Online auctions have been growing in popularity, with hundreds of thousands of people going online daily to buy and sell items at sites including OnSale (Nasdaq:ONSL), eBay (Nasdaq:EBAY) and Yahoo! Auctions (Nasdaq:YHOO). Recent incidents of fraud that have plagued many auction sites and caused several government agencies to begin investigations have not affected the Auction Universe site, due in a large part to the introduction of Bid$afe in September 1998.

"We realized at an early stage in our development that the online auction format had the potential for widespread fraud," said Larry Schwartz, president and general manager of Auction Universe. "Bid$afe has helped keep Auction Universe virtually fraud-free. Because of the wide range of merchandise available on the site, we will now offer two Bid$afe programs and are able to give protection to all users who become members."

Bid$afe

The heart of the free Bid$afe program is Auction Universe's role as a secure intermediary. All payments for Bid$afe auction items go through Auction Universe, which charges the buyer's credit card and holds the funds until participants are satisfied with the exchange. Buyers no longer need to reveal checking account numbers or other private financial information directly to an unknown seller; and sellers don't need to wait for checks to clear. And Auction Universe has established a process for handling returns and resolving any issues. This service will now be available to members at no charge.

Bid$afe Gold

Bid$afe Gold is available for a $19.95 annual fee for buyers and sellers. It includes the security of a transaction intermediary as well as primary insurance that covers merchandise at any price point and is underwritten by Pacific Insurance Company, Ltd., a wholly owned subsidiary of Hartford Insurance Group and administered by Collectibles Insurance Agency. This unique policy, with $3,000 worth of primary coverage, is available exclusively to Bid$afe Gold members and covers all Auction Universe purchases and shipments, as well as collectibles property already owned by Bid$afe Gold members.

Additional insurance coverage is also available for Bid$afe Gold members at specially negotiated rates for items above $3,000. No other auction site has an insurance plan this comprehensive. Sellers of merchandise on Auction Universe who would like to list a Bid$afe auction must be Bid$afe Gold members.

"I use Bid$afe for all of my Auction Universe transactions because it gives credibility to both the buyers and the sellers and I know that the sale will go through properly," said Stephanie Winters of Georgia, an Auction Universe member who sells dozens of items online each month. "It's tremendously easy to do the sale with Bid$afe and it's going to be fantastic to open it up to more Auction Universe members. I've gotten burned on other sites and I know that won't happen with Bid$afe."

"Bid$afe is one of the reasons that Auction Universe is known as the site where quality traders go to buy and sell," added Schwartz. "We've been able to attract top sellers to the site because they know that transactions will be completed without hassle and buyers know they will receive the merchandise that they have purchased."

About Auction Universe

Auction Universe is a buying and selling network comprising www.auctionuniverse.com and a network of locally branded Websites of over 600 affiliated media companies. It uniquely provides consumers with a secure, information-rich, and entertaining buying experience. Auction Universe is a pioneer in developing e-commerce solutions for major media companies. It has introduced leading edge technology, different pricing models (online auctions as well as fixed pricing) and groundbreaking consumer protection programs, including Bid$afe TM, which is the first online insurance program to provide a money-back guarantee on all transactions. Auction Universe provides buyers with extensive information from many of America's leading specialty and collectibles experts. It is the only online marketplace with over 6,000 collecting categories. Auction Universe has operations in the US and UK.

Auction Universe is a Classified Ventures, L.L.C company. Based in Chicago, Classified Ventures was formed by eight leading media companies - Central Newspapers, Inc., Gannett Co., Inc., Knight Ridder, The McClatchy Company, The New York Times Company, The Times Mirror Company, Tribune Company and the Washington Post Company. It provides national and locally branded online services for e-commerce opportunities in the classified advertising marketplace that build upon the capabilities and local expertise of its national affiliate network. In addition to Auction Universe, Classified Ventures operates the national Apartments.com web site (www.apartments.com), the cars.com web site (www.cars.com), and NewHomeNetwork.com web site (www.newhomenetwork.com).

posted by neomax
 

"until both buyer and seller are satisfied"?? Seller doesn't have to wait for checks to clear? Heck, the seller is satisfied when the item is sold and he gets his dough. The buyer holds all the cards in bidsafe: Seller waits (and waits?...) til buyer notifies AU that he has received the item... Buyer decides whether or not he's happy (hey, now it becomes an approval sale!!)...

Buyer doesn't have to disclose his checking account number? Big deal, we disclose that to everyone else we send a check to, and you can't do anything with my number anyway.

Seems to me Bidsafe (BS for short) merely protects the buyer against unscrupulous sellers. It does very little for sellers.

IMHO.
 

I certainly wouldn't deny you your opinion:-) -- the customer is always right --but to suggest that it is all in the buyers favor is quite a misstatement.

First, within about ten minutes after an auction's end, you know if the bidder is a backout bidder or not because AU's nailed his credit card. The money is put into escrow. If the credit card is bad, there are no fees, no nothing as all expenses, save listing fees, are deducted from the sale amount. Shipping fees are also collected.

The first and most obvious benefit is the insurance coverage provided by the seller by Bid$afe. The annual $19.95 fee covers all packages up to $3,000 in value sent. If you send 100 packages in a year it would cost you at least $95.00 to insure via the USPS. These savings are easily three-times the cost of BidSafe.

Second, most buyers would rather have the item they buy sooner than later. With the regular auction scheme, there is the first two or three days firming up the deal with email. Then the check is in the mail and the seller might get it in two to four days.

One week gone. Now the seller will typically hold the check for five to ten days for clearence from the bank. Two and a half weeks.

The seller ships and again, the postal system -- private or public -- will take two to five days to make delivery.

Bottom line, for the buyer to get the item they paid for typically takes three weeks.

I've received items as quickly as the second day after auctions end using Bid$afe -- five or six is typical and none in which I was the buyer took ten days.

Third. It is a benefit to sellers for buyers to feel secure. I feel this is a significant benefit to seller's so I'll explain.

If a buyer feels insecure, do you think they'll bid top dollar?

The reality is that on other systems sellers typically have to lose money on numerous items when they first start selling because their low feedback fails to inspire the bidder. Few folks will give them a chance and bid on their items.

With Bid$afe, whether a seller is worthy or not is not an issue. The buyer is protected. After all, they can return an item that failed to meet the description of the seller.

Now, if you read across the way on the outlook, you'll see that feedback rating is no longer a good measure alone. Even eBay suggests people look further than the gross number.

We know this because of the frauds perpetrated by those who use feedback padding and other ruses to cheat buyers. They have hurt all sellers on eBay.

So now, for high dollar items, eBay strongly recommends that bidders demand the use of an escrow service.

Guess what? Bid$afe is an escrow service and it is free to buyers.

Sellers, well they pay about what they'd pay if they and their buyer split the cost of escrow but when you consider AU's lower overall fees, the cost of an average sale using Bid$afe is about the same as the non-escrow sale on eBay.

The reality is that feedback alone is not enough to make a buyer truely "secure.

The use of an escrow service makes AU the "Auction you can trust."

Another point. I don't know of any good seller on any system that refuses to refund a bidders' payment if they are dissatisfied with their goods.

With Bid$afe, the seller is guaranteed they will receive their goods back in the same condition as sent in the event the buyer wants a refund. If the item is returned broken in shipment, the seller gets his money from insurance.

If the buyer tries to defraud the seller -- a switcheroo for instance -- remember we hold escrow and we're no more likely to give it back in the case of fraud than would the seller.

You suggest that the seller is left waiting forever for the buyer to say they got the item. Actually you didn't read it all. If the buyer fails to acknowledge the receipt of the item, it is clearly written that they're failure to respond is taken as acceptance of the item.

I've seen some reports that suggest that the ability to take a credit card can increase sales dramatically. We're seeing that on our site as I speak. Would it be too much to suggest that by making it possible for mom and pop sellers to take credit cards, we have created a wonderful benefit for them?

BTW, IMHO Bid$afe is not BS, it's B$$$$!!!

neomax

That's why this one is edited.

neomax

[This message has been edited by neomax (edited March 14, 1999).]