Cards And Unsecured Business

Careful what you click for
Beware when buying in Internet sales boom
By Alex Davis
alexdavis@courier-journal.com

There are 10 people on Fadden Holden's holiday shopping list this year, but don't look for the 28-year-old in any of the local malls.

With the same technique he uses for weddings and other special occasions, the east Louisville resident plans to buy his gifts on eBay, where he expects to find deals on sports memorabilia, magazine subscriptions and more.

"I've been using online shopping for a long time now," said Holden, who will soon graduate from the University of Louisville with a master's degree in mathematics. "It reduces your search costs."

A growing number of shoppers are getting that same idea -- even as a recent Better Business Bureau survey found that six in 10 of those who buy online acknowledge being anxious that their credit card information might be stolen during a transaction.

"Fears over the use and safety of personal information, including credit card numbers, telephone numbers, and home and e-mail addresses, are the main reasons online shoppers second-guess their decisions when making online purchases," said Charlie Mattingly, president of the BBB serving Louisville, Southern Indiana and Western Kentucky.

Yet, online holiday spending in November topped $10.7 billion through Monday, a 17 percent gain from a year ago, according to comScore, which tracks online consumer trends.

And that number is expected to get a big boost Dec. 10 -- that's Green Monday, which falls on the second Monday of December, and is considered the last safe day to ensure shipping by Christmas.

That's "when people spend the most amount of money online," said Jamie Diamond, a spokesman for Symantec, the San Francisco company responsible for Norton Antivirus computer software.

In all, nearly three-fourths of Americans with Internet access will do at least some of their holiday shopping online this year, according to a recent poll from Zogby Interactive. And online marketing consultant Forrester Research estimates holiday shopping sales on the Internet will rise 20 percent this year.

UPS, which has its main air hub in Louisville, measures the rise in online shopping by counting the number of customers who track shipments by visiting UPS.com.

In 1995, 100,000 users checked the status of freight that way. This year, UPS expects 150 million inquiries during the peak the week before Christmas, said company spokesman Mike Mangeot.
Cautious with credit

Experts caution that fears about credit card theft are justified, whether you are shopping online or at the store.

But the credit industry has taken broad steps to combat the theft of consumer information in recent years.

For example, American Express, Discover, Mastercard Int'l and Visa last month approved standards that soon will prohibit any software handling credit or debit card data from storing transaction information -- including personal identification numbers, or names and bank data saved to a card's magnetic stripe.

Such measures are promulgated by Boston's PCI Security Standards Council, a private company formed by all the major credit card companies in late 2006.

Instead of each company setting Internet security and store security rules on its own with vendors, PCI acts as a clearinghouse for security standards accepted by the major credit providers.

"The whole reason for us being (here) is so we can set standards that can protect consumer or payment card data," said PCI spokesman Glenn Boyet.

On the law enforcement side, Internet auction fraud prompts nearly half of all complaints to the Internet Crime Complaint Center or IC3, a partnership between the Federal Bureau of Investigation and the National White Collar Crime Center.

The BBB advises that shoppers protect themselves before buying by checking out the reliability ratings or the BBB rating of any online seller.

CyberSource, which provides retailers electronic payment services, says the fraud rate is holding steady at about 1.4 percent of all online sales.

But consumers should use the same care in shopping online that they would take at malls or other venues, said Reanna Smith-Hamblin, spokeswoman for the BBB in Louisville. That means guarding personal information and researching the company's background, she said.

"Shop with people you know," she said. "If it sounds too good to be true, it probably is."
Taking the online leap

Online retailers say that while shoppers might say they are nervous about Internet crime, it's clear that a growing number are willing to set such concerns aside and punch their credit card account numbers into Web sites.

"There's a growing amount of trust within online retail," said Marc Cowlin, spokesman for CafePress.com, a California company that employs about 300 people at its warehouse in Louisville.

Cindy Mann, 42, of Simpsonville, said she expects to spend about $3,000 on holiday gifts this year -- about 85 percent of that online.

She said she takes precautions -- for example, using only her American Express card because it offers theft protections. And she said she "wouldn't dare ever" use a debit card because that has information about her bank account.

With security tools improving regularly, responsible companies can build a strong reputation with customers, said Cowlin, whose company allows users to design and personalize their own merchandise, such as T-shirts and coffee mugs.

Even so, some shoppers remain shy about opening their wallets online, even if they're savvy with a computer.

For example, Tracey Goff, 37, an educational consultant from Elizabethtown who was shopping Friday at Oxmoor Center, said she never buys online -- partly because of safety concerns but also because, "I like to see it, feel it, touch it."

But Meagan Deeley, 22, of Mount Washington, said that while she works at Von Maur, she expects to do half of her holiday shopping online this year. "It's a big benefit because you don't have to be out in traffic," she said, adding that she relies on her computer's Norton antivirus protection and always checks a Web site's reliability rating.

And Maurice Rhodes, a 20-year-old package handler who lives in Louisville, said he routinely buys such things as Air Jordan shoes on eBay.

"I never worry about security," he said, "I just do it."

Meanwhile, sitting outside a coffee shop near her home in the Highlands, Amanda Baerwalde said she plans to do all of her holiday shopping at small businesses in her neighborhood -- but not out of any great concern about security.

She goes online to buy airplane and concert tickets but said that for other goods, she'd rather walk a couple of blocks and buy in person.

"When everything's so concentrated," she said, "I don't see the point of looking elsewhere for it."

Reporter Alex Davis can be reached at (502) 582-4644. Reporter Jere Downs contributed to this story.