Is It Safe?
A cartoon shows two men talking about shopping online as they finish lunch at a restaurant and hand the waitress a credit card. In the next panel, one man is saying "I would never give my credit card number out over the Internet -- it's too risky." Meanwhile, his waitress comes back with his credit card and she is now wearing a mink coat.
Online stores use encrypted forms to get your personal information and credit card number. They store it in encrypted files on hard drives which are behind locked doors. Their computers are protected by all kinds of anti-hacking software.
It's not 100% impossible for someone to get your credit card data after you have used it on the Internet, but it is many times more likely that crooks could get get your credit card number from your using it at a real ("brick and mortar") store or restaurant, or from your losing your wallet or getting it stolen, or getting your mail stolen, etc.
Update: In 2013, several times someone tried to use our credit card number to make purchases. In each case, we got a call from the bank saying they had declined the charges (why, I don';t know) and asking us if we made them. When we said we didn't, they issued us cards with new numbers. We have never lost a penny to credit card fraud.
Is There Seller Fraud?
What about giving your credit card to someone to buy a product and they charge your credit card and never ship your product? This might actually happen when buying from individuals through places like eBay, as discussed in the next section, but not when buying from major vendors like Buy.Com or Amazon.Com.
Major stores on the Internet which are doing tens of millions (if not hundreds of millions) of dollars of business a year are simply not going to take your $25 or $250 or even $2500 and keep it without shipping. That would be stupid. Even if you did not get an ordered product for some reason, you should have no trouble getting your credit card company to give you a credit for the purchase.
I buy a lot of landscaping plants online and every company I buy from will send replacement plants if the ones you get do not grow. You don't even have to send anything back. I've bought boots online which did not fit right and the company paid for me to send them back and gave a full refund even though the fault was not theirs.
In my experience with many, many years as both an Internet vendor and shopper, the credit card companies always side with the customers. It is much easier for customers to defraud vendors than the reverse. Someone orders a product and then after they get it, they tell the credit card company they never ordered it. As a vendor, I can tell you that it does not matter how much proof you have that you took the order and that it was delivered to the customer's address, since the transaction was not face-to-face, you cannot ever really prove that the card holder actually placed the order himself nor that he really received it.
As a vendor, we lost money to people buying with stolen credit cards. We reported them to the postal authorities and to the police, etc., and nobody would ever do anything about it, at least not in terms of reimbursing us, though the original cardholder got credited.
The primary source of seller fraud is on places like eBay when someone advertises something, takes the money and either never ships the product or ships something other than what was advertised. I will not go into all the things eBay does to prevent such fraud, but they do a lot, and I have personally never gotten completely ripped off, but they do not control it 100%.
Actually, I have gotten many great bargains via eBay, even though I never buy used products from individuals. What I look for is good prices on new products being sold by companies which sell extensively through eBay and have the highest ratings, and only then when I'm looking for a specialty item not carried by major stores like Amazon. For such products, you normally do not have to go through the bidding process. Instead, you can click on a "buy-it-now" button and order the product immediately for the advertised price.
That said, eBay is usually the LAST place I look. I find that stores like Amazon.Com have at least as good prices, often with no s&h charges, and are easier to deal with.
Big-name stores like Amazon.Com, Buy.Com, etc., are very safe to deal with. Not only that, if Amazon does not carry a product, they will let you order it from another store, but the charge is still made through Amazon s. So you do not have to deal with an unknown store, and Amazon still gets you a good price.
However, as good as Amazon is, third-party vendors who sell through Amazon are their (Amazon's) greatest weak point. This is discussed in more depth later.
Also, while I used to never bother checking prices with anyone but Amazon because they had the lowest price, I have found many instances in the last year (2013-2014) where Amazon was substantially higher than other place, even higher than places like Home Depot, so I'm back to price comparing with other companies now.
Update: Almost always when Amazon showed a higher price for a product, it was being sold through Amazon by a third party, often because Amazon has sold out of their own stock of the product. Recently (2014), I have noticed that in such cases, Amazon has a link to click with their regular discounted price and when you click it you are told when the product should be back in stock.
How To Shop
Say I want to buy a digital camera. The first thing I'll do is decide what I am going to use it for and what features I'll need. For example, I may need a very long zoom lens, good low-light picture taking quality, and I want to pay less than $500.
First I will ask someone knowledgable if they know what the latest and greatest is that meets my specs, and I'll use that as a starting point.
Next I will go to Google and search for the recommended product. If I do not have a recommendation to start my search with, I would search for something like "digital camera, long zoom, low-light". I might vary that to get more leads if nothing worthwhile comes up.
Next I will look for links which have reviews of the product. The great thing about the reviews is not just that you learn the pros and cons of the product you started your search with, but that they will usually say something like "You can get better features from product XY for the same price." I would then Google for information about product XY.
There is a LOT of review type information, as well as customer feedback online. Another great thing about Amazon.com is that when you bring up a product, they usually have customer reviews at the bottom of the page.
Once I have decided what product and model I want to order, I will go back to Google, but this time I will be looking for companies selling the product. There are a large number of sites which will run a price comparison and show you which stores have the best price. Some of these comparison sites will even let you enter your zip code and show you prices including shipping. This is important because some companies offer very low prices, but charge very high shipping, while others many charge no shipping.
Update: This type of scam happened to me in the early 2000s and before. It doesn't happen to me anymore because I almost always buy through Amazon, so I don't know if companies are still doing this.
If you are shopping for some electronic gadget, you will probably see some stores which have your desired gadget for about half what a big-name store like Amazon will have it discounted to. For example, a camera which lists for $400+ may cost $320 at Amazon, but at a price-comparison site, you may see companies selling it for around $165. There three ways for them to be able to do this:
1. It's a factory refurbished product. There is probably nothing wrong with this. In fact, some people claim that a refurb unit has, by its very nature, undergone more testing than the usual "new" unit. However, you may get a 90-day warranty instead of a 1-year and/or the warranty may not be from the manufacturer but a third party who may or may not do a satisfactory job, so it is not without risk.
2. It's a gray market/import model. Some stores, particularly those overseas, order larger quantities of products to get better prices, then they sell many of the units to other stores at their cost. Say they wanted 30 items but would only get a 40% discount, but if they ordered 50 items, they could get a 50% discount, so they order 50 and sell 20 to other stores. These stores then sell them to you. The manufacturer may or may not support such products, but the stores will provide a warranty, just not the manufacturer's warranty. Still, for half price, it is something you may want to consider.
3. They are scammers. They advertise something like a camera for a ridiculously low price. You verify that it is not an import or a refurb and think you have just gotten the deal of the lifetime, so you order it. Later you get a call from the scammer saying he has to verify your order. Once that is done, he then puts the hard sell on you to buy grossly overpriced accessories which you actually DO need, such as a spare battery. memory card, and most particularly, an extended warranty. You could end up spending $300 for an "extended warranty" which (1) if you shopped around you could get for $50 and (2) is not a FACTORY warranty.
The odds are very high that you will not need an extended warranty, but if you do, you will find yourself trying to deal with some warranty company which may or may not still be around and which may or may not be able or willing to fix your camera. Remember -- they make ALL of their money when you buy the warranty, and they lose money when they have to repair your camera. Guess where their incentive is.
So... you are offered all this way-overpriced stuff. All you have to do is decline it, right? Well, yes. You can refuse to order anything but the camera at the deal-of-a-lifetime price on which the company loses money. Do you think they are really going to sell it under those conditions? No, of course not. Instead, they will tell you they are back-ordered, even though their web site says "in stock" and "same-day shipping". You will never get it from them at that price unless you order overpriced accessories.
In summary, their scam is that many unsuspecting people, seeing how cheap the camera is, assume they are getting similar deals on accessories, instead of just the opposite, so they order the stuff and the company makes more money than if they priced the camera right, but if the customer refuses to order the stuff, the company won't sell and they do NOT lose money. They can't lose, which means you can't win.
How Amazon.Com Operates
Very rarely do I purchase online from anyone but Amazon.com. They almost always have the cheapest prices and if they don't carry a product, they will list it and sell it just like products they do carry, with the main difference being that the third-party vendor will ship it.
Why not just go to that vendor's web site to order? Well, you could, but that's another vendor to whom you have to give your credit card number and other information. Also, I have seen products on Amazon being sold by a third-party vendor, gone directly to that vendor's web site, and have not been able to find the product.
On the other hand, I recently looked on Amazon at an item from a 3rd party with shipping of $20. I checked on the 3rd party's web site and they only charged $10 shipping, so I ordered from them. Another possible savings is if you want to order more than one item from that same 3rd party. Most stores only add an incremental amount to the shipping charge when you add more items, but if you order the items individually on Amazon, you will pay a separate, full shipping charge for each item.
Besides low prices and the availability, either directly or indirectly, of just about any consumer product made, here are more things I like about Amazon:
1. Customer reviews are a great source of information about the good and bad of products. I wouldn't put too much weight in just a few reviews, but when there are dozens or even hundreds, the average rating is very meaningful. In addition to reviews, Amazon hosts discussions about products (on the product's page) where you can read other customers' questions and answers about products and even post your own questions.
2. Related and similar products are listed on the product's page so that you can see what other people are buying and what accessories you may need.
3. You can move items from your shopping cart to a "hold" section if you are not ready to buy. Then whenever you go to the shopping cart, you can see the items being held and move any or all of them into your cart if you wish. Amazon will also alert you if the price of anything has changed. If some item costs more than I want to pay, I will put it in the cart's hold section and check every day or so to see if the price has dropped.
4. Amazon does not dump your cart if you don't buy right away as most other stores do.
5. Amazon does not (usually) charge shipping nor sales tax for products they are shipping if your order totals more than $35, even if the order is made up of cheaper items which must be shipped separately; however, most third-party vendors selling through Amazon do charge shipping; check the next section on scamming.
Amazon And Scamming
Being a huge fan of Amazon, I hate to have to say that you can run into a couple of scams on their site. As long as you beware of these pitfalls, the numerous advantages of shopping Amazon will leave you well ahead.
1. Third-party low-ball prices with exorbitant s&h.
When you search for a product on Amazon, you'll get a long list of items. For which the price is shown, but not the shipping charge. As an example, I just searched for "hdmi cable" and got dozens of matches.
The first match shows a list price of $20 and a sale price of $1.71. When you go to that product's page, THEN you see that a third-party vendor is selling them and each cable ordered also carries a s&h charge of $3, even if you order several at once which ship in the same bubble-envelope with 50-cents postage total. So the real unit price is actually $4.71, including s&h.
Next listed is a cable listing for $35 and selling for $10, shipped by Amazon and with no additional s&h.
Down the page is a cable listing for $130 and selling for $90!!! The company (selling through Amazon) "generously" refrains from tacking on additional s&h.
One of the customers who bought this cable posted a review in which he said that he later bought a $2 cable and saw no difference. He went on to say that the reason is that if your video and audio signals work at all, then the signal is being carried correctly. There is no middle ground with HDMI. Better cables do not incrementally improve picture quality! Why? Because the HDMI is digital, and it's very difficult to distort a 1 into a 0. In fact, it's technically impossible without total signal distortion or failure.
So on the one hand, Amazon is selling a product from a third-party vendor who changes $90 for something that is no better than a different brand which sells from another vendor for under $5. On the other hand, they do print customer reviews (and there were more than one) warning customers that $90 was grossly overpriced. But HDMI cables are fairly unique. You are unlikely to run into this situation with other types of products.
The big scam is vendors pricing items extremely low and then tacking on large s&h charges. You would think that people would look to see what s&h is, but when you are dealing with a company you trust (Amazon), you don't expect such scams, and I've read reviews from customers who ordered such items without noticing the s&h. Also, when ordering several different products at once, some from Amazon and others from various 3rd parties, when you check out, it can be difficult to tell just how much s&h you are paying for each individual product.
Still, in this case, even the $4.71 total including s&h is cheaper by more than half than the Amazon-stocked cable for $10 and no s&h. It's just that the scammy way it is done leaves a bad taste.
2. "Buy Together Today"
Let's say you are looking at a digital camera at Amazon. Below the camera write-up is a section where the camera is paired up with a related item such as a case. You are told that if you buy them together today, the price is $319.39, but if you do the math, this is the exact total you would pay if you bought the items separately.
While the Amazon page never actually says it is giving you a bargain price for buying both, the presentation and our past experience with such offers leads us to assume that when you buy a bundle of products, you get them cheaper than buying them individually. I strongly suspect that many people click on this buy both button thinking that they are getting a bargain and they don't bother to do the math.
Since you do NOT get a discout with these "Buy Together Today" bundles, you should NOT take these offers. In this example, just add the camera to your cart, then if you want a case, search for cases, compare features and prices, and order the one that is best for you.
3. High Prices from 3rd Parties
In January 2011, I wanted to buy an Archos 70 tablet which was in high demand. Amazon did not have it in stock, but I found it at another store for $338. In the coming weeks, most stores sold out of the A70, but Amazon kept listing it by using 3rd-party vendors, no matter what the price. At one point they were charging over $450 for it.
I have seen this pattern repeat with other high-demand products. The point is that you cannot trust Amazon to have a good price if they are listing 3rd-party vendors selling hard-to-get products.
Update: As previously noted, Amazon seems to have adopted a new policy (in 2014) of showing their original low price with an estimate of when they will have them in stock again.
4. Advertise A New Item, Ship An Old One
Again, this is a 3rd-party vendor scam. For many products, Amazon has a page for a new item, but they have a link to a list of vendors selling the same item, new or used, at a range of prices. I was looking for a technical book that sells new (8th edition) for over $100, but on the used page, a vendor had it a cheap price. I assumed it was an older edition, which was okay to a certain point, but I didn't want an edition which was completely out of date.
So when I ordered, I sent the company an email at the same time saying not to ship the book if it was less than the 6th edition. When the book arrived and was the virtually worthless 2nd edition, I asked for a refund and was refused. Amazon has a guarantee on third-party purchases and they also refused to honor it.
5. Watch The Fine Print
Another third-party ripoff was when I was looking for surround sound speakers. The picture showed two speakers and the price was a little better than other speaker sets, so I ordered them. Only one arrived. Turns out that what the picture showed, the fine print buried further down the page took away. I had to order a 2nd speaker and pay an additional, ridiculously high shipping charge. I ended up paying about twice as much as other pairs of speakers with the same specs.
I still shop Amazon...
Despite the scams listed above, I still make Amazon my primary shopping place. It's a shame that they are flawed by these things, but if you are careful when shopping Amazon, your experience with them should be very positive overall.
When you buy a product such as a camera, the odds are greatly in favor of the camera working right out of the box and you never need help with it, but what if you turn it on and it doesn't work?
If you bought the camera locally, you probably have to spend a couple of hours (if you live in HSV) taking the camera back to the store. The good news is that if they have more of them in stock (and they may not), they will just swap it out for you. You are out another $20 worth of gas driving back and forth, but you have a working camera right away.
If you bought the camera from Amazon, they will provide you a link where you can print out a prepaid shipping label to return the camera to them. You'll have to drive to the nearest UPS drop-off and wait a week or so for the new one to come back, so you are out time instead of money.
So for immediate problems, whether online or local buying has the advantage depends on whether you value money more or less than having a working camera immediately.
If you have the camera a few weeks before any problems develop, you are probably in the same fix either way. You probably have to deal with the manufacturer instead of the store that sold it to you, which normally means shipping it back to the manufacturer or taking it to a local authorized repair center, if any, no matter where you bought the item.
If the support you need is in the form of help using the camera (or other gadget) either before or after you buy it, you are probably better off online. Even if you pay full list price at a dedicated camera store, the store owner cannot know as much about every single product he carries as an online user group, as a whole, knows for a specific brand and model, and most electronics manufacturers provide user group message boards on their company web sites where you can go for help.
Buying From Dell
For many, many years, if I have needed a computer, I've done some research online, but I always end up buying from Dell. Dell has excellent products at excellent prices and frequently has specials in addition. The rare times I've had problems, Dell has bent over backwards to make things right. In a rather unusual policy for online stores, Dell has always charged state sales tax. This makes your order cost more, but even with the sales tax, I have consistently found Dell's price to be among the lowest, if not THE lowest, for the same quality and configuration.
Say that you want a computer. You go to their web site and compare the features and pick a computer. Next you will want to customize the computer, which involves going through about a dozen screens to select things like memory, hard drive size, type of keyboard, etc.
If you do NOT have technical savvy, you can just pick out a computer that sounds like it is what you need and not customize it, or you can call the 800# and get the operator to help you pick out options. (I say "operator", but they are much more expert than simple order-takers.)
If you have some technical savvy, go through this process, then print out the list showing the computer and components you selected. Then I recommend calling Dell's 800# to order. The reason is that unless you really know EVERYTHING about computers, the operator may be able to give you recommendations. I have 30 years of PC experience and this is still the way I order.
Even though Dell's prices on computers are pretty much unbeatable, given the quality, their prices on components and replacement parts are high. For example, a replacement battery for a notebook computer may be $150, but if you order it at the same time that you order the computer, you may get it for nearly half that amount. Having two batteries also comes in handy if you travel a lot or otherwise need to use the computer where there is no power to plug into.
So after you print the list of accessories you have selected, go to Amazon.com and search for any items you selected which
do not go in the computer, such as a monitor, printer, keyboard, mouse, or external hard drive. I recently ordered a very highly
rated 23" widescreen monitor from Dell at a tremendous price and at the same time, ordered a 3rd-party (i.e.: non-Dell) external video card which would
let me attach the monitor to a USB port on my notebook. Soon after, I discovered that Dell charged 50% more ($99) than Amazon ($66)
for the exact same card.