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What Does An Escrow Service Do And How Can It Protect You

By Maria Stone


People of all ages have discovered how convenient and fast it is to click to select goods, add them to a cart, and pay for them at checkout, all without leaving their favorite armchairs. Most of these consumers are also very concerned about security and legitimacy. The best way to ensure the purchaser gets her merchandise and the retailer gets paid is to make use of an escrow service.

The idea of keeping funds in escrow is nothing new. Real estate commissions have required Realtors to put earnest money in trust accounts for many years. When you purchase real property you have to put a down payment on it. Those funds are held in a special account until you get ready to close. At the closing, the money is applied to the total purchase price. When you buy merchandise online, you probably assume you are paying the retailer directly. In many cases, your money goes into a third party trust account.

The companies that provide these services will first verify that your money is available. Once that is done, they contact the seller to let them know the merchandise can be released. When the buyer receives the merchandise she may inspect it and then accept it. It is not until that point that the money is released to the retailer.

Most of these companies offer additional services. If you are purchasing a high ticket item like a vehicle, in addition to holding the funds, they will assist with any liens, shipping documentation, and title issues. In the case of the sale of jewelry, which is a favorite of online scammers, using an escrow company keeps the money out of the hands of the seller until the buyer has received the item and had an opportunity to verify its authenticity.

You have to be very careful buying certain items, like guns, online. You want to feel confident that your money is safe and the package is tracked until it gets into your hands. Even when purchases are small in amount, consumers want to know they are going to receive what they ordered. When customers have issues with their transactions, they give bad reviews, and sellers lose business.

Using one of these services has a lot of benefits for buyers. As soon as they purchase something, they know their money is being held by a third party instead of going directly to the seller. The service keeps track of the merchandise while it is in in route. You have a chance to inspect the item, verify that is it what you bought, and accept it. The retailer doesn't get paid until you give your approval.

The service has a lot of advantages for sellers as well. They don't release the merchandise until funds actually get into escrow. That way the retailer doesn't have to worry about charge backs. They know the funds are being held until receipt by the purchaser. When the seller accepts the merchandise, and the funds are released, the transaction is complete.

Buying merchandise online is a huge convenience. It's also a great way for sellers to move their product. With a third party holding the funds, everyone is assured of a successful transaction.




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