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5 tips for safe online shopping

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If an online store requires you to enter your bank account info, send a check, or pay by a wire transfer, this is a huge red flag for a scam.

1. Shop from a safe device

In order to stay safe while shopping online, it's critical that you're shopping on a safe device. Otherwise, when you transmit your personal information to complete your order, you risk that information being intercepted by hackers.

If you're shopping from your home computer, be sure that you've taken proper security precautions first. This includes keeping your browser and operating system up to date, installing anti-virus and firewall protection, and reconfiguring your Wi-Fi for maximum security.

If you're shopping from a mobile device, be sure you know how to keep your mobile phone secure. This includes keeping the operating system of your device up to date and staying off of public Wi-Fi.4 Instead, use a secure home Wi-Fi connection or the network connection from your phone's data plan.

In addition, if you're using an app rather than a website to shop from your mobile device, be careful about which apps you download: Scammers use copycat apps5 to grab your personal data, and it can be hard to tell the difference between a copycat and the real thing. The safest approach: download mobile shopping apps directly from the retailer's website.

2. Choose trustworthy sites

The safest sites to shop on are typically the big-name stores that have been selling online forever — and smaller local retailers you know directly who have moved online.

But sometimes the item you want — or the best deal on that item — is for sale on a site you've never heard of. How do you know if you should trust it?

Consumer Reports offers some guidance on how to spot an online shopping scam.6 These tips include:

  • Look at online reviews. Do a search for the company name and reviews to see what comes up. Bad reviews or negative news stories about the company should send you shopping elsewhere. You can also check the Better Business Bureau website7 to see if there have been complaints filed about the company.
  • Examine the website. Does the writing and design look professional? If not, that's a sign it may be a scam.
  • Verify the company's contact info. If website lacks a physical address, a phone number, or an email address, that's a red flag. If there is contact info, call the number to make sure someone really answers, and pop the address into an online mapping tool to make sure the address actually exists. In addition, any U.S.-based company should be registered with whatever state they are located in. Verify the company's registration with the state. (If they aren't registered, shop elsewhere.)
  • Make sure the site is secure before entering any personal information. In the URL bar, you should see HTTPS (the "s" means secure) instead of just HTTP. If you don't see the "s", any information you send would not be sent securely.

3. Weigh every "deal" carefully

Before you decide to make a purchase, be sure to weigh every "deal" carefully. Here are some questions you should ask before you click "Place Order".

  • If the deal arrived in your inbox, are you sure it's a legitimate offer? It could be a phishing email sent by scammers. If it's from a company you don't know, it's best to assume it's a scam and ignore it. Even if it's from a company you know, don't click on the email link; instead, go directly to their website. If there's a promotional code in the email, you can usually just copy it and paste it in when you check out.
  • Is it really a "deal" after you factor in shipping costs?
  • Are there any hidden catches, like a required monthly subscription?
  • Is the item you're buying returnable — and does that matter to you?
  • If returns are accepted, who pays for the return shipping?

4. Pay with a credit card

If an online store requires you to enter your bank account number, mail in a check, or pay by a wire transfer service like Western Union, do not place the order. Requiring these sorts of payments is a huge red flag.

It's always best to pay for online purchases with a credit card, since credit cards offer key protections that debit cards, prepaid cards, and gift cards don't. The Fair Credit Billing Act8 allows consumers to dispute fraudulent credit card charges — and limits your liability to no more than $50. Some credit card companies may offer you additional protection as well.

    5. Guard your personal data

    Don't give any online store more information than absolutely necessary.

    • If you're filling out an online form, only fill out the required fields (those marked by an asterisk).
    • Never give out your bank account number, driver's license number, or Social Security number.
    • Not all shopping sites require you to set up an account to make a purchase. But if you do set up an account, be sure to choose a secure password — and opt for multi-factor authorization if it's available.

    This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

    1. Andrew Lipman, "US Ecommerce 2019: Mobile and Social Commerce Fuel Ongoing Ecommerce Channel Shift," eMarketer, published June 27, 2019, accessed April 16, 2020. Back
    2. TransUnion, "TransUnion Research Quantifies How Social Distancing is Changing Shopping Patterns," published March 24, 2020, accessed April 16, 2020. Back
    3. Lily Hay Newman, "Coronavirus Sets the Stage for Hacking Mayhem," WIRED, published March 19, 2020, accessed April 16, 2020. Back
    4. J. D. Biersdorfer, "The Security of Cellular Connections," The New York Times, published August 10, 2018, accessed April 16, 2020. Back
    5. Zak Doffman, "Android Warning: Thousands Of Dangerous Copycat Apps On Google Play, Study Finds," Forbes, published June 24, 2019, accessed April 16, 2020. Back
    6. Amy George, "How to Steer Clear of Online Shopping Scams," Consumer Reports, published December 6, 2018, accessed April 16, 2020. Back
    7. https://www.bbb.org, accessed April 16, 2020. Back
    8. Federal Trade Commission (FTC), "Disputing Credit Card Charges," accessed April 16, 2020. Back