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 are required to ship merchandise within the time frame specified during the auction, or, if a
time frame is not specified, within 30 days. If you can't meet the shipping commitment, you must give the buyer an
opportunity to cancel the order for a full refund or agree to the new shipping date.
- When describing your item, state its condition
- Anticipate questions buyers might have and address them in the description of your item or service
- When possible, include a photograph of the item. The saying that a picture is worth a thousand words is
especially relevant in Internet auctions
- Specify the minimum bid at the lowest fair price you're willing to accept
- Specify who will pay for shipping, and note whether you'll ship internationally
- State your return policy, including who's responsible for paying for shipping costs or restocking fees if
the item is returned
Dealing with Bidders
- Respond as quickly as possible to bidders' questions about the item you're auctioning or the sales terms
- 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 "winning" bidder 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
once 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. Visit its Web site. Be suspicious of claims about being affiliated with a government agency. Call
the customer service line. If there isn't one, or if you call and can't reach someone, don't use the service.
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
information unless you know why it's being collected, how it will be used, and how it will be safeguarded
Be suspicious of an online escrow service that cannot process its own transactions and requires
you to set up accounts with online payment services. Legitimate escrow services never do this.