Online Shopping Guide - Safety and Security Tips

Buying online is often the best way to not only find what you are looking for but also to find the best price. Online shopping has its risks including credit card fraud, stolen identities, and other unpleasant troubles. Shopping online safely involves being knowledgeable about threats, trusting only known retailers, protecting your privacy, and keeping good records. Often, however, the best price on an item might be from a “new” or “unknown” retailer. What to do? Well, now we have two great options for shopping securely online: Google Checkout and/or PayPal augmented with a security key and virtual debit card.

Google Checkout - Easiest Option

Google Checkout provides a convenient and safe way to shop online from select retailers. By serving as an intermediary between yourself and the retailer, Google can shield you from potential bad retailers. The fraud protection policy covers you against unauthorized purchases made via Google Checkout and by not sharing your email address with the retailer Google Checkout can protect you from potential spam.
If you already have a Google Gmail account signing up for Google Checkout is easy. Simply visit the Google Checkout homepage and enter your Gmail username and password. If you don’t have a Gmail account, I highly recommend signing up for one even if you just forward all mail to your existing email address. Find out why Gmail is simply the best online mail service here.

Once you have signed up for Google Checkout you can start shopping via Google Products search which lists the best prices for your desired product. Now simply click on the “show Google Checkout items only” button (see below) to show retailers that support Google Checkout. After adding your desired items to the cart at the retailers site, proceed to checkout and you will see the option to pay via Google Checkout. the retailer never gets your credit card number Google will now pay the retailer and charge the credit card linked to your account and can even forward shipping and notification emails from the retailer to you so that the retailer never gets your credit card number or even email address. Want to find out more about the process you can take a virtual tour of Google Checkout.

PayPal - Now even more secure!

When PayPal first became popular I was very very skeptical of the service. When Ebay bought PayPal my trustmeter went up slightly but the extreme amount of phishing attacks targeted at PayPal users made me wary. Now, however, PayPal has introduced a new security feature and a new payment option which make the service extremely secure and valuable.

PayPal - Security Key

The new security feature is a security key. Find out more details about this product from PayPal’s security page. In short the security key is a keychain dongle which generates a six digit number that changes every 30 seconds. When you want to sign-in to PayPal or make payment via PayPal you would look at the security key to get the current six digit number and then append this number to your existing password. two-factor authenticationThis provides two-factor authentication via “something you know” (your password) and “something you have” (your security key). To learn more about authentication factors visit listen to the Security Now podcast or read this Wikipedia article. This omits only the “something you are” authentication factor such as a finger print or retinal scan. I can’t see PayPal requiring a retinal scan anytime soon, however, two-factor authentication is much much more secure than single factor. The security key costs only $5.00 and can be ordered from within the PayPal Security Center webpage.

PayPal - Virtual Debit Card

The new payment option is a service that allows a PayPal customer to generate a temporary “virtual” debit card number via a desktop application (currently windows only - Aug, 2007). This virtual debit card number can be used in place of a real credit or debit card number and is valid only for the single transaction and only for the specified transaction amount. So even if a malicious person/merchant obtained this number it would be completely useless to them. To sign up visit the PayPal Security Center webpage.

Other Tips

If you aren’t interesting in the above options, choose a single credit card and use only that card for your online shopping. Also never enter your credit card number on a webpage that doesn’t start with https:// - this indicates a secure http connection.

Update - September 1,2007

I found another great guide to online shopping and security here from the “digital tirades of seamonkey420″ blog.