Escrow services are making online transactions, especially those that are done through auctions, newsgroups, and online message boards or classifieds sites, a less fearful leap for many.
How do they work?
Escrow services act as a buffer or middleperson between the buyer and seller to make sure both follow through as promised based on the terms of the sale. Let's say you're the buyer, and let's walk through the steps:
- You buy an item off someone through an auction site, for example.
- You pay the escrow service for the cost of the item plus any additional costs, such as shipping or insurance.
- The escrow service notifies the seller of your payment so that the seller can send you the item(s).
- You then have a fixed "inspection period," which is at least one business day. This allows you to check out and/or try the item to make sure the condition that was promised is how it is delivered.
- You are then required to let the escrow service know that you accept or decline the item. If you do not respond within the designated amount of time, the escrow services assumes the item is accepted.
- If the item is accepted, payment is then made to the seller.
- If the item is declined, the buyer is only refunded costs that were agreed to as refundable. Shipping and insurance on the shipping are examples of costs that are most likely not refundable. You are then responsible to ship the item back to the seller within a certain time period. If you don't, the escrow service will pay the seller for the item.
What are the advantages?
The two main advantages would be the variety of accepted payment methods and the feeling of security that inspection period gives.
i-Escrow, the service with the nicest site, most features, and is recommended by eBay(TM), accepts almost every payment method known to modern humans. These currently include MasterCard, Visa, American Express, Novus/Discover, Diners Club, and Carte Blanche, which can be used via their secure server. If you don't feel comfortable sending credit card information over the Internet, you can fax them their credit card payment form, or you can also pay by cashiers check, money orders, personal and business checks. You can even bank wire your money to i-Escrow, but they don't want to pay for your bank wire fees. Make sure you or the other party in this sale covers those if you choose bank wiring.
