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Transcript

  1. Welcome to "Online Shopping: What you Need to Know." This presentation will discuss the use of the Internet to make household purchases.

  2. Class Objectives: In this presentation, you'll learn about common online shopping concerns, such as privacy, payment methods, and shipping. You'll also learn about features of quality online shopping Web sites.

  3. Online Shopping is Increasing: Online shopping is fast becoming a 21st century life skill. Online sales are expected to double between 1999 and 2000 and keep increasing. The average online shopper spent $1,205 in 1999. Increasingly, investors are going online to purchase securities.

  4. Advantages of Online Shopping: There are many advantages to online shopping, including the fact that you can shop 24 hours a day, 7 days a week, and avoid the traffic and crowds often found at shopping malls. You may also be able to save time and money searching for products and gather information quickly. Many online merchants provide personalized services. Also, you probably won't have to pay sales tax on items you purchase online.

  5. Risks of Online Shopping: Online shopping also has its risks, such as dishonest or irresponsible sellers. There are also financial frauds, such as "pump and dump" schemes where the price of stock is manipulated. There are also issues related to privacy, such as "cookie" text files that are placed on a shopper's hard drive. Overspending and overtrading of stocks are other frequent concerns.

  6. Dishonest Sellers: Beware of dishonest sellers. Always check their reputation and physical location and get information about a product or service and any warranties or guarantees. Consider using an escrow service when making purchases through an online auction. Money and merchandise are not released until both parties are satisfied. The typical fee is 2% to 10% of the sales price.

  7. Look for "Watchdog" Approval: Also look for indications of quality from "watchdog" groups. Two frequently-used resources are the Better Business Bureau Online Seal, which indicates that a merchant is a participating BBB member, and Bizrate, a Web site where buyers provide opinions about sellers and there are ratings for service and delivery time.

  8. Financial Fraud: Be careful to guard personal financial information such as your Social Security number and bank accounts. Also, use a credit card for protection against loss or theft and dispute procedures if you're unhappy with a purchase. Keep good records, such as a hard copy of your online order form and notes from conversations with an online merchant.

  9. Invasion of Privacy: Beware of online application forms or surveys that solicit detailed personal information. Also, find about a seller's privacy policy, if any. Check your hard drive for "cookies" and consider deleting and/or blocking them. If they are linked to other personal information, your personal privacy could be jeopardized.

  10. Privacy Watchdogs: There are several "privacy watchdog" organizations that review and rate the privacy policies of Web sites. Those that pass muster are assigned a special seal which is displayed on their home pages. Two major privacy seal programs are Truste and enonymous. The best Web sites allow users to opt in before personal data is collected.

  11. Privacy Policy Should State...: This slide shows things to look for in an online merchant's privacy policy. You want to know what data will be collected, what it will be used for, and with whom it will be shared. Also, how long it will be on file and how it will be protected. At the very minimum, there should be a procedure to opt out and stop unsolicited e-mail.

  12. Paying Safely: Use caution when making payment for online purchases. Use a secure browser so that credit card information is encrypted. Also look for browser icons such as a locked padlock. Never send credit card information by e-mail and always print out order confirmations and keep them as receipts.

  13. The Fair Credit Billing Act: The Fair Credit Billing Act applies to online purchases with a credit card. There is a $50 maximum liability for lost or stolen cards. Buyers also have the right to dispute charges for merchandise that never arrives or is in shoddy condition. Be sure to put your complaint in the form of a letter and mail it to the address for dispute resolution, not the billing address. Even if you call or e-mail the seller, follow up with a letter.

  14. Check on Delivery Dates: Keep records of promised delivery dates, such as seller advertisements. By law, sellers must ship items by the time they promise or - if no date is promised - within 30 days after ordering. A seller that can't ship within this time frame must notify customers and provide a chance to cancel and get a refund. The seller also has an option to cancel.

  15. Some More Shopping Details: If a company does not promise a shipping date and you are applying for credit, the company has 50 days to ship. For magazines and other ongoing or periodic purchases, the 30-day rule applies only to the first shipment. An example would be a "dessert of the month" order.

  16. More Delivery Rules: Always contact the seller if merchandise is not delivered on time and you haven't been notified of a delay. If you cancel an order, your money must be refunded within 7 days or your credit card account credited within one billing cycle. There is no automatic cancellation for online, mail, or telephone orders as there is for door-to-door sales.

  17. Shipping and Handling Fees: Always check shipping and handling fees. Costs matter! Some sites advertise "free shipping" but include a handling fee that costs almost as much. You can generally choose from among several delivery methods and, if you don't select one, the seller will.

  18. The Best Web Sites Disclose...: Look for Web sites with detailed information about how to contact them by mail or by phone. The cost of products and services should be clearly explained, as well as privacy safeguards and the availability of warranties and guarantees. Also look for the estimated delivery date and the seller's return and exchange policy.

  19. Shopping "Bots": Another resource for online shopping are "bots." which are specialized search engines that enable shoppers to make price comparisons among dozens of online retailers. An example is www.mysimon.com. Bots rank sites by price and provide links to e-merchants. The best bots also provide e-information about shipping charges, taxes, and product availability.

  20. Online Auctions: Like traditional auctions, online auctions sell to the highest bidder. Often these auctions don't have possession of merchandise and the highest bidder must deal with the seller. The seller typically contacts the buyer by e-mail to arrange for payment and delivery.

  21. Final Thoughts: Remember, if a product or service sounds too good to be true, it probably is. Also, never give out any personal information in response to a request to "confirm the numbers." It is estimated that 65% of shoppers who place items in a virtual shopping card never complete the purchase.