Amazing Deals and Scary Risks of Peer-to-Peer Online Shopping

Since its birth 15 years ago, peer-to-peer online shopping—buyingand selling among fellow Internet users—continues to be a great way to findrare items and good deals.

Jim Buckmaster, chief executive ofCraigslist.org, says usage is growing by 50% a year. The most popular items on Craigslist’shuge marketplace are home furnishings and cars. Ebay.com, the granddaddy ofpeer-to-peer shopping, has been going strong since Labor Day of 1995. Just thisyear, Facebook.com joined the fun with Facebook Marketplace.

Sure, there are bad seeds. Earlierthis summer, a joker from Tennessee posted on Craigslist a “slightly used”time-travel device for “only” $300. But a little common sense goes a long way.Most of what’s for sale is genuine. If you understand how to use these channelsand take proper precautions, you can scoop up terrific deals. After all, someoneelse’s trash may be your treasure.

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You (hope to) getwhat you see

You’re at the mercy of any online seller’s effort to writehonest descriptions of his or her products. Jim “Griff” Griffin, marketplaceexpert at eBay, says it’s always wise to contact the seller with any questions.You can request specifics, such as the dimensions of an object, or for more(and perhaps current) pictures. On eBay, you click on “Ask a question” to senda message to the seller, which gets there through his or her eBay account. Aserious seller will be happy to hear from all interested parties and reply promptlyand candidly.

StubHub.com, a site for buying andselling tickets for sporting events, concerts and the like, guaranteeseverything sold on the site. StubHub requires sellers to register with a validcredit card, so they’re on the hook if they try to pass fraudulent tickets. Forthat level of security, you’ll pay a 10% fee for each purchase—but you won’tdecry it if you score last-minute tickets to a sold-out U2 concert.

Pay it Safe

Unless you’ve found something for free, you’ll have to decidethe safest way to pay your peer. This largely rests on the type of payments theseller will accept.

If you’re asked to pay using credit,consider a single-use card number. Several banks offer one-time-use credit-cardnumbers so you can make a transaction without giving out your personal card number.

EBay owns PayPal, a service for transferringmoney online, but PayPal isn’t just for eBay sales (though all eBay merchantsaccept it). Many sellers on Etsy.com – a marketplace for handmade goods such asclothing, crafts, décor, accessories and so on – accept PayPal payments or credit cards. If you’re using aPayPal account, you can try the new Security Key ($5), which does for a PayPal accountwhat a one-time credit-card number does for your credit account. The key isabout the size of a credit card and has a screen that displays your accountnumber, which changes periodically. It’s synced with your account, so only you knowthe current magic number. Or you can establish a mobile account and have the codessent to your cell phone at your request.

With Craigslist, through which you’relikely to pick up your merchandise in person, you’re best off paying cash orwriting a check. Always avoid wiring money to anyone or paying by credit card intoan online escrow account. Those are red flags signaling a rip-off.

The man behind the curtain

When you buy from peer-to-peer sites, you are doing businesswith strangers. Usually, there’s no store or company whose reputation suffersif the transaction goes bad. The seller’s standing lies in his or her customerrating and comments from previous customers. If the site you are using providesfeedback or user profiles, those can help you judge the seller’s integrity.Blunt remarks such as “never received my purchase” are obviously not a goodsign.

Craigslist encourages all businessto take place locally, which is why the site is broken up by cities or metropolitanareas. Freecycle.org is also separated into city-specific sites, though nomoney changes hands. You’ll be contacting gifters,not sellers. The local nature of the site creates a strong communityfeeling for Freecycle users, says the site’s executive director, Deron Beal. Thatcuts down on funny business.

The switch

After you agree on a purchase, it’s time to transfer the goods. In a Freecycle or Craigslist deal, you’ll probably pick them up yourself. One of Buckmaster’s cardinal rules: Meet in a public place. If you’re going to retrieve an item from the seller’s house, ask for it to be left in the yard or on the porch, and out of sight if possible.

When a transaction is not local, discuss who pays the shipping charges before you buy and establish a shipping date. Don’t pay more than you have to. Check the rates with the U.S. Postal Service site. Ask the seller for a tracking number so you can watch the progress. The same holds if the shipper is UPS, FedEx or another private carrier.

Reporting problems

Each peer-to-peer site has a system for dealing with problems, complaints, and scams. So if you come across a posting that seems fishy, tell the site’s administrators. All sites have an e-mail address for reporting or flagging suspicious posts.

A common scam involves a crook asking a buyer to complete a transaction away from where the post originated. When you go off the site, you leave behind any safeguards or guarantees. By paying with your PayPal account, an eBay purchase is covered, but you’ll have to keep an eye on the calendar and report any problems within 45 days of payment. The same principle goes for all other sites: Be vigilant and report problems as soon as they arise.