At first blush, shredders seem like overkill for the average business. A defense contractor or lawyer might need to destroy documents, but no one wants to go through your company's trash, right?

Don't be so sure. While you certainly never would be caught dumpster-diving, your rivals just might relish the chance to get a peek at your strategic memos, financial statements, tax returns, and other confidential documents. John P. Perozzi, president of Basic Services in Norcross, Ga., remembers gaining a new customer for his paper shredders after an insurance company manager caught an ex-employee going through the garbage bin, hoping to find client leads for his new job at a rival. ''It happens more often than people want to admit,'' Perozzi says. The problem is hardly limited to trash at the curb: The American Society for Industrial Security figures that 70% of information theft is committed by insiders, such as temporary and contract workers, disgruntled employees, and people moving to other companies.

That's why sales of shredders are topping $280 million a year. Costing from as little as $30 to well over $10,000, these machines can chomp a sheet of paper into anywhere from 30 to 7,000 pieces. Which machine you pick depends on just how nervous you are and how much shredding you plan to do.

Shredders come in two basic types. Strip-cut shredders work like a pasta machine, turning sheets of paper into 30 to 100 spaghetti-like strips per sheet. Cross-cut shredders take the added step of cutting those strips along their widths, resulting in about 10 times the number of confetti-size pieces. Still another kind of high-security shredder cuts the sheets into even smaller bits. Unless you are destroying information on ufo coverups or working with the government on classified proj-ects, you can probably skip this last version, which starts at $2,000.

For security, cross-cutting is clearly superior to strip-cutting. ''When you put something through it, that's it,'' notes Barry E. Marsh, security manager at Bell Helicopter/Textron, based in Fort Worth. ''No one's going to be able to piece it together and read it.'' Some strip-cut users get around that issue by mixing the remnants of each page with hundreds of other shredded sheets, which should deter all but the most diligent snoop. In fact, Gyrus Systems is confident enough to use its mixed shreds to line boxes when shipping software, instead of employing Styrofoam packing material. ''Those peanuts get kind of expensive,'' says Suzanne A. Eubank, office manager for the training management software publisher, based in Richmond, Va.

After security, you need to consider capacity--how many pages the shredder can accept at once. According to dealers we interviewed, the manufacturers' claims should be taken with a grain of salt. ''The speedometer on a car goes to 120 miles an hour, but you don't ever take it there,'' says Bear Brakhage, sales manager for Denver-based Paper Processing Solutions. Similarly, he says, a shredder might claim it will cut 15 to 18 sheets per pass, but if you do that continuously, the machine is likely to break down in short order.

So what's the best blend of price, security, and capacity? We tested three low-end models from three leading manufacturers and analyzed eight top-of-the-line deskside models from the top four manufacturers. If your business intends to use a shredder only occasionally, and you're not dealing with state secrets, a model costing less than $100 will suffice. All the models we tried came with their own plastic bins to hold the shreds, a paper sensor that automatically activates the shredder when a sheet is fed into its mouth, and a narrow opening that helps prevent stray fingers from getting caught in the blades.

Of those, the Royal Orca Micro won on all counts. At $49.95, it was the least expensive model we tested, despite its use of the typically more expensive cross-cut shredding. It took just three seconds to reduce two stapled pieces of paper to a palmful of confetti--staples included. Drawbacks included the 4 1/4-inch throat, an inconvenience that requires most sheets to be folded before they can be shredded, and an inability to chew through paper clips.

STOP AND GO. Other low-end models claimed much higher capacity, but the reality proved different. The gbc Shredmaster 55x boasts on its box that it can shred three to five pages at a time, but its brochure reports a two-to-three-sheet capacity. The latter is more realistic; with four sheets, the shredder stopped midway and needed us to coax it the rest of the way by flipping repeatedly between the reverse and forward settings. Similarly, the Fellowes ps55 slowed considerably when we fed it the maximum five sheets it purportedly can handle; three is more on the mark.

Do you regularly shred marketing plans, client information, internal memos, and sales leads? You'll need something more powerful. Most businesses should be happy with the Intimus 300 strip-cut shredder. It produces strips just 1/8 in. wide, not bad compared with the 3/32-in. to 1/4-in. pieces made by the other shredders. More important, the Intimus features a hefty 0.6 horsepower motor, which means it can munch up to 15 sheets at a time and hack through paper clips and staples. Although the Intimus 300 sports a hefty price tag of $949, dealers say that discounts of 20% to 30% are common.

For absolute security--and if you want to shred the occasional presentation transparency--check out the $999 mbm Destroyit 2400 c/c. This cross-cut model produces twice as much confetti as its closest rival by slicing and dicing documents down to 3/32 in. by 5/8 in. It also features mobile casters, which makes it easier to move from room to room. The primary drawback is its smallish, six-sheet capacity, and transparency shredding should be kept to a minimum. Not only is a transparency more difficult to shred, but if the shredder's motor has been working steadily, the heat generated could melt the plastic and ruin the unit.

No matter which model you buy, keep in mind that shredders aren't very picky eaters. H. Kim Jones, owner of Capital Shredder Corp. in Rockville, Md., remembers demonstrating a unit in a lawyer's office when his tie got caught in the shredder's mouth. ''Next thing I knew, my nose was bouncing against the shredder, and the lawyer was just cracking up,'' says Jones, who notes: ''I lost a tie, but gained a sale.'' Sounds like a valuable trade secret. Commit it to memory, then shred this article.

By Mie-Yun Lee, editorial director of BuyersZone (www.buyerszone.com), in Boston

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