Presented by Sara Frank-Hepfer, CFP®, AAMS®Looking for power tools? A vintage Chanel purse? A living-room sofa? Millions of shoppers are bypassing brick-and-mortar stores, as well as their respective websites, in favor of purchasing such items from individual online sellers. For many people, sites like Craigslist and eBay offer a chance to save on everyday items and luxury products, both new and used—all from the comfort of their own homes.
Yet, while online shopping may be a convenient way to find deals and one-of-a-kind items, it’s important to protect your identity and financial information, particularly when dealing with individual sellers. Before you purchase anything listed on an online classified ad, auction, or marketplace site, keep the following precautions in mind.
Online classifieds
On classified sites run by newspapers and popular venues like Craigslist, sellers tend to offer used items and may be open to negotiation. Since most transactions are done in cash, there’s little buyer protection.
To stay safe:
• Never wire funds. If a seller asks you to wire payment using Western Union or MoneyGram, you’re likely dealing with a scammer.
• Safeguard your personal information. Sellers on Craigslist and similar sites don’t need your personal financial information, such as credit card numbers. To keep your information safe, it’s best to pay with cash.
• Don’t go it alone. Always take someone with you when meeting a seller. Be sure to tell a friend or family member where you’ll be, and take your cell phone with you.
• Pick up in a public place. Choose a busy location to meet the seller. If you’re picking up the item at the seller’s house, it’s particularly important to have a friend or family member join you.
Online auctions
Online auction sites like eBay let you view and bid on products from around the globe. Some sites also allow you to buy items outright instead of bidding.
To stay safe:
• Read the fine print. Before you enter a bid, be sure to review the entire listing, as well as the sales policies of the auction site. Remember: you win, you pay. Once you’ve won an auction, you’re obligated to complete the transaction.
• Check out buyer feedback. Auction sites let buyers post feedback on their purchases, which can give you insight into a seller’s business practices. Be sure the seller has a high rating before making a purchase. If lackluster feedback prompts you to hesitate, it’s probably best to look for the item elsewhere.
• Pay with a credit card or PayPal account. Using a debit card linked to your checking account may not be safe, as most debit cards don’t offer fraud protection. You may also want to consider buyer protection; eBay offers such a plan that covers many items purchased on its site.
• Beware of fraudulent e-mails. After you’ve made a purchase, be wary of any unusual e-mails you may receive. Avoid opening suspicious messages or clicking on links they contain.
Online marketplaces
Online marketplaces such as Amazon, Etsy, and Overstock are one-stop shops where you can find anything and everything. Searches on these types of sites may pull up products new and used, both from companies and from individual sellers.
To stay safe:
• Know what you’re purchasing. Though they’re often cheaper, used products may not be in perfect shape. Don’t neglect to read all the product details, as well as individual sellers’ return and refund policies.
• Look for positive seller feedback. As with online auctions, be sure to read sellers’ ratings and keep your eyes open for red flags.
• Pay safely. Pay for purchases using a credit card or PayPal, which offer greater buyer protection than other methods.
• Ensure a secure checkout. Before you purchase an item, look for HTTPS at the beginning of the web address on the transaction page, which indicates a secure connection. Addresses that begin with HTTP only aren’t secure.
Don’t pay with your identity
When shopping online, it’s easy to get caught up in the excitement of finding a great deal—or what seems to be one. But don’t let the thrill of bargain-hunting override common sense or cause you to jeopardize your sensitive information. Be sure to read the details on items you’d like to buy and to use caution when making purchases online, particularly if you’re dealing with an individual seller.
Sara Frank-Hepfer is a financial consultant located at Financial Technology, Inc., 1500 Abbot Road, Suite 150, East Lansing, MI, 48823. She offers securities as a Registered Representative of Commonwealth Financial Network®, Member FINRA/SIPC. She can be reached at (517) 351-8600or at frank@financialtec.com.
© 2016 Commonwealth Financial Network®
This was printed in the December 25, 2016 – January 7, 2017 edition
