Internet auctions are big business today. Around for less than 10 years, online auctions are now the great phenomenon of the Internet. About 35 million Americans have used an online auction site. You can shop for everything from out-of-print books to vacation packages to luxury cars to collectibles. These huge international flea markets allow you to buy an incredible variety of new and old merchandise from the comfort of your home, often at bargain prices.

But online auctions can be risky even while they are fun and convenient. The major problem is that you have to buy things you cannot see from people you don&8217;t know. In fact, auctions were the top ranked Internet-related complaint to the Federal Trade Commission in 2003. The most usual complaints are that items were never received, arrived damaged or weren&8217;t described accurately. You can&8217;t make sure that every online auction purchase goes smoothly, but there are some steps to improve your odds.

How Auctions Work

You search for what you want to buy. You can browse by category, for example, &8220;music&8221; or by keyword, &8220;Beatles.&8221; After finding an item you want, you place a bid by saying the most you are willing to pay. The auction&8217;s electronic bidding system starts your first bid at just enough to make you the highest bidder. As other bidders raise the bid price, the system makes bids for you, up to your maximum price.

If someone outbids you – or if your bid is lower than the seller&8217;s minimum &8220;reserve&8221; price, the system lets you know.

Example: Maria wanted to buy an old book on Leonidas Polk, a relative. She placed a maximum bid of $200. Since there was a bid already for $54, the system entered her starting bid at $55. Other consumers raised their bids several times until Maria&8217;s top bid of $200 was reached and then passed. She dropped out of the bidding and lost the book. (If the bidding had stopped at under $200, Maria&8217;s bid would have won.)

Auctions last anywhere from three to 10 days. If you are the highest bidder when the bidding closes, you get an email saying that you are the winning bidder. Then you and the seller contact each other to make payment arrangements. Generally, sellers ship the items after they receive your payment or once your check clears. After you receive your purchase, you can post your comments – good or bad – about your buying experience. This helps other buyers figure out if they want to deal with that seller.