Paul Clitheroe
Paul Clitheroe

Shop carefully online this Christmas

OVER the next month or so we'll be dipping into our collective wallets to stock up on a vast array of festive season goodies, and many of us will buy at least some of our Christmas purchases online.

The internet has opened the door to a global shopping mall and increased opportunities to grab a bargain. But the web also offers plenty of chances to be ripped off.

The traditional rules of careful buying still hold true even in the online world. First and foremost, be sure to shop around. The holiday season can be expensive enough without paying more than you need to. When it comes to online auction sites like eBay, be careful that you don't get swept up in a bidding war and spend beyond your budget.

It's worth following some new rules too. In particular, aim to know who you are dealing with. Online auction sites usually provide feedback that can help you assess the reliability of a seller. It's not a failsafe system but it's a start, and if you come across several negative comments it may be better to give that seller a miss. If you're buying from a dedicated site, look for bricks and mortar details including a phone number and a street address. Make a note of these in case a dispute arises.

One challenge of buying online is that a product may not live up to your expectations. A picture doesn't always tell a thousand words in cyber space and it's easy to experience disappointment when your goods finally turn up. Items purchased from Australian suppliers are required by law to match their description, but the onus is on you to carefully check the details of a product including size and colour.

It's also worth pointing out that only local Australian businesses are bound by our Trade Practices Act and fair trading laws. There can be other downsides to buying from overseas websites. You could unwittingly purchase something that's illegal to bring into Australian including some animal and food products. Other goods like alcohol purchased from overseas could see you slugged with unexpected customs duty.

Be sure to check if you'll be paying for a purchase in a currency other than Australian dollars. If you use a credit card to pay, you could face foreign exchange charges.  Remember to allow for freight costs too, and double check that your purchases will arrive in time for Christmas.

It's when you come to paying for goods purchased online that special care should be taken.  Always look for an icon of an unbroken key or closed padlock in the bottom right-hand of your computer screen. This indicates a secure connection. Alternatively opt for a website address beginning with https//: rather than simply http//: as the 's' tells you the site is secure.

Using a credit card to buy online can offer some protection for consumers. Many card issuers offer a chargeback policy against sellers who fail to deliver the goods you've paid for with your card. Escrow services like PayPal can further add to the security of your purchases.

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.



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