Online auctions can offer reduced prices, but they may not give you the same consumer rights that you have when you buy from a business in person or online.
Before participating in an online auction it’s important to read the terms and conditions and understand all procedures and costs.
The following types of auctions are typically available online:
Marketplace online auctions - these are a popular way of buying, with a well-known example being eBay. In these ‘virtual’ markets, a business sets up the website and provides a set of rules and guidelines, but it is mostly left to the individual buyers and sellers to deal directly with each other. In these types of auctions, the business running the website may not be directly involved in the auction process and may not be an agent for the seller.
Traditional auctions - this is where the auctioneer acts on behalf of the seller of the goods and instead of interested buyers gathering together in person, an online auction house uses a website to create a virtual auction. In this type of auction, the auctioneer may be an agent for the seller.
Auctions conducted by businesses - this is where the business running the website offers their own products for sale by an auction process.
You can make a complaint and ask for a refund under the Australian Consumer Law if an Australian business selling through online auction, sold you a product that:
- misled you about features of the product or hid costs or other details from you
- was stolen, did not belong to the business or individual or came with outstanding debts, charges or restrictions the business didn’t tell you about beforehand
- was faulty or does not do what it is supposed to (but this does not apply to traditional auctions).
It may be more difficult to resolve a dispute with an overseas business selling through online auction. While you can report problems to the auction website, usually disputes are between the seller and the buyer, as the website is not involved in the actual sales process except in the case of traditional auctions or where the auction website is offering its own products for sale.
Some auction sites give you an option to buy now without having to bid. If you choose to buy immediately you will have all your usual shopping rights, unless the seller is a private individual and it is a one-off sale.
A ‘before’ price is the price an item was sold for during a reasonable period immediately before a sale.
Businesses often advertise products in several places at once, including in-store, their own website and third party platforms such as eBay. Prices may fluctuate in line with sales or promotions.
Third party platforms such as eBay may also offer their own discounted promotions, for example, 10% off everything.
If a third-party sale starts shortly after a business-led sale has finished (for example, a few days later), it may look like the business has inflated its ‘before’ price immediately before a sale. However, it may just be that the price has returned to a non-discounted price following a business-led sale.
Follow these tips for safe and wise use of online auction sites.
- Before you start, ensure your computer, tablet or phone has up-to-date security and anti-virus software installed.
- Check out the reputation of the site and the seller by reading feedback provided on the site and on other online forums.
- Never agree to do business privately outside of the online auction site, for example directly by email, as this could be a scam.
- Shop around before buying to make sure you’re getting a good deal. Find out everything about the item–ask questions and ask for extra pictures and descriptions.
- Only pay using a secure system–this is shown through a padlock symbol and web address starting with https://
- Consider using a reputable third-party escrow agent to hold payments for valuable items until you’ve received and accepted the item.
- In case of a later dispute, keep copies of all documents including electronic records of all bids, item descriptions, photographs, advertisements, emails and receipts.
- If you have a problem, contact the seller first and explain the issue and how you would like it resolved. Many sellers want to resolve the problem quickly to avoid negative feedback.