Everybody has heard tales of fraud being conducted on the eBay auction site, and you may have even been a victim of fraud yourself. This does not mean that it is not safe to do business on eBay. The majority of eBay sellers are honest, but it is always a good idea to protect yourself from the minority that scam on eBay.
Instructions:
1) Download and use the eBay toolbar with account guard. This is available on the eBay website. Fake emails, known as spoofs, are often sent to people who use eBay. These spoof emails will direct you to websites that are not owned by eBay in an attempt to get your eBay log in and credit card information. The eBay toolbar has a feature that will tell you if you are on a legitimate eBay site or a potential spoof site and help you to keep your information safe.
2) Protect your account password. Never share you password with other people. Create a more secure password by using a combination of letters and numbers. Change your account password on a regular basis.
3) Review the feedback of any seller that you are considering buying from on eBay. Looking at the number of positive, negative and neutral feedback left as well as reading comments left by other eBay customers will give you a good idea of the seller's reputation with the eBay community.
4) Read the description of the item carefully, look at all pictures and ask any questions you might have of the seller prior to placing your bid. It is also a good idea to check shipping costs and familiarize yourself with the seller's return policy to avoid unpleasant surprises.
5) Complete all transactions through eBay. Be careful of sellers that offer to sell you an item outside of eBay. Request the seller put the item up on eBay and allow you to purchase it with a "Buy It Now" option.
6) Pay for your purchase using PayPal so you will be covered by PayPal's buyer protection program if something does go wrong during the transaction.
Source - eHow