The Online Shopping Cart: Protecting Your Purchases

More and more of us are buying products online, whether through websites of established vendors who also have brick-and-mortar stores or from businesses whose entire existence is online. Internet shopping is perfectly safe, and extremely convenient, so long as you follow some precautions and are aware of the legal protections available to you if things go wrong.

These days, security is not as much of a concern as it used to be when shopping online, but you certainly shouldn’t ignore it. Make sure that you are using the most recent version of your Internet browsing system, which will encrypt, or scramble, your information, making it harder to steal.

It is usually safe to pay online with a credit or debit card. If problems arise, however, the Fair Credit Billing Act protects you. This law gives you the right to dispute charges and temporarily withhold payment while the charges are being investigated. You can further protect yourself by keeping up-to-date records of your online transactions. Keep copies of your online communications with the company and your purchase order and confirmation number. Also, review your bank and credit card statements for billing errors or unauthorized purchases, which might have been made by someone who illegally accessed your information.

UNDER FEDERAL LAW, IF YOU DO NOT RECEIVE THE GOODS YOU ORDERED WITHIN A CERTAIN TIME FRAME, USUALLY 30 DAYS, YOU CAN DEMAND A REFUND.

You can further limit your exposure by acquiring a low-limit credit card and using that card for your online purchases. The lower limit reduces potential exposure if the number is misappropriated.

Problems at the Mailbox
Before hitting the “purchase” button, you should make sure you review the company’s return, refund, and shipping and handling procedures. You will also want to make sure you make note of your order number (many retailers will actually email this to you as soon as the sale is completed).

Save any emails or correspondence when your purchase arrives, examine the item carefully as soon as possible. Contact the seller immediately if you discover a problem. Tell the seller in writing about any problems, ask for a repair or refund, and again, keep copies of any correspondence in case you have to take the company to court.

Under federal law, if you do not receive the goods you ordered within a certain time frame, usually 30 days, you can demand a refund. Companies that cannot make delivery within the legally required timeframe must tell you and also inform you of your right to cancel the order with a full refund.

If the product never arrives and you aren’t making any inroads with the seller, you have additional legal rights under the Fair Credit Billing Act (FCBA) when you’ve paid for the goods with your credit card. Under the FCBA, you can contact the card issuer in writing about such disputes (note—do not send the letter to the billing address, but rather to the address listed on your statement for “billing inquiries.”) The Federal Trade Commission (www.ftc.gov) hosts sample dispute letters on its website. You will want to contact your credit card issuer within 60 days of receiving the bill that contains the challenged charge. The issuer will then acknowledge your complaint within 30 days and will resolve the dispute within two billing cycles. If your credit card issuer isn’t responding to your calls and letters, consider working with your attorney to determine your rights and FTC protections and the proper next steps. You likely have steps to find a solution, but know that time is of the essence.

You may withhold payment on these disputed amounts while your credit card issuer is investigating the issue. However, the disputed amount may be applied against your credit limit during this time. For example, if your limit is $1,000 and you dispute a charge for a $750 television, your credit limit will be capped at $250 during the investigation.

A special note if an online deal seems too good to be true—be on the lookout for gray-market goods. These are products that were not manufactured or intended for sale in the United States, but have found their way here through circuitous routes. Gray-market vendors will happily sell such goods to you at a substantial discount. These products are often made by high-end manufacturers, arrive in excellent condition, and work perfectly fine. On the other hand, gray-market goods may also arrive without a set of instructions in English or a U.S. warranty. If you buy a gray-market good, you take on the risk that if the product is broken or doesn’t live up to your expectations, you won’t have any recourse with the manufacturer or seller. It is the ultimate “buyer beware” situation.