By Rob Pegoraro
Special to WashingtonPost.com
Nov. 29, 1996

Just thinking about it can make your head ache and your feet throb: Scuttling up and down the aisles of department stores in a mall the size of Texas, trying to find The Perfect Gift for each of the dozen people on your list.

But if you'd only spend more time in front of your computer, you can avoid the crowds, the parking lots from hell and the lines.

All you need to shop on the Internet is your credit card, a little patience and eight megs of RAM. That's to say, in most of the important details, buying things over the World Wide Web is no different from buying over the phone: The selection and the prices usually beat what's at the mall, and you don't have to leave your chair to take advantage of the "Incredible Bargain! Only $29.95!" calling for your wallet.

How It Works
Safely getting the electronic coins out of your credit card and into a store's cash register involves a lot of complicated technology, but most of that stays invisible to you. As a user, all you need is a Web browser that supports a type of encryption technology known as Secure Sockets Layer (SSL). On Windows and Macintosh, SSL is in use with Netscape Navigator 1.1 and above, Microsoft Internet Explorer 2.0 and above and America Online 3.0. All require eight megs of memory to avoid painfully slow performance.

“I can't always find my catalog, but I can always find my computer.” — Lands' End customer

An encrypted transaction, in which sensitive data (such as a credit card number) is encoded into illegible gibberish before transmission, will be preceded by an advisory notice or a visual cue.

On Netscape, you can easily tell if you have a "secure" connection by looking at the key icon at the extreme lower left hand corner of your screen. Since the page you're reading now isn't on an SSL server, you should see a broken key (the key is broken, so it's not safe to pay -- get it?). If that key changes to blue and appears whole, your information will be encrypted before it's sent. Unfortunately, the key won't always appear whole on secure sites. Most secure sites post a notice on their home page telling customers about their security measures. If it's a company you trust, you can take them at their word.

Note that we've only mentioned credit cards. This is because hardly any online merchants will deal with other forms of payment, such as checks. Nor should you. If the deal goes sour, using a credit card gives you a much better chance of recovering your payment.

What's the Big Deal?
So what is the rush to adopt a shopping technique that requires thousand-dollar hardware? Well, it's convenient to stressed-out customers: "There [are] people who just don't have the time," explained Anna Schryver, a spokesperson for Lands' End. "[One] customer said, I can't always find my catalog, but I can always find my computer."

Online commerce will total $1.2 billion by the end of 1996. — Jupiter Communications, market analysts

More importantly, selling online opens up possibilities unheard of for offline retailers. "We can offer a much larger selection," said Jeff Bezos, CEO of Amazon.com, a Web-only bookstore stocking over a million titles. And Amazon has lower operating costs than any physical bookstore: "We don't have to warehouse books on expensive real estate," Bezos noted.

With the help of computerized tracking of what particular customers order — and what items they look at in a Web-based catalogue — an online retailer can also have a more intimate relationship with its customers than an offline one, even if it never speaks to any of them. "When you start to have personalized profiles of your biggest customers, your marketing dollar is going so much further," said Nicole Vanderbilt, an analyst with market researchers Jupiter Communications. Jupiter estimates that online commerce will total $1.246 billion for this year. Other researchers' estimates are lower.

What You Shouldn't Worry About
A ridiculous amount of press coverage of online shopping to date has zeroed in on the dangers of sending your credit card number over the Internet. What those reports generally fail to mention, however, is that there is no credit-card crime wave online.

"There really has not been much indication that transmitting your credit card number over the Internet is particularly risky," explained David Medine, associate director for credit practices at the Federal Trade Commission. "Some would say that it's far riskier to give it to a waiter at a restaurant who takes it away." Or, for that matter, to place a catalogue order with a cordless phone.

If there is any online credit card theft going on, it's close to zero. A spokesperson for AT&T's Universal Card division, which recently began letting its customers access their account data over the Web, could report no cases of cards compromised due to Web shopping.

“People are safer dealing with well-known and trusted merchants.” — David Medine, FTC

When to Worry
Because the Web makes it so easy for anybody to set up shop, new merchants are arriving all the time. And just like in the real world, not all of them will be honest dealers. The same rules apply online as off: Know who you're dealing with. And offers that look too good to be true almost always are.

"People are safer dealing with well-known and trusted merchants," the FTC's Medine advised. "Make sure they identify themselves and provide a real-world address." To help make it easier to tell the good from the bogus, two Net-commerce industry groups, shop.org and eTrust are launching programs that will let qualified sites place a "stamp of approval" logo on their pages. The Washington-based National Consumers League tracks reports of Internet-based fraud at its Web site and via its toll-free number, 800/876-7060.

If you do think you have been ripped off, you first must notify your credit card company in writing within 60 days and specify the amount and date of the transaction. If you and your credit-card company are unable to work things out with the merchant in question, you may have to go to your local consumer's advocate or state attorney general and file a complaint -- or you may need to retain an attorney and file a civil suit yourself.

But if the reports the FTC receives are any guide, the odds of any of this happening are as low online as off, if not lower. The Net's ease of access makes it easier for crooks to open up shop, but it may make it even easier to expose them. As the FTC's Medine observed, "The one tremendous advantage of the Net is that word about problems can spread very quickly."

WashingtonPost.com Producer Dan Pacheco contributed to this report.