WSJ - December 5, 2007 - D1, D8
Several WSJ articles cover the good, the bad and the ugly of online holiday shopping.
The Good
Online payment systems are rolling out incentives to capture part of the estimated $28 Billion in online shopping during the 2007 holiday season. These services are becoming widely available so some of these offers could really translate into big savings.
- PayPal partners with retailers such as Barnes & Noble, eToys, and Blue Nile to offer up to a 20% credit on purchases
- Bill Me Later subsidizes shipping costs (always a customer pleaser) and defers billing at retailers like eToys Direct and KB Toys
- Even Google Checkout has gotten into the act with free shipping on orders of $50 or more with some merchant partners and is offering United or Continental Airlines miles for purchases
The Bad
Online shopping increases during the holidays and that provides even more opportunities for criminals to steal data and defraud consumers. With $198.4 Million in fraud losses in 2006, it’s clear that cyber criminals aren’t going away.
The Ugly
It’s 2007 (more than a decade since the rise of e-commerce) and still no widely available online payment system offers real protection against fraud, identity theft and privacy invasion.
- PayPal offers some anonymity when buying online (which is a good step forward), but they have been notoriously lax in protecting against fraud and truly serving customer interests. (Just Google “PayPal fraud” to get up to speed on some of the problems.)
- Bill Me Later simply changes the information that’s at risk. Rather than exposing your bank card number, address and name, you share the last four digits of your SSN, your DOB and your name. Here we see convenience trump security.
- Regular Bank Payment Cards (debit and credit cards) provide good fraud protection ($50 max liability on credit cards and good, but not as comprehensive fraud liability protection, on debit cards), but these cards clearly don’t protect your privacy and offer no real safety from ID theft.