MISSISSIPPI STATE -- Online auctions are one of the more popular Internet uses, but they do present a risk to those who take part.

In an online auction with major, reputable services, potential sellers complete the process necessary to register as a user and then post items for sale. Each sale has a description of the product, often with a photo, a closing date and usually a minimum required bid. Potential buyers also must register with the site and then can bid on the item. The highest bid wins.

Jan Lukens, personal finance specialist with the Mississippi State University Extension Service, said buyers should seriously consider security when bidding. Bids are legally binding, and the winning bidder is required to pay the bid amount.

"While buyers should always check the reputation of companies they do online business with, the consumer's responsibility is greater with online auctions," Lukens said. "Be careful when using these services which have dozens of sellers, some more reliable than others. Familiarize yourself with the rules and policies of the auction site before you participate."

Even before reading the legal fine print, Lukens recommended verifying the site's validity. Check the company's reputation through such organizations as the Better Business Bureau Online or the National Association of Attorneys General. Confirm the company's physical location.

"If a company only has a post office box address, it is easy for them to vanish," Lukens said. "Make sure there's proof that they're more than just a website."

After confirming that the site is legitimate, potential buyers still must protect themselves at the online auction. Many auction sites offer feedback where buyers and sellers rate each other after transactions. Lukens recommended always checking a sellers' feedback before bidding on an item. Be cautious if there is negative, or very little, feedback.

Before bidding, Lukens suggested contacting the seller by e-mail or telephone to confirm specifics such as how shipping will be paid, whether a credit card can be used, available warranties and a return policy if the item is defective.

Keep printed copies of everything. Print the web pages that indicate the seller's name and contact information. Print the page that describes the item purchased, and keep copies of any e-mail correspondence with the seller. Log all telephone conversations with the seller and note what was determined from each call.

"This information prepares you to resolve a problem if one arises with the transaction," Lukens said. "Sellers almost always require they have the money in hand before they ship their product. That leaves the buyer having spent their money but with no product to show for it yet."

Whenever possible, make online purchases with a credit card, Lukens said. Not only does this provide a clear record of the transaction, but it brings the issuing credit card company into the situation if there is a problem.

In a column published on the Internet, Mississippi Attorney General Mike Moore cautioned users about online auctions. While they resemble live auctions, the similarity ends at the point of sale when the winning bidder deals directly with the seller rather than an auction house.

"Verify the seller's identity," Moore said in the online document. "If you can't, consider this a red flag and avoid doing business with the seller."

Moore recommended paying by credit card when possible, or otherwise using an escrow agent or paying COD. Be cautious if the seller asks for a certified check or money order in payment.