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5 Tips for Safe Online Shopping

Who doesn’t love online shopping? With draws like free shipping, tasty discounts and seemingly infinite options, it’s never been more enticing. But while it’s convenient, failure to exercise due diligence before buying could result in some real headaches down the road. Read on for 5 ways to avoid falling prey to unscrupulous sellers and internet scam artists.

1. Buy from a reputable company. “First,” says James Nehf, Associate Dean of Graduate Studies and Professor of Law at the Indiana University School of Law at Indianapolis, “buy from a company you’ve already had success with.” If it’s not possible, he suggests visiting the Better Business Bureau (BBB) and perusing its business directory. “We only accredit companies we consider trustworthy,” says Claire Rosenzweig, President and CEO, BBB of Metropolitan New York. Google and Bing online search engines are also helpful tools: “If the company has a bad track record, someone’s probably blogging about it,” adds Nehf.

Likewise, a reliable outfit’s terms and conditions should always be transparent. “An offer should be well-defined,” and images and descriptions should match products offered,” says Rosenzweig. Privacy, refund and return policies, shipping and handling fees, delivery times, rebates, discounts and sale prices should all be published on the company’s website.

Don’t fall for pressure tactics (claims of a product’s limited availability, “act now and save,” etc.), and never pay with cash, via private courier or with a check or money order. And if an emailed deal sounds too good to be true, it usually is: “Chances are, someone is looking to phish, or steal, personal information,” says Nehf.

2. Protect yourself. Always use a secure browser that encrypts, or scrambles, your personal information: The prefix https:// and/or a closed padlock or key in the lower-right corner of a company’s checkout page ensures a session is encrypted, or secure. A broken key or lock indicates an unencrypted site; avoid entering personal info. Also, “most emails aren’t encrypted, so never email credit card or other personal information,” warns Nehf.

Passwords should be duly protected, too. Never reveal them, and avoid choosing obvious codes, such as birthdates, addresses and telephone and social security numbers. Always create unique passwords for different accounts.

Eschew online purchases on shared computers. Hackers can install keyloggers—special software that captures pre-encrypted info—on public workstations. At home, “Install the most recent security and anti-spyware updates on computers, tablets and handhelds. If you don’t, the rest is moot,” says Rosenzweig.

3. Pay with plastic. Use a debit card for an online purchase and money is taken directly from your checking account; once it’s gone, it’s gone. Credit card purchases are protected under the Fair Credit Billing Act (FCBA). Thereunder, you can dispute charges under certain circumstances, and temporarily withhold payment while your creditor conducts an investigation. Moreover, credit card companies have the cash—and manpower—to scrutinize fraudulent businesses with expediency.

In an effort to thwart online shopping fraud, many card companies offer ‘virtual’ cards with temporary numbers that link to members’ accounts, but change after each online purchase. NEA Member Benefits’ credit cards, the Bank of America® ShopSafe® feature (for Visa® and Mastercard® holders only), Citibank’s Virtual Account Number and Discover’s Secure Online Account Number services all embody the virtual-card concept. All are excellent no-cost ways for existing cardholders to shop safely online.

4. Maintain a paper trail. Print out a dated copy of the seller’s terms and conditions, the product warranty, the item’s description, company information, receipts, emails between you and the seller (especially if you’ve participated in an online auction), notes from phone conversations and any other records of your transaction, and keep them, together, for your records.

5. Know your rights. Federal law requires that orders made by mail, phone and via online merchant be shipped by the date promised or, if no delivery time was stated, within 30 days. If your item isn’t shipped on time, you may cancel the order and demand a full refund. “Consumers also have the right to reject defective or misrepresented merchandize at any time,” says Rosenzweig. If a seller refuses to grant a refund for such products and you’ve paid with a credit card, “contact the credit card’s lending bank, and contest the charges,” says Nehf. “They should remove them from your statement and charge them back to the seller.”

So, you’ve been ripped off?

If a seller proves unamenable—or simply goes AWOL—file a complaint with the BBB, Office of the State Attorney General (in your state or the seller’s state) and the Federal Trade Commission, which receives international consumer grievances, too. “If all else fails,” says Nehf, “you could file a lawsuit. But be warned: While small claims court isn’t expensive, it can be difficult to recoup money even if you win. If a seller is outside the U.S. and can’t be tracked down, your judgment won’t be worth the paper it’s printed on.”

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