Online shopping: Don't get stung

By Ellen Irvine

Online sales are booming, but shoppers are being warned to do their research before handing over their credit card details.

Internet safety experts say the most important thing when making an internet transaction is to use a search engine to see if the online shop is legitimate - or if there are already unsatisfied customers in cyberspace.

It's advice which is becoming increasingly important in New Zealand, as internet sales are expected to increase by almost $2 billion in the next four years.

PricewaterhouseCoopers and research firm Frost & Sullivan forecast that almost half the population will spend nearly $1400 each shopping online this year - more than a third of that offshore.

More than 80 per cent of online shoppers are expected to increase, or at least maintain, their level of spending over the next year.

The strong New Zealand dollar has seen plenty of people go online to pick up designer clothes and shoes at a price unbeatable in New Zealand shops.

Consumer adviser Paul Doocey said internet shopping could be cheaper and more convenient than going into a store but warned shoppers to be careful.

Paying by credit card was one of the only ways to protect yourself, he said.

"It gives you that extra protection, if something goes wrong and you are dealing with a provider who is overseas or who is less than reputable."

Credit card companies sometimes allow chargebacks, when the money paid to the retailer is reversed and paid back to the buyer.

"You can go back to your bank, and they will contact the merchant. If you haven't been sent goods you have bought, or if you were ripped off in some way, they will often stop the transaction."

Mr Doocey said simply searching the name of the company and the number of complaints it involved was "the single most useful thing people can do" to protect themselves.

"You [might] find hundreds of hits saying 'these people ripped me off', or find a whole lot of forums from people saying 'I bought something from this retailer and it never arrived'.

"If someone is going to be ripping you off you won't be the first person. There will be a lot of other people out there.

"If you can't find any evidence that someone else has been ripped off, it's a good sign." He advised looking closely at the website for signs it was reputable.

"People have got to learn to assess whether someone is genuine or not.

"Often with scam stuff, the quality of English is often an issue. If someone says they are from an English-speaking country, it's a sign maybe they are not really where they say they are, and what else is not true?"

A physical address was another sign of honesty.

But online shopping could be like gambling, Mr Doocey said.

"You are only seeing a photo, depending on what you buy. If you buy something and have been mistaken about size, it doesn't give you any legal right. It's like buying something in the shop without trying it on."

Also giving you added protection was buying from a New Zealand-based site.

"If you buy something from a New Zealand site, you still get the legal protection that you would have if you bought from a shop in New Zealand.

"Obviously it can be a little bit more difficult to enforce it, but still covered by the Consumer Guarantees Act."

More troubles could arise when buying from overseas as shoppers did not have that protection.

"It's extremely difficult to resolve a dispute with someone overseas.

"It's hard enough to resolve a dispute with someone in the same town let alone another country. You can forget about it.

"It's important to do what you can to protect yourself."

NetSafe executive director Martin Cocker said checking the company had a good reputation was crucial.

"Obviously, organisations like Amazon, for example, are well known and reliable retailers, but when you start to shop around more you will come across all sorts of sites.

"If you are getting off the beaten track, do a bit of research. That way you can pretty quickly establish on a search engine about a brand."<inline type="recurring-inline" id="1003" align="outside" enforce-sites="no" />

There were "plenty" of online vendors who were fakes just wanting to "take your money", Mr Cocker said.

"If you take your time you should be able to avoid those. Do a little bit of research, they should be quickly identifiable as not legitimate."

And if you did find a legitimate retailer, the most common subsequent complaints were credit card fraud and the item not being what you expected.

Mr Cocker advised using a card with a smaller credit amount or a debit card to avoid credit-card fraud.

He also warned that using an international auction site such as eBay had different ramifications than the New Zealand-based Trade Me.

"Although they look very similar and do similar things, Trade Me is based in New Zealand and has New Zealand members, and Ebay is based in other countries and has international members.

"Therefore you are not protected in the same way as if you are using Trade Me. New Zealand consumer protection law don't apply to an e-tailer in another country.

"If you get goods you didn't expect from a New Zealand retailer, you know that you have got some recourse.

"But the laws of whatever country you shop from might not give you so much come-back."

And even if the company is happy to take back goods, there was also the possibility of hefty freight charges.

"People purchase some very sizeable and expensive items from overseas. We might not be talking designer jeans but machinery."

- Bay of Plenty Times

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