Avoid the Top Online Shopping Gotchas

As online shopping reaches a feverish pitch this holiday season, so can the number of online shopping headaches. 'Tis the time of year for shoppers to get saddled with mystery charges on their credit card, delivery no-shows, and bait-and-switch sales techniques.

Make sure you ring in 2006 trouble-free by giving this list of ten common online shopping sinkholes a look so you don't get stuck.

Secure Web Site

It's sometimes hard to tell a reputable site from a fly-by-night online store.

One basic way to assess whether a site is trustworthy and secure is to look for a padlock icon in the locked position in the lower right hand corner of your browser window. This padlock indicates the site uses encryption technology to transfer information from your computer to the online merchant's computer.

Another way to check whether a site is secure is checking the address field of the Web browser to make sure the site uses the https:// prefix. The "s" that is displayed after "http" indicates that Web site is secure.

Often, you do not see the "s" or a locked padlock until you actually move to the order page on the Web site. And, of course, it doesn't matter how secure a site is if it's run by an unscrupulous company. To verify the site you are shopping at is in good standing with customers check out the company's reputation with the Better Business Bureau's site.

Remember: Never send your credit card or bank account number via e-mail (if you must, break it up into two messages), and don't give out passwords, PINs, or the name of your bank.

Scrutinize a Site's Credentials

Sites often suggest they are reliable by displaying credential from third-party rating firms in the form of icons and seals of approval. Make sure seals, such as those for the BBB, Truste, and Bizrate.com actually link to the sponsoring organization. For example, clicking the BBB seal should take you to its merchant reports.

Also make sure the specific credential means something. A site we recently browsed prominently listed a MasterCard SecureCode logo under a section of the site called "credentials." MasterCard SecureCode is a program to protect the online merchant from fraudulent charges and doesn't mean anything for the online buyer.

Beware of Bait-and-Switch Ploys

It's an age-old trick. A store advertises a great price for a product and then claims to have sold out of it when you want to buy it.

Salesperson participating in bait and switch will try high-pressure sales techniques to get you to buy a similar but different product--at a higher price.

Online, vendors sometimes will advertise a low price for something like a digital camera and then will try to persuade you to buy accessories you probably don't want or need as a way to jack up the price.

Tell the seller to buzz off if they try this sneaky sales technique.

Pricing Engines Don't Always Deliver the "Best Deals"

Pricing engines like Froogle and others are adept at directing you to the cheapest price of a given product. But often the best price isn't the "best deal."

Low-priced merchandise might be a lure to a scam where a site takes your money and delivers you nothing. Recently the New Jersey State Police made recent arrests involving just such scams. Items advertised for sale on eBay but never delivered included Xbox video game systems, designer handbags, laptop computers, and Rolex watches, the police said.

And ridiculously low prices should be a red flag that what you are buying might be counterfeit. According to investigators at Kessler International the most popular phony items sold are designer accessories and apparel, such as purses, watches, wallets, sunglasses, and jeans.

But tech products aren't immune. When buying a stand-alone software package, for instance, ask the vendor if the software is used, promotional, intended for another country (gray market), shareware, burned onto a CD-R, missing manuals, or an old version. If you're buying a PC, make sure that it includes the original CD-ROMs and licenses for all preloaded software. If the vendor balks, walk away.

Best Ways to Pay

If you're offered a choice of paying with a credit card, PayPal, or your debit card, go for the credit card. The Fair Credit Billing Act protects your transaction if you use a credit card. This law empowers you to withhold payment temporarily if you suspect that someone has stolen your card number. No matter what happens, likely the most you'll pay is $50. Do not use ATM/debit cards; they're not well protected as credit cards.

And, if you pay a merchant with the popular escrow service PayPal and get ripped off, you have fewer resources for help than you would if you paid with your credit card. PayPal says it will investigate any complaint you make against a seller and will make "a best-effort" to resolve your complaint but "cannot guarantee funds recovery."

Be Skeptical of Vendor Reviews

Besides a BBB report, vendor reviews are one of the only things consumers have to judge an online merchant's reliability. Site reviews are offered through links at shopping engines like PriceGrabber.com and at sites like Epinions.com. (Note: PriceGrabber powers PC World's ProductFinder tool.)

PriceGrabber.com and epinions.com do a great job of policing their user reviews and weeding out fraudulent ratings. However the Internet is rife with tales of other price engines and consumer rating sites that have been targeted by cheats. To make themselves look good, online merchants abuse ratings sites by submitting positive reviews for transactions involving them that never actually took place.

Get a sense of how trustworthy the reviewers themselves are by looking at the number of reviews each has posted and who else trusts their judgment.

Costly Shipping

Watch those shipping charges. One way sellers have been known to make money on low-cost sales prices is by charging you an arm and leg for shipping and insurance. Also be aware "free-shipping" offers often don't apply to bulky big items. That $20 rug could cost $300 in shipping charges.

Another example: When searching on Amazon for an item, Amazon typically delivers a "Used & new" link next to its advertised price. That "Used & new" price is from a third party and is sometimes cheaper than Amazon's original price. But note that Amazon's longstanding free shipping perks don't apply to these third-party merchants. The non-Amazon price maybe better, but often only before shipping costs are calculated.

Read the Warranty

Before you buy that discounted flat panel TV, find out what the product warranty covers, how long the coverage lasts, and where you have to send the product to obtain repairs, a refund, or replacement. By law, if the item costs more than $10, the seller must explain whether it's covered by a full or limited warranty; the former type entitles you to free repair during the warranty period at no additional costs for shipping, removal, or reinstallation.

It should be noted, used (or as-is) items often come with no warranty at all, or only 90 days of coverage.

Complain Loudly

If you're unhappy with your purchase, contact the seller via phone, e-mail, and/or U.S. mail. If that doesn't produce results, you may file complaints with your state attorney general, the Better Business Bureau, local media, the Federal Trade Commission, your state's department of consumer affairs, and other organizations like ConsumerWorld.org.

Also you may file your complaint with ratings sites Epinions, Complaints.com, Epubliceye.com, Resellerratings.com, and RipoffReport.com. You can also review the site in question at pricing engines PriceGrabber and Bizrate.com.

These sites won't get your money back. But by sharing your story with others, hopefully you'll help others steer clear of a bad merchant.

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