Do you have to pay auction fees with credit cards?

by Richard Seltzer, seltzer@samizdat.com, www.samizdat.com

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The following article was written for GoTo Auctions (formerly known as AuctionRover). The rights have reverted to the author.

A reader recently asked a couple of related questions: How do most auction sellers pay their fees to the auction site? I know of some sites request a credit card upon registration for automated collection of their fees -- I believe eBay is one. Do sellers widely accept this practice, or is there still some resistance to using credit cards over the Internet?

First there's the question of using credit cards online. For a long time, the major holdback to buying and selling over the Internet was psychological -- a lingering, illogical fear of using credit cards online. It was like the introduction of ATM machines, or of the use of 800-number services for buying goods with credit card, or even the first introduction of credit cards. It takes a while to get used to the idea, then you simply take it for granted. For most people, that's no longer an issue.

Keep in mind that the $50 limit of liability online is exactly the same as the liability for physical world use of credit cards. And just as in the physical world, when you pay with a credit card, and you have a problem, you can report the incident to the credit card company and they'll remove the charge from your bill, pending investigation, which is likely to prove costly and time-consuming to the merchant. If you are in the right, the charge will be reversed and the vendor will end up paying penalty fees to the credit card company, in addition to losing the purchase. Plus, if the credit card company gets too many complaints about a given vendor, it can take away that company's right to take credit card orders, which could seriously hurt that business. In other words, whenever you pay with a credit card, you have a way to get disputes resolved with the merchant, no matter who that vendor might be and where it might be located; and the merchant has lots of incentive to make sure that you are satisfied.

Second there's the question of auction sites requiring that you provide credit card information in order to register to sell. Even Yahoo which is a free service, with no charge to post your auctions and no fee assessed on the sales price, insists that you provide credit card information.

Remember that on the Internet "no one knows that you're a dog" or a cat or a seven-year old. To provide a safe environment for buying and selling goods, to be sure that they can get in touch with someone in case of difficulty, they need an independent way to verify your identity -- something more than an email address. Credit card info is an efficient way to do that. And Yahoo ask for it when you submit an auction or when you want to enter the adult section of their site.

Amazon, likewise, provides no alternative -- you have to provide credit card information in order to register as a seller. And they automatically debit your card for posting fees (ten cents per item) and post-auction fees and also for the special services you choose to make your auctions more visible to buyers. "Checks or Amazon.com retail gift certificates cannot be used to pay transaction fees."

eBay has the same concerns, but provides alternatives. They explain that they need to verify that sellers are of a legal age and are serious about listing an item on eBay, and they also want to provide protection from irresponsible or fraudulent sellers. If you don't have a credit card, you can use "ID Verify" as an alternative. "ID Verify uses a third party to check the information you provide and verify that information for accuracy."

eBay also provides an alternative to credit cards for paying auction site fees. They will accepts check or money orders but paying that way involves lots of hassle and wasted time: "Check or money order payments: If you have a credit card on file but want to send a check or money order instead, it is necessary for you to monitor your account status and mail payment for the MONEY OWED OR GREATER 10 days prior to your Billing Cycle Date. Mailing your payment 10 days prior to your Billing Cycle Date will allow for enough time to process your payment before your next invoice is calculated (invoices are calculated at the end of day on your Billing Cycle Date). Please keep in mind that any money owed at the time your invoice is calculated will result in a charge to your credit card on file."

So while you have choices -- at least at eBay -- you're much better off just using your credit card, just as you do for so many other kinds of payments. 


This article and hundreds of related items by Richard is available, in plain text, on CD ROM My Internet: a Personal View of Internet Business Opportunities (B&R Samizdat Express, 2002) for $29. That same CD also includes the full text of his books The Social Web, Take Charge of Your Web Site, Shop Online the Lazy Way, and The Way of the Web. It is available from Amazon and from our online store http://store.yahoo.com/samizdat, where you can buy an entire library for the price of a book.

Other auction articles by Richard Seltzer

Can we help you build an Internet business? Richard Seltzer is an independent Internet writer/speaker/consultant. Click here for details. or send email to seltzer@samizdat.com

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