Attention, Internet Shoppers! Seals of Approval May Mislead You

Seals to Look For

A seal is only as good as the company awarding it. That company should thoroughly screen Web-based businesses for legitimacy and questionable business practices. It should also provide a mechanism for resolving customer complaints. The seal of the Better Business Bureau--an organization that existed long before anyone heard of the Internet--offers more meaningful protection than the others we examined.

To obtain the BBBOnLine seal, a business must be at least a year old, provide bank and customer references, and disclose the names and backgrounds of company owners. It must pass a background check that looks for evidence of fraud or action by government regulators. The company must also participate in a Better Business Bureau arbitration program for handling customer complaints. Web site owners we spoke to verified that BBB representatives had visited their offices as well as their Web sites. The BBB seal does not come cheap: It costs $400 to $500 for a small business, and up to $5000 for large corporations. (Members of the BBB pay less: $200 for small businesses, $2000 for large ones.)

The WebTrust seal, awarded by CPAs licensed by the American Institute of Certified Public Accountants, is also worth looking for but doesn't quite measure up to the BBB standard. Qualifying sites must submit to an examination by a CPA, who checks the company's business and privacy policies every 90 days. The accountant makes sure the company is solvent, verifies how quickly products ship once orders are received, and ensures that the company abides by its stated privacy policies. Who pays for all this quality control? The Web sites. Since examinations can run thousands of dollars, even for small businesses, the cost adds up fast. Another downside: If a consumer has a complaint, WebTrust offers no mediation mechanism.

If you're concerned about privacy, look for a seal from Trust-e. The Trust-e seal means a Web site has posted a privacy statement telling shoppers what personal information the site gathers. Trust-e investigates complaints about its member sites. A Trust-e seal costs $249 for companies that have annual sales below $1 million, and up to $4999 for larger firms. The seal does not protect consumers from problems related to the quality of products and services that are offered by online vendors.