Safe Online Shopping

December 2003/January 2004

What's an Internet columnist supposed to do? I've got some useful tips for safe shopping and finding low prices. But in this season of good will toward all, I'm generating a lot of ill will among local retailers by promoting online shopping.

To all local retailers: my sincerest apologies. To my loyal readers: shop locally. BUT . . . if you can't find it nearby, then head to the Net.

Now that my conscience is somewhat assuaged, I can tell you about a neat offering from several credit card companies that lets you practice safe shopping. Remember, this is coming from someone who had $8,000 stolen online (and got it all back).

The first thing to realize is that there's very little risk if you make credit card purchases. Federal law stipulates that your maximum liability is $50, and many credit card companies offer zero liability for unauthorized use of your credit card.

Even so, it's time-consuming and problematic to resolve such situations, as I well know. Plus, the reason I lost money in the first place was that someone had gotten my credit card number and used it to gain control over two of my online accounts.

Some credit card companies have now come up with a solution that allows you to shop online, yet not give out your credit card number. Citibank calls it Virtual Account Numbers. It's a free service that generates a substitute number in place of your real number when you make a purchase.

Let's say you want to buy a book on Amazon. Once you know the price, you go to your account on the Citi web site where you generate a new number to use. The service also lets you specify the amount associated with that new number and an expiration date.

You then enter that Virtual Account Number into the online shopping form. If for some reason Amazon were to try to charge you more than the specified amount, they'd get an error. Similarly, once Amazon posts the charge, that number will no longer be valid. If someone had stolen it, that person wouldn't be able to use it for anything.

When you shop using Virtual Account Numbers, your purchases show up in your statement just like any other transaction.

The Discover Card uses a slightly different approach. Called Discover Desktop, it gives you the convenience of not having to first visit a website to generate a number. Instead, you download some software that resides on your computer and that generates a "Single-Use Card Number" when you're ready to make a purchase. The software actually fills out the online checkout form for you.

According to the Discover website, "you can use a Single-Use Card Number at each online retailer; for one, multiple, or recurring purchases. Your Account number is protected during checkout because your actual Discover Card Account number is not revealed online."

My friend John who told me about these services also recommends MBNA's "Shopsafe." I couldn't find any info about it on the website, but apparently it's an option they offer once you sign up for their credit card. He says that MBNA's approach seems the clearest to use, and he likes the fact that it forces you to set a limit, whereas with Citi you have to remember to do that.

I think these services are a great way to give you even more security when shopping online.

Speaking of shopping--in recent months Yahoo bulked up its online shopping portal so that you can search 17,000 vendors. You can browse categories or search for a particular item. You're able to sort the general search results by price by clicking on the Lowest Price link. Once you select a particular brand, say a Canon PowerShot A70 digital camera, you can use the Compare Prices tool to find which vendor has the lowest price. There are also User Reviews for many of the items, particularly electronics (including over 300 reviews of this particular camera).

Another major shopping portal, Shopping.com, links its search results with the Epinions website, so that you can have access to over 1 million consumer reviews of a wide range of products.

And while you're shopping, be sure to check out Amazon's new "Inside the Book" feature. Now when you do a search, you'll not only pull up books that have your search term in the title or keywords or description, but also those books where your term appears anyplace in the book. Awesome. Of course, I searched on "Jim Karpen" and was surprised to find a book that mentioned an article I'd written.

Happy Holidays. Here's wishing you safe online shopping.

© 2003 by Jim Karpen, Ph.D.

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