Using Escrow at Auctions
You may be familiar with escrow as a term but can it work in auctions? Yet eBay suggests it as an option, especially for larger purchases, as a way of ensuring satisfaction from both parties and avoiding possible disputes.
It’s a good tool, one that works well for both buyer and seller (you see more and more sellers offering escrow for purchases these days). For high-ticket items, it promotes trust between the parties – and gives the buyer a chance to inspect the goods before any money goes to the seller.
How It WorksThe important first step is that both buyer and seller have to agree to use escrow, although either party can propose it. From there the parties sign in to eBay’s escrow page and enter the item number of the auction.
After signing into the escrow site (eBay has one it recommends, escrow), the buyer and seller agree on the details, such as who pays postage or shipping, the conditions and length of the buyer’s inspection time, and who will pay the escrow costs (it’s not a free service).
Once that’s settled, the buyer sends his winning bid and any other agreed-upon expenses to the escrow service. When they’ve received it – and payment can by via cheque, postal order, credit card or banker’s draft – they’ll inform the seller, who then sends the item using a trackable method, so delivery can be confirmed.
Upon receipt, the buyer has a specified length of time to inspect the item and accept or reject it, informing the escrow company of his decision. Once it’s accepted, the amount in escrow will be forwarded to the seller.
If the buyer refuses to accept the item, he must return it to the seller, paying the shipping costs. After it’s been received, his payment will be returned, although without the escrow fee.In the event an item arrives damaged, the buyer has to reject it and report the damage to both the shipping company and, of course, the seller. The escrow company holds on to the money whilst everything is resolved.