In the movie The Graduate, Dustin Hoffman's character is given just one firm word of advice about his future: “Plastics.” Many experienced auction veterans give one firm word of advice to new auction sellers: “PayPal.”

PayPal lets buyers pay for winning bids with major credit cards or debit cards. Then PayPal transfers the money into the sellers' accounts (taking a small fee for its services). Many sellers on eBay and other auction sites now use PayPal exclusively and try to discourage other means of payment.

Of course, many auction buyers do not have credit cards or debit cards, and many other bidders are not comfortable with sending financial information over the Internet. To attract the most bidders for your first auctions, you may want to consider accepting money orders, cashier's checks, or personal checks. But you must take special care when handling these forms of payment.

If you agree to accept personal checks, for example, remember that you must not ship an item to a buyer until his check has cleared at the bank. Also, get verification of a money order or cashier's check before shipping an item. Some auction sellers have been victimized with counterfeit money orders and cashier's checks. Even banks sometimes have difficulty verifying that a cashier's check or money order is good. (See Chapters 8 and 17 for more information.)