Kasey Wehrum
06/01/2004
For even an astute collector, acquiring antiques and collectibles entails a certain risk. Buy them over the Internet, and that risk increases. More than $200 million was lost to online fraud last year, according to the Federal Trade Commission, which received more than 80,000 complaints about online auctions in 2003, a 130-percent surge in two years.
In an effort to make digital marketplaces more secure for buyers and more profitable for sellers, one company has begun certifying qualified merchants and guaranteeing their transactions with surety bonds. The Alexandria, Va.-based company buySAFE, founded two years ago, reviews a seller’s past performance, financial stability, experience and history to determine whether or not it is eligible for certification. Those that are have their transactions guaranteed for up to $10,000, backed by bonds issued by The Hartford Financial Services Group. Beyond providing security for buyers, the service also benefits sellers by guaranteeing their credibility, which often translates into higher bid prices.
“Trust is a fundamental problem in the world of e-commerce,” says Jeffrey Grass, CEO of buySAFE. “The Internet is a great place to buy lower-end items, but as prices go up, so does the risk. People are willing to take a chance for a $20 piece, but not for a $5,000 piece.”
If a dispute arises between a buySAFE-bonded seller and a buyer, the company initiates a transaction resolution process. The first step is a mediated digital discussion between the two parties. If mediation fails, the buyer can submit a claim to The Hartford, which thoroughly investigates the issue. If the claim proves valid, and seller default is verified, the buyer is compensated up to the full purchase price of the item in question.
Fraud fears are not the
only issue worrying buyers, especially in the world of antiques and
collectibles. For years, buyers have been able to open escrow accounts on eBay
while vetting their purchases, observes Reyne Haines, the owner of Reyne Gallery
and an appraiser for the PBS series Antiques Roadshow. “So I don’t think fraud
is the only concern for buyers,” she says. “Collectors will always be hesitant
when they cannot physically touch and inspect an item.”
Haines, an expert in
Art Nouveau glass, stresses the importance of researching the background of an
online seller before committing to a sale. A seller’s “about me” page is a good
first stop for inquisitive buyers. Haynes says buyers should review a seller’s
past transactions, any articles he might have published on the subject, as well
as the seller’s reputation among other members of the collecting community. “If
a seller’s past sales have all been TVs and blenders, I would be suspicious if
it began selling Tiffany vases out of the blue,” she quips. Additionally, a true
expert in a given field will know the importance of describing every detail of a
piece, including restorations and imperfections. “Little things make a big
difference in the overall value of a piece,” Haines adds.
But digital
guidelines and clearinghouses for online collectors remain rare, since the vast
majority of the more than $54.9 billion spent on e-commerce last year went
toward consumer purchases. “Collectibles and antiques are in a different
category,” says Ina Steiner, publisher of AuctionBytes.com, a guide to
online auctions. “Part of the culture of collecting involves spending a day
going to the auction houses and inspecting and handling the items. That doesn’t
really merge with the world of online auctions.”
Not yet, but Internet
auctions are gaining ground, and a collector who eschews the Web risks missing
out. There is good news: new digital cameras and streaming multimedia are
providing greatly enhanced images, real-time technology allows streamlined
communication between buyers and sellers and initiatives like buySAFE are making
the payment process more secure.