WASHINGTON, DC, Dec. 26, 1998 -- Consumer protection agencies nationwide are keeping a careful eye on how well Internet-based merchants handle the thousands of post-holiday returns.

Sharper Image, Eddie Bauer, SkyMall and other online stores reported sales increases of 500% or more this holiday season.  The big question now is what happens to customers looking for returns or exchanges.

While business analysts warn that customers may not come back to the Internet if they have a bad experience the first time, that's not much consolation to an individual consumer seeking satisfaction.

Local and state consumer protection officials are quick to point out that they have jurisdiction only over Web merchants who are based in their locality.  While federal legislation has been discussed, standard mail order and fraud charges are all that currently apply to Web commerce.

In general, most Web merchants offer the same return and exchange terms as mail-order, telephone or catalog stores -- i.e., merchandise must be returned in the original carton, usually within one to two months.

A big question is who pays the shipping charges.  In almost all cases, it's up to the consumer to get the item back to the seller.  Only if an item was damaged in transit will the shipper or the delivery company pick up the charges.

Nationwide, 1998 complaints about Internet transactions were up 26% from the year before, according to Wendy Weinberg of the National Association of Consumer Agency Administrators.