Tips for safe online shopping

Shopping online does carry some risk, but so does shopping at brick-and-mortar stores. At least online shoppers don't need to worry about fender-benders in the parking lot, pick pockets at the mall, or getting the flu from all those fellow shoppers.

But the nice thing about shopping online is that by following some basic guidelines you can be reasonably sure you'll have a safe experience.

Secure your PC: The first thing you need to do is be sure your computer is secure. Trend Micro's education director David Perry, says that "bad guys these days are operating by planting a keylogger on your system that listens in, surreptitiously waiting for you to use your credit card or your bank password so that they can steal your money." So, even if you're dealing with a legitimate merchant, you're at risk if your computer is infected. Your best protection from these attacks is to keep your operating system and browsers updated and use a good and up-to-date security program. If you're getting or giving a Netbook or other PC for the holidays, make sure that security software is installed right away. Most security companies offer a free-trial version that will tide you over for a month or so, but be sure to subscribe so you get ongoing protection.

Click with care: You're going to be getting a lot of offers via e-mail this holiday season. While they might be legitimate, there is the possibility of some offers coming from criminals trying to trick you into giving your password to a rogue site or visiting a site that can put malicious software on your computer. Your best protection is to not click on any links--even if the message looks legitimate--but to type in the merchant's URL manually.

Know the merchant: : If you're not familiar with the merchant, do a little research like typing its name (and perhaps the word "scam") into a search engine to see if there are any reports of scams. Look for user reviews on sites like Eopinions.com. Look for seller ratings if you locate the merchant through a shopping search engine like Google Shopping . Google doesn't certify the integrity of the sites that come up in its searches, but if you see lots of seller ratings that are mostly positive, that's a pretty good sign. You're generally pretty safe with sellers that are affiliated with shopping aggregators like Amazon.com, Yahoo Shopping, Retrevo or BizRate. Microsoft's new Bing search engine offers a cash-back program with affiliated merchants.

It's a good idea to look for seals of approval from Truste or Better Business Bureau Online, but remember that a seal is only a graphic. It can be counterfeit. To be sure, visit the certifying agency's site to look up the merchant.

When you're about to enter your credit card, make sure you're on a "secure "site. The URL should have an https at the beginning (s for "security") and there should be a small gold lock in the lower right corner of the browser. This isn't an iron-clad guarantee, but still worth looking for.

If you're still not sure, look for a phone number and call them. Aside from eliminating the chance of a keylogger grabbing your information, you may get a little more assurance talking to a human being.

Pay by credit card: Credit cards offer you an extra level of protection including the right to "charge back" if you feel you're a victim of fraud. The credit company will investigate your claim and permanently remove the charge if fraud can be proven.

Also some credit card companies offer extra protections including extended warranties and protection against loss or theft. Federal law limits your liability for misuse of a credit card to $50 but many credit card companies will waive that limit. Unless you're very sure about the merchant, don't provide them with a checking account number and never disclose your social security number to online merchants.

It's also a good idea to check your online credit card statement frequently. Most credit card companies will display recent charges online within a few days of the actual transaction. While you're on your credit card company's site, check your interest rate. Credit card companies have been known to "adjust" rates (usually upward) for a variety of reasons.

Know the real price: Be sure you understand the actual cost of the item, including shipping, handling, and sales tax. That can have an enormous impact on the final price. Many merchants are offering free shipping during the holidays and some merchants that have both online physical stores will let you pick up the item in the store for free. In most states if you do business with a merchant that has a physical presence in your state, the merchant is required to collect state sales taxes. Although it's tough to enforce, some states expect you to self-report all of your online purchases and pay sales taxes when you file your state income tax return.

Happy returns: Be sure you understand the merchant's return policies including the deadline for returns and what documentation you'll need. In most cases, they won't refund the shipping charges and you'll have to pay to ship it back. Always keep your packing until you're sure you're not going to return it.

Read the privacy policy: The policy, according to the American Bar Association's Safeshopping.org, should disclose "what information the seller is gathering about you, how the seller will use this information; and whether and how you can "opt out" of these practices."

Enjoy the holidays: By paying attention to these tips, the odds of your being victimized by online fraud are pretty low --another good reason to be cheerful during the holiday season.