New York--Steven Woda got burned on eBay.

Then, he got an idea.

Woda, who had a background in surety-bond underwriting, never received a handheld computer he bought through eBay, but wondered why there were few protections for online buyers. He wasn't alone.While the Internet has been around for years, a host of consumers are still wary about shopping online.

So Woda came up with buySAFE of Arlington, Va., which works with insurance firms Liberty Mutual, Travelers and ACE USA to bond or insure online purchases, giving customers a 30-day guarantee for the total amount of their order (up to $25,000).

When online shoppers go to pay for their Internet purchases, they can click on an option to pay a percent of the total sale to bond or insure their order. That means that if they don't get the order they will get a full refund with no questions asked. Some Internet merchants are opting to cover the cost of the bond.

“We asked consumers across the board what’s the greatest reason they don’t buy on the Internet and one-half of American households said it was fear of merchant non-performance,” said Travis Brown, general counsel at buySAFE, which has issued 14 million surety bonds. “Perception is a problem.”

But some retailers weren't sure if the bonding would take hold. Mark Harrill was skeptical when he started giving consumers the option to pay to guarantee orders from DVDplanet.com, where he serves as director of marketing. After all, why would anyone want to spend 3% of the total order to ensure their DVD made it in the mail?

But to Harrill’s surprise customers did opt to pay extra -- and it wasn’t just one or two.

“I didn’t expect anyone to do it,” said Harrill, the director of marketing at DVD Planet. “When we launched it, customers for thousands of orders paid the bonding.”

BuySAFE puts online merchants through a vigorous screening. Once OK’d, the retailer can post the buySAFE seal of approval and charge customers for bonding, which is typically 1% of the total sale. Some partners include Cartersfinejeweley.com, Glassparadise.com., 877myjuicer.com and Homeclick.com. But it’s not only small-fry retailers incorporating the buySAFE seal. Panasonic.com is also using the service.

According to market research firm Forrester Research, while online shopping is growing at a double-digit pace, much of the people are tech-savvy Web users who are old pros at Internet shopping. That means finding anything to bring in new users is vital to expanding the market.

 "Although they are 36% of the North American population, early adopters are 53% of online shoppers,” said analyst Sucharita Mulpuru, in a recent report looking at the characteristics of online shoppers.

For DVD Planet, just having the buySAFE seal has aided in increased sales in its auctions. According to Harrill, the company’s auction closing rates have increased 30% to 40%.

“The Internet has grown incredibly in the last ten years but there are still a lot of first time users,” said Harrill. “When they see a transaction bonded or insured, it gives them a higher degree of confidence buying from us rather than another seller.”