A question was recently put to us regarding the process of buying items on eBay and the safety of such purchases.

“Is there a way to purchase an item on [eBay] and have the seller not be paid until I receive the item?” was one key question. Our first response was “no.” We had never heard of any such practice on eBay.

However, we decided it was worth looking into.

We found that like many others who do business on eBay, we had neglected to educate ourselves fully in the practices of buying and selling on this Web site, the largest online auction site. It is much bigger than we expected on first examination.

On further examination of the site, we found a good many options for being safer when doing business through it. One method in particular caught our eyes. This option is something called “escrow.”

Many of us are familiar with the escrow process when buying real estate property, but have never heard of using it for online purchases. This concept is a good one, to be sure. The escrow company acts as a go-between for the seller and the buyer and holds the buyer’s money in escrow until he or she receives the merchandise safely and is satisfied. The company then releases the money to the seller. If the buyer never receives the merchandise, the money is returned to the buyer less the cost of the escrow fee.

Online escrow works like this:

1. Buyer and seller agree to terms. This includes what is to be bought, how much it is going to cost, shipping information, and how long the buyer has to inspect the merchandise as well as who is responsible for the escrow fee.

2. The buyer pays the escrow company.

3. The seller ships the merchandise to the buyer using a shipping company that offers online tracking.

4. The buyer accepts or declines the merchandise.

5. The escrow company either pays the seller or returns the money less the escrow fee to the buyer depending on whether or not the merchandise was accepted.

The escrow agency that eBay recommends is www.escrow.com.

After doing quite a bit of research on this online escrow company, we have found it to be based in California and legally licensed within that state to do business.

There are some safety precautions to follow in regard to doing business with an online escrow service.

Don’t be too quick to start any transaction. Do a bit of research. Find out if they are legally licensed to do business in the state in which they are based. Examine the site closely. Is it well-organized? Does it look sloppy or have misspelled words? All of these questions can help you decide if you should do business with the site. If something doesn’t look right, that may be the red flag for you not to do business with that site. Remember, it is always better to be safe than sorry.

The vast majority of the millions of people who regularly do business on eBay do so without difficulties. Reducing risk in any online transaction to protect yourself, whether you are a buyer or a seller, should be explored fully. Remember to study the ratings of the buyers and sellers in which you are interested. The escrow concept can be an excellent way to protect your interests. There are many online escrow sites. EBay endorses just one site, and Northeast COMBAT offers no specific endorsement of any site. We are pleased to provide this information and hope your online transactions are more safe and hassle-free.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast COMBAT-Maine Center for the Public Interest, Maine’s membership-funded, nonprofit consumer organization. Individual memberships $25, business rates start at $125 (0-10 employees). For help and information write: Consumer Forum, Bangor Daily News, PO Box 1329, Bangor 04402-1329.