantastic.com © 2008

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