Tips for shopping safely
Whether it's a retailer or restaurateur, airline or air-conditioner seller, computer shop or car rental company, there are always two main risks: either it's a dodgy company, or it's a legit company that has financial problems and goes bust.
The aim of these tips is to help you minimise the risks.
What happens if a company goes bust?
Quite simply, its customers are immediately transformed into creditors.
This hits hardest if you've ordered goods or tickets from them, and not had delivery, as then you are simply one of a line of people trying to get your money back out of the company's assets, and you usually get back much less than you paid in.
Even if you've had delivery, if the company you bought from goes under and there's a problem with the goods, it can mean you've no comeback.
While MoneySavingExpert.com endeavours to check deals are valid, we don't check companies' finances - even huge names like MFI and Woolies have folded - so it's very important you use the right strategies to stay protected where possible...
DO: Pay by credit card for goods over £100
Pay by credit card for something over £100, eg, flights, kitchens, sofas, and Section 75 laws super-charge your consumer rights.
Unlike debit cards, cheques & cash, pay in full or part (even just £1) on a credit card and by law the lender's jointly liable with the retailer. This means you have exactly the same rights with the card company as you do with the retailer, so if it goes bust, you can simply take your complaints there instead and get money back if no delivery.
Yet it's important you ALWAYS REPAY IN FULL each month, so there's no interest cost. See the Section 75 guide for a full guide and Cashback Credit Cards for how to earn cash on top too.
DO: Protect purchases under £100
Section 75 doesn't apply to purchases under £100, but there's still an option which can help. It's not a legal protection, just Visa rules, but it's a good secondary back up.
Spend on a Visa credit or debit card and, if the goods don't appear within 120 days, you can ask your bank to reclaim the cash from the seller’s bank. See the Visa Chargeback part of the Section 75 guide for full details.
DON'T: Use unfamiliar sites without checking
Bogus websites are often set up to cash in on popular products like Ugg boots and Tiffany necklaces, so be wary if it's an unfamiliar site. And don't think that because it appears on a reputable search engine, that makes it a reputable site - always check.
DO: Check the site's legit
Most folks know to look for a security padlock on a website's bottom right, but that doesn't mean the site's legit, just that payment's secure.
To find out who registered the site and when, search the Whois database. Reputable firms should also appear on the Companies House site, the UK Govt's official companies register. Be very wary of businesses with just a PO BOX or email address.
Study the site's worldwide web ranking on Alexa. Anything in the top 100,000 means it's reasonably big - a good, though not foolproof, indication of legitimacy. Do a quick Google search for other shoppers’ experiences.
DON'T: Let your anti-virus run out
Crucially, ensure your security's up-to-date - free software can be downloaded to your computer in five mins. Full details in the Free Anti-Virus Software guide.
DO: Know your distance selling rights
Many people are surprised to learn you've MORE rights buying online (or telephone/catalogue) due to the Distance Selling Regulations.
This gives a legal right to send most goods back within a week for a full refund (including outward delivery costs), even if there’s no fault. You'll usually need to pay for the return delivery. Read Consumer Rights for a full guide.
However, of course this is balanced by the fact that, order online, and that automatically means a time gap between ordering and delivering - when the company has your money. So if it goes bust in that time, the distance selling rights don't help.
DO: Understand sometimes there's no protection.
Ultimately, there is always a risk that a company can go bust. If the above routes don't apply, then you have to make a decision about whether you're willing to take the risk of parting with your cash.
Don't be overly scared of this: every day we all make transactions based on trust, and this is part of that, but do balance up the amount you're spending against the risk. Don't give large amounts of money to a company you're not sure of.
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