Be smart when buying cool stuff online

Published November 5, 2006

The world of online shopping is an ever-evolving one - and boy, can it be confusing. If you buy from eBay, Walgreens, iTunes or Dell on the Internet, you'll have the option of opening a PayPal account and making your payment through PayPal. If you shop on Amazon.com, you can buy from third-party sellers that have nothing to do with Amazon.com:

1. Understand how PayPal works. When you open a PayPal account, you authorize PayPal to take money out of your bank account or charge online purchases to your credit card. Merchants never see your personal information; they just receive money from PayPal.

2. Decide how you want to pay. PayPal's default maneuver is to withdraw money from your bank account. If you want to pay with your credit card, you must remember to adjust the payment setting.

3. It's better to use your credit card. That way you'll be able to dispute charges and potentially get them reversed if anything goes awry.

4. Don't respond to unsolicited e-mails. Have you received an e-mail message that appears to be from PayPal or another legitimate-looking outfit, asking you to click on a Web link and update your account information? Never, ever do that. This is one of the biggest online scams.

5. Take the initiative. If you're concerned that PayPal or another institution might really need to reach you, contact them directly - but not via the e-mail message you received. Since PayPal's toll-free number can be notoriously hard to find, here it is: 1-800-854-1366. Its non-toll-free number is (402) 935-7733.

6. Type in Web site addresses yourself. By doing this instead of simply clicking on a link that gets sent to you, you'll dramatically increase your chances of reaching a legitimate site.

7. Look for signs of security. When you reach the point of payment or of sharing your personal information, the Web site should be secure. The address of a secure site contains an "s" after the "http:", like so: "https:".

8. Don't pay outside the system. Fraudulent sellers will ask you to ignore the regular online-shopping-cart method of payment and wire them money. Or, they may want you to place money in what will turn out to be a phony escrow account.

9. Check the seller's reputation. Whether you're shopping on eBay, Amazon.com or another site that connects you with independent sellers, opt for a seller who has sold at least 10 items and who has a high satisfaction rating. Also, read customers' feedback about the seller.

10. Know where to complain. Report fraud to the retailer or company that's been "spoofed" and to the Anti-Phishing Working Group (reportphishing@antiphishing.org) and the Internet Crime Complaint Center (www.ic3.gov).

Sources: Wall Street Journal www.wsj.com ; Amazon.com (www.amazon.com ); PayPal (www.paypal.com); Consumer Reports (www.consumer r eports.org); Internet Crime Complaint Center (www.ic3.gov); Anti-Phishing Working Group (www.antiphishing.org ).