Dealing With a Dead Dot-Com

Research the Site, Not Just the Product

You can take other precautions to avoid being dragged down by a Web store that's teetering on the brink. One option is to do a little research beforehand on a company's financial health. Doing so may be more trouble than it's worth if most of your purchases are small. You may prefer to take your chances ordering a $15 CD, for instance, rather than spend a half hour poring over an annual report. But for high-ticket items like PCs, or for rare, expensive, or important items or services--especially if they're to be provided by an out-of-state company--doing a little digging may be worth your while.

If the company is publicly traded, consult Company Sleuth, a site that provides related news stories, filings with the Securities and Exchange Commission, analyst reports, job postings, and online discussion groups. If the company is privately held, you may be able to order a Dun & Bradstreet report for about $20.

Another option is to contact the Better Business Bureau in the city where the company is located. The BBB's national Web site provides contact information for agencies located throughout the United States and Canada, including links to individual Web sites. Often, you can pull up an online reliability report within seconds. Just keep in mind that an absence of information about a company does not necessarily translate into a positive report.

Listen to what the industry is saying about the prospects of certain types of online stores, and shop accordingly. Sites backed by large, well-known brick-and-mortar companies, such as Wal-Mart and Petco are safe places to shop, says Seema Williams, Forrester's senior Internet analyst. If those sites have any problems, Williams says, they're likely to be of a tamer variety, such as "getting orders out promptly, like Toys "R" Us did last Christmas. Unlike their now-bankrupt competitor Toysmart.com, you don't have to worry about Toys "R" Us going out of business."