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Internet Auction Rules

Internet auctions are online bazaars. Some are the scenes of business-to-person activity, where a Web site operator physically controls the merchandise for sale and accepts payment for the goods. But most specialize in person-to-person activity where individual sellers or small businesses auction their items directly to consumers. In these auctions, the seller — not the site — has the merchandise. The person-to-person sites require sellers to register and obtain a "user account name" (or "screen name") before they can place items for bid. Sellers also must agree to pay a fee every time they conduct an auction. Many sellers set a time limit on bidding and, in some cases, a "reserve price" — the lowest price they will accept for an item. When the bidding closes at the scheduled time, the highest bidder "wins." If no one bids at or above the reserve price, the auction closes without a "winner." At the end of a successful person-to-person auction, the buyer and seller communicate — usually by email — to arrange for payment and delivery.

Source: Federal Trade Commission

Payment Options

Successful bidders usually pay by credit card, debit card, personal check, cashier's check, money order, or cash on delivery. Credit cards may offer buyers the best protection in that they allow buyers to seek a credit from the credit card issuer (also known as a "charge back") if the product isn't delivered or isn't what they ordered. Typically, sellers on business-to-person auction sites accept credit card payments. In contrast, most sellers in person-to-person auctions require a cashier's check or money order before they send an item.   In many cases, an online payment service or an escrow service is used to facilitate payment. 

Source: Federal Trade Commission