The following column from Phoebe Venable, CapWealth President & COO, appeared in The Tennessean on January 16, 2016.
If you’re like most Americans, you’re spending less time shopping in actual stores and more time shopping on a glowing screen. It is certainly true at my house. We do so much of our shopping online that we had to designate an area in our garage for all of the empty cardboard boxes from almost daily deliveries to our home. As a working mom, I love being able to order anything from toothpaste to flower bulbs with just a click on a website. I also love being able to shop and compare online in order to get the best deal. A mere 10 years ago, I had yet to make my first online purchase.
A brief history of shopping
While this change in shopping habits in some ways seems radical, in other ways it really isn’t. Once upon a time in agrarian America, people produced their living essentials themselves. In the 18th and 19th centuries, general stores cropped up to serve remote, populated places. With the expansion of railroads, mail-order catalogs began to supply what self-reliance and local merchants could not. In the early 1900s, metropolitan cities began building grand downtown department stores that offered the swelling populations of urban dwellers a place to shop while they were in the city to work and do business. In the 1950s, the population shift to the suburbs began, giving rise to shopping malls. In their heyday, they were incredibly popular places to spend a day or an evening browsing through retail shops and department stores. Now shopping malls are becoming relics of the past and outdoor plazas are taking their place – themselves a throwback to the public squares and piazzas of old cities.
But the clearest, strongest trend is indeed online shopping. In the last 14 years, mall traffic has dropped by two-thirds. Just last week, Macy’s announced it would close about 40 underperforming stores as more and more consumers turn to the Internet. JCPenney and Sears have faced similar struggles in recent years. According to the National Retail Federation, 46 percent of holiday shopping – consisting of browsing and buying – was expected to be done online in 2015.
Shop safely online
Many consumers hesitate to make purchases online because of fear of credit-card fraud or uncertainty about the quality of the product or the legitimacy of the seller. Whether you’re an online-shopping veteran or someone who’s still skeptical about the technology, here are some tips from the Federal Trade Commission for increasing security and diminishing hassles when you purchase online.
1. Get the details.
When comparing costs of multiple items, be sure to factor shipping and handling into the total purchase price. Before you make the purchase, be sure you know exactly what you are buying. Words like “vintage” or “refurbished” might mean the product is used or not in mint condition. Be very careful of brand-name items at bargain-basement prices because they very well may be counterfeits. Also, if you don’t know the seller, do some research. Anyone can set up an online shop, so confirm their physical address and phone number for more legitimacy. When browsing a site, if you get a pop-up message asking for your personal financial information, don’t reply or click on the link. Companies on the up and up don’t ask for that information.
2. Pay by credit card.
The Fair Credit Billing Act protects you when your online purchase is made with a credit card. Under this law, you can dispute charges and even temporarily withhold payment while the creditor investigates the transaction. Do not send cash or money transfers under any circumstances. It may seem a little scary to give your credit card information online, but it really is the smartest way. Many businesses these days have specialized software that can help customers experience a safe checkout. Some businesses have invested in FastSpring, their global payment processing software allow businesses to have secured online transactions, keeping the business and the customer safe. Be sure to only purchase from businesses that look secure.
3. Keep records.
Print or save records of your online transactions. Be sure to check your credit card statement and be on the lookout for charges that you don’t recognize.
4. Protect your information.
Do not email anyone any of your financial information. Email is not a secure method of transmitting financial information like your Social Security number, credit card number or banking information. If you begin a transaction and are asked for this type of information, pick up the phone and call them. Make sure the retailer is legitimate before proceeding.
Additionally, it is important to remember that all credit and bank cards expire at some point. However, did you know that your information can still be stolen and used, even though your card has expired? Old credit cards still contain all the account information that a thief would need to commit identity fraud and therefore it is crucial that you shred your credit cards.
Ultimately, the more steps that you take to protect your identity, the better your chances of keeping your details secure.
If you encounter a problem with an online transaction that you can’t resolve directly with the seller, you can file a complaint with:
•The Federal Trade Commission at www.ftc.gov/complaint.
•Your state attorney general, using contact information at www.naag.org.
•Your county or state consumer protection agency – visit www.consumeraction.govand look under “Where to file a complaint.”
•The Better Business Bureau at www.bbb.org.
Phoebe Venable, chartered financial analyst, is president and COO of CapWealth, LLC. Her column on women, families and building wealth appears every other Saturday in The Tennessean. To read Phoebe’s previous column, click here.