Bidder Beware

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. But dozens of other sites also offer auctions. For savvy shoppers, these electronic flea markets may 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.

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 must 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 have to register for you.

There may be a fee for sellers to list merchandise 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 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.

If you plan to bid on a new item, check the going price at online stores or through comparison shopping sites. If you learn that you can buy a mobile phone at Amazon.com for $60 with free shipping, why bid more than that at auction? Don't get caught up in auction frenzy and bid more than retail--that's no deal.

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. This intelligence makes you more savvy when placing your bid.

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.

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.