Online comparison shopping sites make finding competing prices on many different products a cinch. But as anyone who has used one of these services knows, they're not perfect. It's easy to find customers complaining of being lured into doing business with online stores that subject them to high-pressure sales calls, bait-and-switch techniques, delivery no-shows, or the delivery of refurbished items advertised as brand-new.
To help you figure out how to get the best deals, save time, and avoid shifty retailers, we went snooping in the online sales world. What follows is the real story of how these shopping engines work.
Paying for Prominence
Most shopping engines are biased toward companies that pay them fees for prominent placement. Comparison shopping engines like Shopzilla.com, Shopping.com, and PriceGrabber.com work with merchants who sign up to make their product inventory available for the engines to search by keyword. Merchants don't pay to have links to their products; rather, they pay the shopping engines when customers click on the links to their stores.
In addition, any company that wants to be first in the unsorted search results can have that position--if they pay for the privilege. To be the first merchant listed in the "LCD" subcategory (Computers>Monitors>LCD) at NextTag.com, for example, a company must pay NexTag at least $1 for every prospective customer who clicks a link to its store from the NexTag site. The more a merchant is willing to pay for clicks to its site, the higher it will rise in search results.
Stores that pay for placement on shopping engines are always identified. The meaning of a "Sponsored Links" list on a page is obvious, but you may also see logos on shopping engines' sites that say "Featured Stores" or "Featured Merchants"; such logos denote paid placement. (Clicking on the words "Featured Store" or "Featured Merchant" inside a store's ad should pull up an explanation of what the terms mean exactly to each shopping engine.)
Tip: To eliminate such artificial emphasis, always re-sort your search results based on price or user review rankings.
Some shopping engines don't charge merchants to be included in search results. Among the no-charge engines are Google's Froogle, ShopWiki, TheFind, and Microsoft's Live Product Search Beta. These shopping search engines crawl the Web looking for products and also allow merchants to submit their product catalog for free.
Ever find that a search engine doesn't have any results for a product you know is available? Shopping engines don't always report the most comprehensive list of products, according to Brian Smith, an industry analyst with research firm Comparison Engines. That's because merchants often remove low-margin and low-cost items from the product catalogs they share with shopping engines, Smith says.
Some Logos Not for Sale
Shopzilla offers a "Smart Choice" seal that cannot be bought and is given to the store that offers the lowest price and has the highest customer ratings. Similarly, Shopping.com highlights a search result called "Smart Buy"--a title the company says cannot be bought. This, according to Shopping.com, indicates "the lowest available price from a Trusted Store." (In tomorrow's story, we'll examine how these endorsements can encourage you to deal with stores you might best avoid.)
Despite the claims of such site picks, a look at the legal fine print at most shopping engines reveals that they take no responsibility for the merchants they recommend. One exception among leading shopping engines is Yahoo Shopping. With select merchants and purchases less than $1000, it offers a Buyers Protection Program. When you buy from a participant in the program and that merchant either fails to ship or delivers something other than what you ordered, Yahoo Shopping offers an expedited process to get your money back.