Payment Options

Credit Cards

You should always be cautious about handing your credit card number to unproven sellers. That said, once you're satisfied that a seller is legitimate using a credit card adds an extra backstop of consumer protection; federal law allows you to dispute the charges if you never received or were misled about the product you ordered.

Online Payment Services

Online payment services like PayPal or Google Checkout, which act as intermediaries between the buyer and seller, are popular with many Internet auction customers. Buyers often like them because they help keep credit card information safe. Many sellers also prefer payment services because they provide greater security and help guarantee payments.

Some online payment services offer protections if the seller fails to ship the goods or ships goods that are not as described in the auction. Make sure you read the terms under which the protections apply. If you can't find out what will happen if you need a refund or if you don't understand how the payment service works from reading the Web site, find a different service or use another method of payment.

Escrow Services

Escrow services protect buyers and sellers from fraud by holding payment from a buyer until they receive and approve the merchandise. Once the buyer confirms receipt of their purchase the escrow service then forwards the payment along to the seller. Buyers pay a fee for this service, so many tend to reserve this option for big-ticket items like computers, cars and jewelry.

The FTC has warned consumers to be on the lookout for fraudulent escrow services. Buyers should check out unfamiliar escrow services before handing over any money or account information. Check with your state or local Consumer Protection Board (www.nysconsumer.gov) or your state Attorney General's Office (www.oag.state.ny.us) to see if they have any complaints on file. Make sure to read the terms and agreements section of their Web site. Don't do business with any company if you are not satisfied that they are a legitimate, reputable company.

Debit Card, Personal Check, Cashier's Check, or Money Order

Buyers should use these types of payment only when they completely trust the seller, as they offer few consumer protection mechanisms. At the same time, sellers who choose to accept these methods of payment should ensure that checks or money orders they receive are legitimate before shipping the goods. And they should never accept checks or money orders for amounts that exceed the price of the merchandise.

Wire Transfers

Sellers who insist on wire transfers as their only form of payment are likely con artists. If you wire money and something goes wrong with the transaction, you have no recourse. Your payment is gone. Some auction sites now prohibit the use of wire transfers for just this reason.