How To Be Safe and Smart When Shopping Online
Don't forget to check the little details like guarantees, site security, shipping fees and returns when shopping online.
Why contend with the thundering herd at the mall when you can shop online dressed in your pajamas, coffee in hand?
You'll probably save on sales tax and you'll avoid endless, slow-moving lines at the post office when buying things for out-of-town friends or relatives.
Innovative retailers are blending the best of both online and traditional shopping into a "clicks-and-bricks" model. For big ticket items, many buyers like to check features and prices online, but want to see and touch the item before buying. For example, Dell Computer (DELL) pioneered the online sale of PCs and laptops, but now sells through Wal-Mart (WMT). Other shoppers like to review items such as books or CDs online and pick them up at Borders (BGP) or Barnes & Noble (BKS).
The growth rate for online shopping is expected to slow to about 9% a year by the end of the decade from about 25% a year in 2004. Still, online sales are expected to account for about 7% of overall retail sales by 2011 and as much as 40% of computer hardware and software.
The appeal: Online shopping is quick, easy and convenient. But unless you're dealing with a well-known and reputable company such as L.L. Bean, Amazon.com (AMZN) or a comparison-shopping Web site such as Yahoo! (YHOO), keep these tips in mind:
- Check shipping and handling charges. Steep fees can make a "good price" uncompetitive.
- Be sure the Web site lists the company's street address and phone number. A fly-by-night operation is likely to list a P.O. Box and no phone. That makes returns difficult and is an invitation to take your business elsewhere.
- Check the guarantee because it may be 30 days from when you place the order – not when you receive the merchandise – and you don't want to be caught short. Make sure there's no "restocking fee" or other charge for returning an item.
- Before buying, click to the consumer affairs department of your state, the attorney general or the Better Business Bureau to see if there have been a large number of complaints lodged against the company. Do an Internet search under the company's name to look for message boards along the lines of "I hate (company name)." Read a few postings to gauge the company's customer service and reliability of the comments. If you don't like what you see, take your business elsewhere.
- Make sure the Web site is secure before typing in your credit card number. Secure sites encrypt financial information so thieves can't pluck your account number off the Internet and run up unauthorized charges. At the bottom of the page where you enter your personal information, look for a padlock or unbroken key that signifies a secure Web site. Note, too, that "http" in the Web address changes to "https" on a secure page.
- Print out and keep a record of all your transactions. You'll need it if disputes arise in the future.
- When your order arrives, save all warranty information.
- Review your credit card statement each month to make sure there are no unauthorized charges. If you find a fraudulent charge, immediately contact your bank and close the account. Notify the credit bureaus and place a fraud alert on your file.
- Don't call 900 numbers for an "added bonus" or other promotional items. Unscrupulous companies will lead you through numerous pages of questions signifying nothing except a steep phone bill for you. There may be nothing but vague promises of future savings or a discount offer that's so chintzy as to be meaningless.
Use the Internet's power to your advantage and remember what your mother taught you: If it sounds too good to be true, it's fraudulent.
Do you have children? Check out our collection of the very best in parent-friendly personal finance, Shopping With a Purpose, for more ideas and information on helping your children learn and grow through finance this holiday season and beyond!
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