Home > Buying at Auction > How to Pay For Goods at Auction

How to Pay For Goods at Auction

By: Chris Nickson - Updated: 7 Aug 2013 | comments*Discuss
 
Auction Payment In-person Auction Online

Back in the days before online auctions payment for an item you’d won at auction used to be simple. Nowadays, though, there are many options available, making everything more complex. But the bottom line, of course, remains the same – you win an item, be it something small, or big, like a car or a house – and you pay for it in full. Remember that a winning bid is a contract to purchase at the agreed price. If you fail to do so, you can be sued for payment in full.

In-Person Auctions

If you’re attending an in-person auction, the best thing to do is make sure you have money, either in the bank, or in cash. For smaller items, payment in full is expected after the auction. That can be cash, or using a debit or credit card. Note that for many small auctions, like house clearances, it will be cash only. Don’t expect to be able to pay by cheque these days, even with a cheque card.

In a number of cases, you’ll be able to make payment arrangements with an auction house, especially on big-ticket items. That means you’ll be able to pay a deposit, usually 10%, after you win an item, and arrange to pay the balance within a set period, which can range from one day to 28 days. The usual method is to pay the remainder via a banker’s draft. Do remember, though, that this is only on expensive items where arrangements have been made.If you’re bidding by proxy or by phone, you’ll need to make arrangements with the auction house. This will usually involve payment in full within a set period of time (and you’ll have to register your financial details with the auction house beforehand).

Online Auctions

The logistics of online auctions make payment more complex. You’re not paying the auction house, you’re paying the seller directly, and he will inevitably be a distance from you, quite often in another country.

In the early days on online auctions, payments were made by mail, either enclosing cash or a cheque, or via Western Union. The advent of Paypal changed all that. It provided instant online payments, and became the gold standard for online auction payments. It’s been widely imitated, with competitors all over the Internet. But when eBay bought Paypal, it moved beyond the reach of the competition.You can still pay for an online auction by snail mail, but these days the vast majority of transactions are via Paypal, which also offers protection to buyers in case of fraud or delivery problems, making it even more desirable.

All that’s required is that both buyer and seller have Paypal accounts, which are free to open. The amount is transferred from one account to the other automatically (link it to your bank account). It’s secure, and easy to use.

For expensive items, you’re advised to use eBay’s escrow service (note, use this one rather than an escrow service recommended by a seller, which could turn out to be a scam). Under this, you deposit payment into the escrow account, and it’s not released to the seller until you’ve received the item and are satisfied with it. It serves to protect both parties and act to increase trust. Other online auction services offer similar safe services.With online auctions, sellers usually allow up to seven days for buyers to pay. However, if possible, pay as soon as you know you’ve won the item. Not only does it speed up the process, but you’ll find your feedback comments are glowing.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Topics
Latest Comments
  • Who wrote this actua
    Re: Auction House Commissions
    Who wrote this actual trolley of garbage?
    19 July 2019
  • Diane
    Re: Problem With an Item Bought at Auction
    Won item from curr and dewars in Dundee, contacted them to confirm opening hours to arrange collection. Hired a van…
    13 June 2019
  • Francesca Gemeli
    Re: Selling Collectibles
    I have a full set of The Lord ofthe rings chess set 3. I have no board but i have the whole collection in mint condition. Im up for genuine…
    12 June 2019
  • Francesca Gemeli
    Re: Selling Collectibles
    I have a full set of The Lord ofthe rings chess set 3. I have no board but i have the whole collection in mint condition. Im up for genuine…
    12 June 2019
  • Topgun296945
    Re: Selling Collectibles
    I have 6 storage box’s of buffy the vampire stuff to sell books, statues, collectors cards. Badges, mouse pads , pencil case were can I sell?
    3 June 2019
  • charles azzopardi
    Re: The Legal Implications of Buying at Auction
    i bought an 18cent.maltese chest serpentine commode for stg.£4,450.-- in an auction on line bid on the…
    18 April 2019
  • jimbo
    Re: Consumer Law and Auction Goods
    I recently purchased a 'Rolex' at auction. Unfortunately a few days later I was admitted to hospital. I contacted the auction…
    28 March 2019
  • RhodieBoy
    Re: Consumer Law and Auction Goods
    06 March 2019 Hi, We sold a few items including used TV at a local auction this evening, and upon going to collect the cash…
    6 March 2019
  • Jade
    Re: Selling Collectibles
    I’m selling Aston Drake porcelain dolls mint condition authentication certificates and original packaging and also Franklin mint heirloom…
    14 January 2019
  • Nannie 2
    Re: Consumer Law and Auction Goods
    I have been purchasing items from an auction house for some time and selling the items on with the profits going to a charity I…
    5 January 2019