Section 148. About Accepting Escrow Service Payments

148. About Accepting Escrow Service Payments


147 About Accepting Payments


149 About Problem Buyers

If you're selling a big-ticket item such as a vehicle or a piece of jewelry , the buyer might want to use an escrow service . An escrow service serves as a go-between between you and the buyer. It assures the buyer that he won't get burned because the seller is paid only after the goods are received and accepted by the buyer. The buyer pays the escrow service, and the escrow service in turn pays the seller after the item has been received and inspected by the buyer.


Escrow services A service that acts as a go-between in an auction, holding the buyer's money until he receives the items in good order.

It's clear why an escrow service is good for a buyer. But an escrow service is also good for sellers when selling a big-ticket item. It offers the following benefits for sellers:

  • It allows buyers to pay using a credit card Unless you've set up a special merchant account with a credit card company, buyers won't be able to pay you directly with a credit card. With escrow services, though, the buyer can pay the escrow service using a credit card, and the service in turn pays you. This convenience and assurance is important when big-ticket items are sold.


    You need to pay special attention to how you ship items when you're dealing with an escrow service. The services often have strict shipping guidelines, including how you have to package the goods and which shipping companies you're allowed to use. So, when packing your item and arranging for shipping, be sure you are following the rules of the particular escrow service being used.

  • It ensures that you won't have to deal with bad checks or other payment headaches Bad checks are a particular problem. If you're paid with a bad check, not only do you not get the money for the item you sold, but banks also often charge a fee for depositing a bad check. Because the escrow service tells you to send the goods only after it receives valid payment, you won't ever have to deal with bad checks.

  • It insures your goods when you ship You won't have to arrange for shipping insurance because the escrow service does that for you.

Several escrow services are available that you can use, but eBay has a relationship with that makes using that escrow service easy. Payment for using the service is steep, so use it only for big-ticket items. The minimum fee for a single-payment transaction is $22, and the fee varies according to the cost of the item and how the item is being paid for (see the following table).

Costs for Using

Purchase Price

Check/Money Order

Credit Card

Wire Transfer


$22 + 0.5%

$22 + 3%

$37 + 0.5%




$15 + 2%




$15 + 1.75%




$15 + 1.5%

* Credit card payments are not accepted for over $7,500.

If a buyer wants to use an escrow service, make sure that it's clear who's paying the extra amount for the escrow service. In general, buyers pay for extra services on auction sites, so try to get the buyer to pay the whole amount. However, if you want to get a buyer to use the service, you might have to pay for part or all of the fee.

Paying for an item through an escrow service is a simple process. The following is a step-by-step look at how an escrow service works:

The buyer and seller agree that payment will be made using an escrow service and agree who will bear the extra costs of the service.

The buyer pays the escrow service the final bidding price of the item, plus the escrow fee (if that was what was agreed to in step 1).

The escrow service tells the seller that it has received payment.

The seller ships the goods to the buyer.

The buyer receives the goods and tells the escrow service that the goods arrived and are what was promised .

The escrow service pays the seller. If the buyer and seller agreed that the seller would bear some or all of the extra escrow costs, the seller pays that money to the escrow service.

When You Should Use an Escrow Service

An escrow service helps make buying and selling at auctions more secure. But it does add costs to every transaction for which it's used. You shouldn't use escrow services for every transactionand, in fact, you shouldn't use escrow services for most transactions. When should you use an escrow service, and when shouldn't you? The following is a list of things you need to know:

  • Don't use escrow services for low-cost items, especially if the buyer has positive feedback Because of high escrow costs, using an escrow service for low-cost items doesn't make sense, especially if the bidder and seller both have positive track records.

  • If you and the buyer have dealt with each other in the past, you might not need to use an escrow service If you've done business with someone else on an auction site frequently, you probably won't need an escrow service when dealing with that person again. However, if it's a big-ticket item, you're still taking a chance if you don't use an escrow service.


An escrow service works well when an overseas buyer wants to pay you in his own currency. The buyer pays the escrow service, and the escrow service pays you in U.S. currency.

You sign up for an escrow service like you do for any other web serviceby providing basic information about yourself such as your name , address, and email address. Both buyers and sellers sign up the same way. After you establish an account, you fill out a form every time you want to have a new escrow transaction. The form includes information such as who will pay the escrow fee, who will pay for shipping, the item being sold, and other basic information. All communications are done through email with the escrow service.

Sams Teach Yourself Creating Web Pages All in One
Sams Teach Yourself Creating Web Pages All in One
ISBN: 0672326906
EAN: 2147483647
Year: 2006
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