Michelle Singletary is taking time off for the holiday. In her absence, we are offering this updated column from her archive, which originally ran on Nov. 24, 2021.
Online scams are particularly successful as more shoppers decide to skip the mall crowds and simply click for their holiday gifts.
I hate shopping — especially during the holidays. There’s the hunt for a parking space, the throngs of customers and the long checkout lines at stores with 10 lanes but only three cashiers.
The old phrase “Shop till you drop” becomes more like “Shop till you want to scream.”
And despite fears of a recession and rising consumer prices because of inflation, Americans intend to spend generously on holiday gifts in 2022, the highest in three years, according to a spending poll by Gallup.
U.S. adults surveyed in October 2022 estimated they will spend an average of $932. A third of them plan to spend $1,000 or more.
“One reason Americans’ holiday spending estimate is especially high this year could be that consumers are expecting to pay more for goods like clothing, electronics and toys after a year of high inflation,” according to the Gallup report.
Young adults are increasingly turning to TikTok, Instagram and other social media sites to shop for their holiday gifts.
With online shopping presenting more opportunities for fraudsters, here are some tips to protect yourself.
Look out for fake shipping text messages and emails. Don’t click on anything in a text or email. It could be legit, but why take the risk? Instead, go to the retailer’s website and type in your shipping or purchase code to double-check details about your order, the Better Business Bureau advises.
Be a guest. Lots of online shopping sites want you to create an online account to make a purchase. But to do so, you have to give up personal information to yet another database. If you end up dealing with a fraudulent site, you’ll be giving up information that could be used for future scams. Check out as a guest, so you don’t have to provide too much information.
Don’t be fooled by an offer of a gift card. Inflation has you worried about how far your money will go. But that email or text offering a $50 gift card is fake. They all are. Seriously. If you think it’s real, then go to the retail site online or call customer service to determine whether the offer is legitimate.
Scammers love gift cards, too. If you’re told to pay for an item with a gift card, you’re about to be scammed, according to the Federal Trade Commission. This is a favorite payment method for scammers because it’s like paying in cash. It’s nearly impossible to get your money back.
Look for a physical address. “Legitimate online stores should provide you with a physical address and working phone number in the contact section,” the Better Business Bureau says. If you have to hunt for a way to contact the retailer, that’s a red flag. Return and shipping policies should be clear and easy to understand, the BBB says.
Scammers have become so clever that it’s often hard to figure out what’s fake and what’s real. They read the news, too, and will play to your fears about inflation, delivery delays and certain hot items being out of stock.
Assume any holiday deal you receive by text or email is fraudulent. Don’t click on anything. Unless you’re willing to do some sleuth work, patronize known retailers. Your best defense is to be super paranoid about ensuring the season of giving doesn’t turn into a season of taking from you.
Pay with a credit card, not a debit card. You may be thinking you can avoid getting into debt by paying with your debit card. And that’s true, but a credit card purchase offers more consumer protections than a debit card. For big-ticket items use credit. (But make sure you can pay it off before the next billing cycle, to avoid interest charges.)
If you pay with a credit card for goods or services not received, you have certain rights under the Fair Credit Billing Act. Federal law limits your responsibility for unauthorized charges to $50, and even then, most credit lenders won’t make you pay anything. Charges for goods and services that weren’t delivered as agreed can be disputed as a billing error. You can ask your credit card company to temporarily withhold payment while it investigates a fraudulent purchase.
The rules governing your debit card fall under the Electronic Fund Transfer Act, which doesn’t have a not-delivered-as-agreed type of error that can be challenged, according to the FTC. If you pay with a debit card for a service or product that is never received, you have to work with your bank to dispute the charge that has already been deducted from your account. This could mean some time before the transaction is reversed.
Keep in mind your debit card is directly tied to your bank account, and fraudulent transactions can quickly do a lot of damage.
If you don’t have a credit card, use a prepaid debit card to purchase things online.
Watch for unrealistic shipping promises. Scammers know folks will be looking for retailers that can promise fast and free delivery. Don’t let your desperation to get a gift delivered in time for the holiday make you less cautious. Be a skeptic about shipping guarantees that seem too good to be true.