www.Going-going-gone!(online auctions - test)(Buyers Guide)(Industry Overview)

Has there ever been a more potent marriage between technology and shopping than the phenomenal rise of online auctions? Tapping the Internet's global reach and ability to connect buyer and seller instantaneously, auction web sites--from niche players that specialize in Beanie Babies to megaemporiums like Amazon.com and eBay--can help you locate more hard-to-find merchandise in a few minutes at your computer keyboard than you could in a lifetime of hopping from flea market to garage sale.

Market leader eBay, which got its start selling Pez dispensers just five years ago, now has more than 22 million registered users, lists some 5 million items for sale daily, and rang up $5 billion in revenues in 2000. Mass merchandiser J.C. Penney and specialty-gift retailer The Sharper Image have climbed aboard the online-auction bandwagon. Even the venerable auction house Sotheby's has opened some of its sales to online bidding. By 2003, the e-commerce trackers at Forrester Research forecast, total online-auction revenues will jump to nearly $20 billion.

Yet for all the hoopla, the fraud and misrepresentation that plague real-world auctions are common in the online salons. According to the Federal Trade Commission, the number of fraud complaints has soared from around 100 in 1997 to nearly 11,000 last year. The National Consumers League, a nonprofit watchdog group that independently logs online-auction abuses, reports that the most common problem plaguing this new shopping medium is that buyers fail to receive items they bought and paid for, with an average loss of $326 per botched transaction.

The nonstop auction action is also taking a human toll. According to the Center for On-Line Addiction, an organization that counsels people with compulsive disorders related to Internet overexposure, some 15 percent of clients seeking treatment are online-auction junkies.

All the same, online auctions can offer savvy consumers an exciting and satisfying shopping experience. To give you the upper hand if you venture into the virtual auction room, we evaluated 12 popular sites. (See how they rate on page 13.) In the process, we tracked dozens of auctions and analyzed bidding behavior, and we explored how different types of auctions work. (See "Doing Your Bidding," page 14.) We also elicited tips from nearly 200 seasoned auction fans who visited our web site at www.ConsumerReports.org. (Perspectives gleaned from some of them are scattered throughout this report.) Finally, if you want to try your hand at buying or selling through an online-auction house, check out "Where to Turn for Help" on page 15 for our guide to useful resources.

Here's what you can do to make the most of online auctions.

SIZE UP THE SELLER