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Beating the cyber-Grinch
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November 24, 2000: 8:04 a.m. ET
Credit, consumer groups offer tips on safe Web holiday shopping
By Staff Writer John Chartier
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NEW YORK (CNNfn) - Shopping on the Internet last holiday season was a novelty for many. Just getting online and successfully completing a transaction was exciting enough.
But it also was harrowing.
Many online retailers were caught unprepared for the last-minute crush of holiday orders, leaving a lot of red faces and empty hands last December. That, combined with fears about online privacy for financial information, left many skeptical.
Consumers worry that when they enter their credit card numbers on the likes of Amazon.com (AMZN: Research, Estimates), Toysrus.com (TOY: Research, Estimates) or buy.com (BUYX: Research, Estimates), those numbers somehow will make their way to all sorts of underhanded people who may illegally gain access to their funds.
Click here to read CNNfn.com's Special Report: Shopping for the Holidays
And with the volume of holiday Web sales expected to double this year, the threat of online fraud is real. It does happen, but it is not as rampant as some would believe, says Ken Hunter, president and chief executive officer of the Council of Better Business Bureaus Inc.
The BBB and Visa U.S.A., the largest U.S. credit card issuer, joined forces this year to provide consumers a strategy for safe cyber-shopping during the holidays.
"We want to change the way some people think about online shopping. There's a misconception in the marketplace that fraud is rampant online. It's not, and our partnership with BBBOnline will help us dispel some of those perceptions by showing people safer ways to buy and sell on the Internet," said Carl Pascarella, CEO of Visa U.S.A.
Avoiding online rip-offs during the holiday season or any other time of year does not require technical wizardry. As with shopping at any other store, common sense rules. Shop at merchants you know, make sure privacy agreements are posted and, yes, actually take a few minutes to read the policy so you know just what you're getting yourself into.
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 DIGITAL DOLLARS
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U.S. consumers are expected to spend about $11.4 billion online between Oct. 1 and Dec. 31, 2000, compared with just $5.8 billion spent during the same period a year ago, according to research firm Gomez.
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"Surveys indicate 72-92 percent of people stop (a transaction) at this point. They say, 'I've got concerns about privacy and security,'" Hunter said. "What are they going to do with the personal information I provide? What are they going to do with my credit card information? I've read about these companies that go bankrupt and sell their lists."
Also, check the return policies. If you're not sure about a retailer's trustworthiness, either shop somewhere else or check with the Better Business Bureau to see whether anyone has filed complaints against the company. Nowadays, consumers can get such information from the bureau's Web site, www.bbb.org, instead of having to order reports through the mail as in the past.
The BBB and Visa have established a new "Secure e-commerce" program as well as the BBB Code of Online Business Practices and BBBOnline Reliability trustmark program.
These programs call for a consumer education campaign and monitoring of Visa's member merchants to ensure they are following the proper code of ethics when it comes to customer privacy and service. But the core of the program is Visa's payer authentication program, which allows banks to identify their cardholders to merchants during online payment transactions.
The two organizations also released a list of 10 online shopping tips. These include:
Shop with merchants you know, or research before you buy.
If you're not familiar with an online store, take the same precautions you would in the traditional marketplace. Responsible online merchants will clearly post their physical address and telephone number on their web site. Use that information to check their complaint record with the Better Business Bureau. Also ask people you know whether they have shopped the site before and what kinds of experiences they had.
Know the merchant's customer satisfaction policies and the terms of the sale.
Before you click the "buy" button, hunt around the site for information on shipping timeframes, return, refund or exchange policies, product warranty/guarantee details and information about the merchant's commitment to resolve any disputes that might arise. Get a full, itemized list of costs involved in the sale, with a clear designation of the terms, conditions and methods of payment. Know the e-mail address or telephone number of the merchant's customer service department.
Understand the difference between buying from a business and buying from a private seller.
Make sure you know whether the site you are buying from is a business or an individual. That's important because your legal rights regarding an individual may not be the same as with a business. While many private sellers are legitimate, your legal recourse may be different if you're not satisfied with the merchandise. Be wary of "too good to be true" prices or deals.
Use a credit or charge card.
Using a credit or charge card to pay for online purchases means your liability in case of fraudulent purchases made on your account is limited under federal law to $50. Using a credit or debit card also can provide additional benefits.
Be in a secure environment at point of purchase.
Before punching in your credit card or financial information, make sure you are using a secure browser that will encrypt the data. At the point of purchase, look for the prefix https:// in the Uniform Resource Locator (URL) box, which lists the merchant's Web address. If you see that prefix, the site you are using is secure. If you have doubts, or are not comfortable transmitting your information over the Internet, call it in to the company's telephone number, or fax it.
Check the merchant's security system.
Make sure your financial information is securely stored. Do this by looking for information about the online merchant's security policies that indicate whether industry standard levels of security for the storage of personal data, as well as the payment and collection of personal data, are used.
Protect your password.
Some Internet retailers require you to register a user name and password before buying something. Keep your password a secret. If you use a smart-card, a credit card equipped with a small computer chip, you have enhanced security because of the password embedded in that chip on the card that's known only to you and the bank that issued the card.
Exercise the right to protect your privacy.
Shop at merchant sites that have posted privacy policies, that reveal what personally identifiable information is collected about you and how it will be used, and offer you options about the use of your personal information. Look for signs the site has been reviewed by trustworthy organizations such as the BBBOnline to ensure that any personal data collected online is treated fairly and responsibly. Be leery if you are asked to provide sensitive personal information such as your mother's maiden name, your bank account number, or your Social Security number. The only information typically required by reputable merchants is your password, credit card number and shipping information.
Keep a record of your transactions.
Record the URL and all order information so you'll have it all at your fingertips in case a question arises about an order. Several computer software and browser providers now offer electronic wallets that can automatically log your Internet purchases. Many online merchants will e-mail you an order confirmation summarizing the price and quantity of a purchase. Print and save a copy of this information.
Know your consumer rights.
The same laws that protect you when you shop by phone or mail apply when you shop in cyberspace. By law, a company must ship your order within the time stated in its advertisements and no more than 30 days after the order date. If you decide to pay by credit card, your transaction will be protected by the Fair Credit Billing Act. Additional information about your rights is also available through the Federal Trade Commission Web site, www.ftc.gov. 
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