Monday, December 11, 2006

Is buying online safe?

As we get into the thick of the holiday season, a dilemma facing shoppers is whether to buy gifts online or in person. This year such traditional stores as Wal-mart and Target will be encouraging people to buy online with special discounts and online-only items. Industry experts believe this will be a unique year for online sales as more novice users will be making the internet buying plunge for the very first time.

Despite conventional wisdom, online transactions are actually more secure than in person transactions. With in person transactions you actually surrender your credit card to another individual who has a chance to record the numbers. What they do with that credit card number is outside of your control. In reality, a significant number of credit card information is stolen by rank and file employees at places like hotels and restaurants where your credit card is not swiped in your presence. Sometimes a thief will find the credit card number on a receipt you threw away. One of the newest scams is someone behind you in line copying your credit card numbers with their cell phone. In person purchases contain many opportunities where your number can be stolen.

However when buying online, your computer transmits your credit card information directly to another computer. Usually your credit card is never seen or touched by a human: ultimate security. Online purchases have no printed receipts for thieves to find in the trash. Credit card information is stolen not from personal computers, but merchant computers that have millions of transactions recorded. Sometimes the theft is via a savvy hacker, or more likely, a inside job by an employee. Credit card companies find these break ins quickly and protect your credit card before a unauthorized charge can be made.

Ironically, the least common way credit card numbers are stolen is via electronic eavesdropping or viruses. While it does happen, it’s rare. Regardless of your credit rating, your individual information isn’t worth the hassle to steal. Attacking one individual yields just a few credit card numbers, but attacking a merchant system can yield thousands or millions of credit card numbers. It’s always more profitable to rob a bank, because as Willie Sutton said, “That’s where the money is”.

Sometimes an online store is not legitimate and is simply a scam to trick you into giving up your credit card information. Always have an idea of the type of company from which you purchase. If the deal is too good to be true, it probably is. These companies charge so little because they never deliver on the order. Looking for symbols such as those from e-Trust or the Better Business Bureau is a good idea, but that information can be faked. The best tip to know if the company is legitimate is to look for contact information about the company with a physical street address and phone number in case a problem with quality or delivery arise. When in doubt, call the company and make sure it’s actually their phone number.

Even if you are careful with your information, sometimes your credit card number is stolen, regardless of where you used it. In this case, most credit card companies don’t hold you liable for any unauthorized charges so long as you contact them promptly. They’ll also send you a new card right away regardless of whether the transaction was made on or offline. They just want to get the card back to you as soon as possible so you can do more shopping. If you are still concerned about using your card, some companies have “virtual numbers’ that can be used online without risking your primary card information. The best way to find out if your credit card number has been compromised is occasionally to check your balance online and always read your credit card statements once you receive them.

This season, one of the newest trends is for stores to allow you to shop online, pay online, and pick up the item in the physical store. This not only is convenient, but helps keep the purchase local , which is always helpful to the community. Wherever you may shop this season, rest assured that shopping online is as safe as shopping in person.