Wire payments - are they safe?

Safe payment methods that are offered by suppliers and wholesalers include:

1. Credit Card: One of the most recommended methods, especially on first trades and for sample orders, as most credit card companies are able to complete a chargeback if they or you believe there has been fraudulent activity on the card.

2. PayPal: Another highly recommended payment method. PayPal verify member's addresses and banking information when they join. Members are also required to have a credit card listed on their account. These stringent regulations make it almost impossible for would-be scammers to carry out fraudulent activity. However, we advise caution when using suppliers whose PayPal status is unverified, as this means they have not gone through the above process. As a rule of thumb, check with PayPal to confirm that the supplier is a verified member before you trade. However, most of the time this information will be stated when you are going through the payment process.
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3. Escrow.com: A safe third party option that holds money in a trust account until the buyer receives the goods. Once goods have been cleared by the buyer, the money is released to the seller. Note that you should only use Escrow.com and no other services advertising as 'escrow'.
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4. Letter of Credit (LC): This is similar to an escrow service except your bank is the third party. How does this work? You go to your local bank and request a letter of credit for the amount you are wishing to send to the seller. Usually you will need the Pro Forma invoice to do this. The bank will hold this cash in your bank account and issue a letter to you and the seller's bank verifying that they are holding the money. When delivery of goods to you is confirmed, the bank will transfer the funds to the seller's bank account.

5. Cash on Delivery (COD): You pay the freight or delivery company directly when the goods are delivered to you. The freight company then gives the funds directly to the seller. Please note that the shipping company will not leave the goods with you unless you pay them at time of delivery.

Payment Methods that are NOT recommend by SaleHoo:

We do not recommend using the following payment methods unless you have had prior dealings with the supplier or wholesaler and everything went smoothly. These methods offer very little security for the buyer and are almost impossible to trace in the event of a fraudulent transaction. If you must use these methods, please be cautious and consider reducing the size of your order to minimize the risk.

Western Union: We do not recommend using this method of payment unless you have had successful prior dealings with a supplier. There is NO security for the sender using Western Union and you are also required to pay fees to send the money. Western Union itself issues this warning: "Make sure you know to whom you are sending money. If you are purchasing goods or services and paying through the Western Union network, it is your responsibility to verify the reputation and legitimacy of the seller. Western Union is not responsible for the non-receipt or quality of any goods or services."

Telegraphic Transfer/ Wire Transfer (TT): This is an interesting method of payment that can float between being a good option and a bad one! To start with, it has no safety benefit or security for the buyer. Once the money is wired into another bank account it is VERY hard to get it back. In saying that, this is often the only payment method larger manufacturers will accept - otherwise the risk of fraudulent charge backs (etc) is too great. Sometimes they may ask for a 10-20% deposit through bank wire, with the rest of the money payable on delivery of the goods. Common sense is paramount when using this method. To stay safe, spend time checking out the supplier's company, request some references and only place a small order at first.