The 1-2-3 Money Plan Part 11

How to Buy Online.

Buying online can be a great idea. What's more convenient than sitting at your computer in your pajamas, clicking the computer mouse and having the item show up on your doorstep a few days later?

Virtually all retailers that have brick-and-mortar stores also have online stores. If you haven't tried online shopping, give it a shot, at least for a small purchase. You're likely to become hooked on how easy it is.

How to Buy Online, 1-2-3.

1. Prefer commodities.

2. Consider s.h.i.+pping cost versus sales tax.

3. Use a credit card.

For those of you who are experts at shopping online, I'm sure you'll excuse me if I go over some basics for people who have never tried it.

Online shopping is similar to catalog shopping, in that you choose items you want, pay for them, and they're s.h.i.+pped to you. With online shopping, you usually identify items you want to order by clicking on a "buy" b.u.t.ton and placing them in a virtual shopping cart. Then, as if you were in a real store, you proceed to a "checkout" screen. There, you provide payment and s.h.i.+pping information. And you're done. Often, you'll get an e-mail that confirms the transaction.

Of course, the top question asked by shoppers who haven't made a purchase on the Internet is, "Is online shopping safe?" To which, I'd have to respond, "Compared with what?"

If some computer hacker were to somehow intercept your credit card number in mid-transaction-highly unlikely-so what? When the thief makes an illegal purchase, you call your credit card company and cancel the card. The bank will issue you a new card and waive any fraudulent charges. You take just as great a risk every time you hand a restaurant waiter your credit card and he disappears with it to a backroom cash register. How hard would it be for the waiter to copy down the number and use it elsewhere?

Most online transactions are encrypted, meaning they're secure. When checking out, look at the Web address in your browser. It's secure if it says https: instead of http:. You can also look for a padlock icon in your Web browser, which signifies a secure site.

If you're worried about not getting merchandise you paid for, you can stick with merchants you've heard of. And, as discussed later in this section, if you use a credit card, you probably have further consumer protections offered by your card company.

If you're worried about your name, address, and telephone number being misused, well, you might be shocked at how easy it is to get that information anyway. I'm not saying that's OK; just that online shopping doesn't add much to that risk.

1. Prefer Commodities.

For the uninitiated, online shopping is best for products that are commodities, in the sense that they are identical no matter where you buy them. They're widely available and it makes no difference which copy of the article you buy.

Sure, you can buy shoes and custom-made furniture online, but you don't get to touch, try on, and thoroughly examine online products. That's a drawback for some purchases.

Early on in electronic commerce, books on Amazon.com were among the first products sold. They were ideal to purchase on the Internet because each copy of a new book is exactly the same. The same was true of music CDs.

In a narrower sense, the Internet can be good for the opposite-finding uncommon things, such as antiques and oddball merchandise. That's because the marketplace is so much larger than you will find in any one region of the country.

But especially if you're just getting started with online shopping, opt for commodities.

QUICK TIP.

When buying from an unfamiliar site, look for an "About Us" page, and do a quick Google search on the retailer's name, looking for other customers' experiences. Some comparison s...o...b..ts rate retailers. If the retailer has a privacy policy, all the better.

2. Consider s.h.i.+pping Cost Versus Sales Tax.

The biggest drawback to ordering online is the item has to be s.h.i.+pped to you. That means you'll have to wait a few days, which a lot of us aren't very good at. More important, you often have to pay s.h.i.+pping and handling charges.

You'll find some listings have a very low price for the product, but exorbitant s.h.i.+pping fees. This happens a lot on auction site eBay.com. Bulky and heavy items, such as televisions, can cost more than $100 to s.h.i.+p.

In the end, all you should care about is the total price. So, always add together both components of an online purchase-the purchase price, plus s.h.i.+pping and handling. Often, you'll find online prices to be so much lower that it's still cheaper to buy online, even if you have to pay for s.h.i.+pping and handling.

One advantage of online shopping is you won't necessarily have to pay state sales tax on the purchase. If the retailer has no locations in your state, it is not required to collect sales tax on checkout. Technically, most states require you to pay sales tax on Internet purchases, presumably by keeping track of purchases and accounting for the tax on your state income tax form. But almost n.o.body does that, which essentially makes Internet purchases from out-of-state retailers cheaper.

I'm not saying that avoiding state sales tax on Internet purchases is right or wrong. I'm just saying that's how it is. Still, this is a fluid issue, as state governments try to fill their coffers by collecting sales-tax money from Internet sales. So, stay tuned.

3. Use a Credit Card.

Use a credit card for online transactions because the consumer protections are so much stronger than for debit cards. This is especially true if you're dealing with unfamiliar sellers.

A big benefit of using a credit card is its dispute service. If you have a problem with the Internet merchant and can't get it resolved, pa.s.s the dispute on to your credit card company and allow them to battle the retailer for you.

Further, if someone at that retailer misuses your card and starts making purchases with it, you're not liable for them. By federal law, you're liable for $50, but all the major credit card companies limit your liability to zero.

Of course, these protections apply whether you're shopping online or in a real store. But online you have a greater chance of dealing with an unfamiliar retailer. Credit cards are a buffer between you and a strange merchant.

For more about credit cards, see Chapter 6, "Credit When Credit's Due."

One exception to this rule is if you don't own a credit card and don't want to. Maybe you've gotten into trouble before running up balances you had trouble paying off. In that case, you're left with using your debit card that acts as a Visa or MasterCard.

Other intermediary forms of online payment, such as PayPal and Google Checkout, can link to credit cards and bank accounts. But they're not widely available as payment options.

QUICK TIP.

Get an autofill program. These little computer programs will fill in your name and address information and some even store your credit card information, so you don't have to fetch your card each time you buy something online. Just as valuable, these programs automatically fill in your logins and pa.s.swords to all the different retailers you buy from. There are some free autofill programs available, often as plug-ins for Web browsers, such as Google Toolbar, toolbar.google.com. I shop online so often, I bought a robust form filler called RoboForm Pro, www.roboform.com (Windows only).

Coupon Codes and Rebate Portals.

Consider these two shopping scenarios that ill.u.s.trate ways to save money while shopping online.

Coupon Codes.

Imagine standing at a store checkout. To get 10 percent off your order, all you would have to do is step away from the cas.h.i.+er for a moment and look on a nearby shelf for a coupon. Would you bother?

That's essentially what you can do while shopping on the Internet. Get in the habit of searching for discount codes, also called promotional codes or coupons.

When buying online, you place items in a virtual shopping cart and then go through a checkout procedure. While checking out, the Web site often will ask if you have a discount code to enter. These codes are generally a series of numbers and letters that unlock goodies, such as a percentage discount on your order, dollars off your purchase, and discounted or free s.h.i.+pping.

If you don't have a discount code, don't just ignore the promotional code box. Go code hunting.

Open a separate window in your Web browser. Call up a few of your favorite Web search engines to find codes. Type in the retailer's name, the word "code" and other terms such as "promotional," "coupon," and "discount." You can also try code aggregators, such as CouponMom.com, CouponCabin.com, FlamingoWorld.com, and CouponMountain.com. If you find a code, return to your checkout browser and type or paste the found promotional code into the box. The code might have expired, but there's no harm in trying it. The worst that happens is the retailer rejects the code. If you type in a correct code, the discount will be applied to your order.

A few minutes of searching could yield worthwhile savings, such as 10 percent off, free s.h.i.+pping, or $15 off an order, for example.

Rebate Portals.

Imagine you're standing at the threshold of a retail store, but you can get a 10 percent discount if you walk through another entry door. Would you do it?

That's what you can do by shopping through rebate portals.

A shopping portal, or entrance, is a separate free Web site that has an arrangement with retailers. Retailers pay a commission to portal operators in return for sending Internet consumer traffic to the retailer's site-a kind of referral fee. When the consumer makes a purchase, the retailer pays the portal a commission. A "rebate" shopping portal goes a step further and shares its commission with the consumer.

To use a rebate portal, sign up for free at the portal's site. Then, instead of making a purchase directly at a retailer's Web site, go to the portal to see whether it is affiliated with that retailer. If so, click the link to enter the retailer through a side door, of sorts. Then, proceed through the online checkout as you normally would.

Behind the scenes, the retailer knows the portal sent you. It pays a commission to the portal. Then the portal shares the commission with you by crediting your portal rebate account. It's all electronic and automatic, akin to a rewards credit card.

A typical rebate to you would be about 5 percent of the purchase price, but it can vary widely, even surpa.s.sing 10 percent for some retailers. Opt for cash rebates instead of points or other rewards.

Popular rewards sites include FatWallet.com, Ebates.com, Jellyfish.com, and QuickRewards. net. Portals that donate your rewards to college savings plans include Upromise.com, BabyMint. com, and LittleGrad.com. If you're having trouble choosing, go with Ebates.com. Learn more at CompareRewards.com.

Fun Tangent: Eyegla.s.ses Online.

You can buy almost anything online nowadays. One of my favorites is eyegla.s.ses. Weird, right?

The short story is my first pair of gla.s.ses purchased online cost me $8. Actually, with s.h.i.+pping and a clip-on sun shade, they cost $16.90 delivered. I see great with them and they look good too. In fact, it's a toss-up which I like more, these gla.s.ses or the ones I paid about $300 for from a chain-store optician.

I ordered them from ZenniOptical.com.

Granted, there are no frills with ordering gla.s.ses this way. They arrived in seven business days in a padded envelope in a simple hard-plastic case.

There are a few minor drawbacks: 1. My written prescription from my eye doctor did not include a measurement for PD, pupillary distance, which is basically the distance in millimeters between the centers of your eyeb.a.l.l.s. You need this measurement to order online. I measured my PD in a mirror. I'm sure that's not the way the eye doctor would recommend, but it seems to have worked.

2. You might have to have the nose pads and arms of the gla.s.ses adjusted if they don't sit right on your face. This might cost you a few bucks, but many optometrists will do it for free.

3. The clip-on sun shade isn't custom-made for the gla.s.ses, but it fits and covers the lenses well.

The cheap gla.s.ses have thinner metal and might not last as long. However, doing the math, I can buy 16 pairs of ZenniOptical gla.s.ses for the price of one discounted pair at a popular retailer. At these prices, you can own several different styles of eyegla.s.ses for a fraction of the usual retail price.

I was so pleased I followed up by ordering rimless bifocals with every option available, including antireflective coating. That surely would have cost $500 at an optician or eye doctor. My cost: $68. My 10-year-old son now refuses to wear his $300 eyegla.s.ses, and insists on wearing his $8 Zennis. He says he just likes them better. Go figure.

By the way, a different Web site, EyeBuyDirect.com, also sells eyegla.s.ses for about $8.

How to Buy Used Stuff.