Shop Safely on eBay with these Insider Tips

While there are unquestionably ripoffs on eBay, a little bit of smart shopping and an understanding of auction psychology can help you sidestep all but the most ingenious. I have completed about 350 transactions on Ebay in the last few years, both items I've bought and sold, and I can't recall ever getting ripped off. I don't think that eBay is inherently the devil's lair.

eBay also has tons of merchants who sell fixed-price items and offer a smart alternative to auctions. I find they're often a better deal because you know the final price before you click the button.

It's also critical to know that the system automatically increases your per-item bid up to the maximum value you specify, even if that's far beyond the actual value of the item.

What does this mean? That if you were buying a $9 book, say, and accidentally bid a maximum of $99, if someone else was also eager to get their hands on it, you might well end up paying $50 or more for the $9 item. Not a bargain! There's also an element of psychology, what I call the auction frenzy, where you actively bid on that $9 book because you just have to win, darn the price! Then you do win for $75 and say "oh my god, what have I done?" and panic.

This leads to my first rule: Do some research and determine a maximum price you'll pay for something before you bid. For many items, there are credible, legit stores online (like buy.com or even amazon.com) that are selling the same item for less than your zealous max bid. You can also search eBay for *closed* auctions and get a good sense of the average winning bid price for a specific item. I use that quite frequently to set my not-to-exceed bid.

eBay also has a sophisticated feedback system and I suggest you avoid sellers with less than 50 feedback points or a string of recent negative feedback. Someone who is looking to make a few bucks on a con isn't likely to complete 50 transactions to gain the feedback points (though some do: "shilling circles" are one or more people who bid on each other's auctions just to quickly increase their collective feedback ratings). That's rule two, by the way.

A third rule is to try and understand why they're selling the particular item. Are they a speculator? Are they knowledgeable about the product? Is it stolen or broken? You can email questions directly to a seller and that's a very good way to learn if they're legit. I always ask them "why are you selling this if it's so cool?" just to see what they say. For this reason, I also state in my own auctions why I'm selling the item.

A few more tips: never pay with cashier's check or money order, use an escrow service (like escrow.com) if it's a big ticket item, and always, always double-check the shipping cost before you bid. In fact, the latter is a huge problem on eBay now and if you're not
careful you could end up paying $39 shipping on a $9 book, for example. Oh, and don't buy celebrity signatures off eBay. The chance of fraud is far too high to risk it.

Okay, armed with those tips, you should be ready to go! eBay sellers, watch out!