The Pros and Cons of Online Shopping

• Hassle-free sales
• Product reviews
• Typically free shopping

• Return fees
• Sales tax and other fees
• Higher chance of fraud

Pros of Online Shopping

Smooth Sales

Searching for deals on Google is undoubtedly one of the biggest advantages of ecommerce: you avoid sellers and sometimes insistent crowds, all from the comfort of your sofa. Plus, it's easier to search for the latest sales while browsing the shelves.

Product review

Online reviews make it easy to get inside information about the product or store that interests you. Nuuly's clothing rental service, for example, allows its customers to add photos of themselves using products in written reviews, allowing future customers to make smart, autonomous purchasing decisions.

It is also beneficial for small businesses. Eighty-seven percent of consumers read online reviews of local businesses, according to the 2020 Local Consumer Rating Survey from marketing consultancy BrightLocal.

Free shipping

Where applicable, free shipping is a key factor for online shopping. Free shipping drives more sales, according to a recent survey by BigCommerce of Austin, Texas. 84% of respondents specifically reported that they made a purchase because free shipping was offered, and 77% of consumers said they abandoned the purchase as a result of "poor" shipping options.

Amazon Prime is an attractive service to many due to its guaranteed free two-day shipping.

Cons of Online Shopping

Return fees

Many return policies generally require you to pay refunds and replacement fees, even for faulty items, according to Michelle Madhok, an online shopping expert and founder of online trade publication SHEFinds Media.

If a company does not provide a return shipping label, you will have to pay out-of-pocket costs for a postal service.

When you use a credit card to shop online, keep an eye on your spending. By constantly reviewing your monthly statement and maintaining your receipts, you will be able to better control your spending habits and also be aware of possible fraud or incorrect charges.

Sales tax and other fees

Be prepared to pay for convenience. Not all products purchased online are taxable, but items such as jewelry and clothing in general are. Additionally, international and interstate shipping costs can make purchases more expensive.

When you make a purchase on Etsy, the popular e-commerce site for makers and creators around the world, for example, sellers must pay a 5% transaction fee that can be added to the price of the purchased item.

Higher probability of fraud

Be wary of sites that ask for more personal information than just your name, address, and credit card number. According to the Federal Trade Commission (FTC), there were 4.8 million reports of identity theft and fraud in 2020, the majority of which occurred online.

If an online site asks for something like your social security number or bank account number, this is usually a red flag that the place you are buying from is not trustworthy and you could be the victim of fraud.

Tips for Making the Most of Online Shopping

Online shopping thrives on the desire for convenience, but can often be overshadowed by failure. To ensure that your ecommerce experience is positive, consider the following actions.

Direct Purchase

One of the downsides of not visiting a store in person is that you create a digital relationship with a business rather than having a personal experience with the store owners. That is why it is important to know who you are buying from and to identify all the necessary details about the product you want to buy.

Regardless of the service you use, read the fine print for return policies, taxes, and any other fees. Often times, if you buy directly rather than through a third-party source, you can reduce the cost of additional fees.

Protect yourself from fraud

If you suspect suspicious activity on your account, check with your bank first to verify it. Then, contact the FTC, the Better Business Bureau (BBB), or your state consumer protection agency to file a complaint.

Madhok always recommends paying by credit card online, as credit cards often offer zero liability policies that do not hold you liable for most fraudulent charges.

Worth comparing

Logging sales alerts on sites like eBay and ShopStyle, for example, lets you know when an item's price changes, making it easy to compare purchases and save money. Also, don't assume that Amazon always has an item for less than its competitors. "During the coronavirus, things like toilet paper became more expensive through third-party vendors," Madhok said. "Better go to Costco for these things."

Build a relationship with companies

If there are certain companies that you constantly trust, support, and buy from, it's best to stay connected and maintain a relationship with them. Participating in email newsletters or rewards programs, for example, will give you initial access to offers and discounts on certain products. Rewards programs tend to increase customer loyalty and retention, which benefits all parties involved, as well as your wallet.

Reduce your waste

Multiple packages mean too much cardboard, a huge downside to online shopping that has a negative impact on the planet. Madhok predicts that consolidated delivery services will continue to be a trend, like the recently launched Olive, which consolidates orders from your favorite retailers into a reusable box.

Tips to save money when buying online

In addition to protecting yourself against fraud and identity theft and returns, you can adjust your habits and improve the ways you save by shopping online.

Duty free shop when possible

Even if you're a non-resident, 16 states will have tax-free shopping weekends by 2021, allowing you to purchase essentials like clothing, school supplies, and shoes at no additional charge. It's also worth keeping an eye out for Amazon vendors, who may charge taxes in addition to possible shipping fees, Madhok said.

Use coupon-based apps

Using your credit card in combination with a rewards portal, or at stores that offer cash back incentives, can be multiplied when combined with a money-saving app like Rakuten or Cashback Monitor, according to Madhok.

She recommended signing up for as many item-specific rewards programs as possible, like Ibotta, which offers cash-back rewards when you buy food.

Taking advantage of credit card rewards programs at the end of the month can earn you discounts on the products and services you use the most, like coffee at Starbucks.

Track your purchases and returns

If you're the type of shopper who loses track of your online purchases, apps like Slice can track every purchase you make online, so you can see your deliveries in real time on a map.

It can also be beneficial to keep all email receipts and follow-up updates in a specific folder on your email account. That way, if you decide to return something, the tag will be easily accessible.

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