Legit or Scam? Online Escrow Services (2024)

July 22, 2024

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Buying and receiving physical products, digital items, and services from established businesses like Amazon is straightforward. However, e-commerce can get tricky and potentially fraudulent when someone must transact directly with a stranger. The more money involved in the transaction, the higher the risk to the buyer since the buyer typically must initiate the transfer process with payment. Additionally, schemers and bad actors surf the net looking for people to scam. Although I’ve never been scammed, millions of internet fraud cases occur annually.

One way to ensure your online transaction is successful is through an escrow service. An escrow is a financial arrangement in which a third party holds and regulates the payment of funds required for two parties involved in a given transaction. It helps make transactions more secure by keeping the money in a neutral account. Funds are released when all the terms of an agreement are met. Many years ago, eBay, an online auction marketplace, partnered with to offer escrow services and reduce fraudulent activities. Overview was founded in 1999 and is owned by Freelancer, an online freelancer marketplace.’s services help to safeguard transactions by withholding funds from a seller until the buyer receives and approves the goods. While traditional escrow services can be costly and typically involve bankers and lawyers, Escrow provides services at affordable rates. handles purchases involving web domains, motor vehicles, contracted services, milestone transactions, jewelry, antiques, electronics, collectibles, and general merchandise. Parties are required to verify themselves before transacting. partners with Shopify to sell existing stores and uses web hosting companies like GoDaddy to transfer domains. It also offers a WooCommerce plugin for online businesses that need escrow services. Users can add buttons and links to direct buyers to Escrow.

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How does Escrow Work? collects, holds, and distributes funds when buyers and sellers are satisfied with their dealings. Transactions are processed in five steps:

  1. Buyers and sellers must create accounts on and agree to the terms of their arrangements. Either party can begin the sales process.
  2. The buyer pays Escrow, Escrow verifies the payment, and the seller is notified that funds have been secured. Payment options include wire transfers, credit cards, money orders, and PayPal.
  3. The seller ships/transfers the item to the buyer, and the buyer confirms delivery.
  4. The buyer has a set number of days to inspect the item and can accept or reject it.
  5. Upon the buyer’s acceptance, Escrow releases the money to the seller. If the buyer rejects the item, the process reverses until the seller is back in possession of his goods. Fees

The best way to estimate a transaction’s cost is to use Escrow’s fee calculator. Fees are listed in US dollars and euros and differ depending on the transaction amount. For example, a sale for $25,000+ will start at 0.89%. Fees Review

A few months ago, I was in negotiations to buy a website. The deal fell through when the seller and I couldn’t agree on who should proceed first. Naturally, neither of us didn’t want to be cheated. A few weeks later, I found another site to buy. After agreeing on a price, I recommended using Escrow to process our transaction.

Step One: I created an account and clicked “Start a New Transaction” and “Buy.” I selected the type of transaction and the buyer’s role. I entered a transaction title, the seller’s email address, phone number, and other standard details. I split the cost 50/50 with the seller, but you may want to discuss that before proceeding. Escrow’s “Concierge Service” helps transfer domains, but I didn’t use it.

Step Two: I paid Escrow via PayPal and emailed the seller to notify him the transaction had begun.

Step Three: The seller accepted the terms and initiated the domain transfer.

Step Four: I confirmed and accepted the transfer a few days later. There was nothing to inspect, which benefits physical objects like boats, toys, and electronics.

Step Five: The seller collected his funds, completing our transaction. Transaction


Some reviewers have complained about using Escrow, but my experience was trouble-free, quick, and efficient. I can’t speak to transactions involving physical merchandise, but for domains and digital products, Escrow is an excellent option. I will use them to sell domains instead of brokers like Sedo and Afternic, who do very little and charge a lot.

Chad Tennant
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