Kazutoshi Kitazawa, a 37-year-old university professor, has been bidding and selling in online auctions for two years. When he feels like upgrading his computer, he browses through Yahoo! Japan’s auction Web site to buy memory cards and other computer components at bargain prices. When he decides the time has come to replace his PC with a new model, Kitazawa sells the old one online.
“As a buyer, I’ve picked up real bargains. As a seller, profits are much higher than when I sell stuff at secondhand shops,” says Kitazawa. “But what is really nice about online auctions is that everybody appreciates the transactions. It’s nice to feel that you are helping somebody.”
In Japan, buying and selling in online auctions is no longer just a hobby pursued by a small minority of Net-heads. Yahoo! Auction, Japan’s online auctioneer giant, reported that the number of items offered for sale at its site jumped from 100,000 in 1999 to 2 million in 2000. Some 180,000 items are added to the site every day by more than 6 million members, resulting in millions of successful transactions.
You can purchase almost anything at Internet auction sites, from computers to school uniforms, insect specimens and even placenta extracts for cosmetic use.
While rarities such as antiques and items once owned by celebrities fetch high prices, more common items such as chopstick holders and freebies from fast-food restaurants are offered for several hundred yen. Unwanted items, such as correspondence-course textbooks and children’s toys found tucked away in the closet, sometimes bring surprisingly high prices.
“The reason online auctions have taken off in such a big way is because they offer a place where everybody can buy and sell, free from time and space limitations,” says Yahoo! Japan spokesman Masanori Satake. “Things of no use to one person can fulfill somebody else’s needs. It’s the perfect environment for people to engage in ideal economic activity.”
Along with the industry’s rapid growth, however, has come an increase in criminal activity. Pornography and other illicit materials often appear on the auction sites, while scam-artists ensnare bidders with seemingly attractive items like “tickets for sold-out concerts” and “the latest-model computers.”
The National Consumer Affairs Center of Japan has reported a boom in the number of complaints. The most common are from successful bidders who fail to receive the items they pay for. The number of auction-fraud cases filed with the National Police Agency jumped from 23 in 1999 to 53 in 2000.
And it’s not just those who deliberately set out to swindle others who cause trouble. Sellers who fail to fully describe items, leading to misunderstandings with buyers, and bidders who cancel deals “for no reason” are also the source of many complaints received by the center.
“In Net auctions, transactions totally depend on the consciences of participants,” says Ayako Shimizu of the consumer center. “The problem is that sellers often want to sell things with no real value but try to get as much money as possible. It is extremely difficult to find out who is honest and who is not. Anybody can get into trouble.”
Troubled auction bidders complain that auction-site managers are reluctant to act on cases brought to their attention, suggesting only that complainants file a report with police or talk with the other party. “Sites do nothing except remove illegal items off the Web,” says Akira Nakamura, who maintains a Web site devoted to helping people deal with Internet problems.
Some auction sites have introduced stricter member-identity confirmation systems and escrow services, which aim to make transactions safer by holding sellers’ goods until final payment has been made by buyers.
Yahoo! Auction, whose sites are regarded as the most unrestricted and thus criticized as hotbeds of illegal activity, recently announced that it will start to confirm members’ identity through credit cards and charge members a monthly fee of several hundred yen as early as March.
“We want to make the sites safer so that people can use our service without concern,” says spokesman Satake.
It remains to be seen whether these measures will really reduce the risk. For now, bidders’ only means of self-protection lies in checking previous buyers’ evaluations of sellers, using the auction’s feedback system. Although it is not a guarantee of safety, bidders can get at least some idea of what kind of person the seller is, Nakamura says. It’s also helpful to read the seller’s description of the item carefully and study the image accompanying the item, he adds.
After a deal is made, auctioneers should also confirm the identity of the seller and the buyer, Nakamura suggests. “Some sellers reveal nothing other than their address and bank account.”
But buyers who agree to pay for an item before they receive it should ask for the seller’s home phone number and call the seller before any money changes hands, he says. “If the seller refuses, just cancel the deal.”