Point click & shop.

Although online shopping is booming, there are some things you should know before you spend a dime

JOSEPH MOUZON LOVES THE CONVENIENCE AND POWER OF shopping online. For more than two years he has bought books, CDs, furniture, computers, airline tickets and even shoes over the Internet. "Once you narrow it down, the Web becomes the perfect tool to do comparative shopping," says Mouzon, who spent more than $5,000 shopping online in the past year. He also regularly sends flowers to his wife and relatives at holidays. The simplicity of ordering flowers for the entire year, and the relief of not having to deliver them himself, is well worth the lack of a more personal touch. "Hand-delivering flowers may suffer as a romantic notion, but I'm completely hooked," he says.

In truth, Mouzon, CEO of Imhotech (www.imhotech.com), a Redwood City, California-based company that integrates technology and black culture, is probably more technologically sophisticated than many Internet users--thus he harbors little concern about using his credit card in cyberspace. Although his level of sophistication has made him more likely to shop on the Net, it hasn't shielded him from problems, such as poor customer service or the delivery issues that become more acute when dealing with a virtual store. Yet each day more people are embracing the power of their browser to give home shopping a whole new dimension.

Information technology research firm Forrester Research Inc. in Cambridge, Massachusetts, estimates that over 9 million U.S. households spent more than $7.8 billion last year shopping online. That number is expected to increase to $108 billion by 2003. While shopping online may be the wave of the future, not every experience is as simple as pointing and clicking. To get the most from your search for online treasures, you need to know how to evaluate a shopping site, root out hidden costs that could affect your experience and get good customer service. Catching good deals on the Web is a matter of being savvy about your shopping technique.

EVALUATING A WEBSITE

Before you actually make a purchase on a site, determine if the business is trustworthy. Many people feel more comfortable with established brands such as J. Crew and Sears, but there are plenty of reputable virtual stores on the Web. If the site isn't a top brand, check to see that it follows good business practices. Sites that Trust-E, i-Escrow, American Express, MasterCard and Visa symbols are likely to be on the up-and-up.

"Most sites are safe," says Kenneth Clemmer, an analyst with Forrester. "Yes, there is fraud out there, but there are more credit card problems at restaurants than Websites." He offers the following tips for would-be cyber shoppers:

* Security information and policy should be stated clearly on the home page.

* Your browser should give you a message that you have entered a secure server that protects the information you transmit. These servers will encrypt credit card numbers and any personal information you send to complete your purchase.

* The site should state its privacy policies. Many times people don't read them, but it is important to know what the company is going to do with the information it collects from the sale.

* Make sure you know the terms and conditions under which the site operates. Many people pass over this section, but information here usually gives guidelines on sales procedures, shipping and handling fees, return policies and other pertinent information.

* Check to see if there are other ways to contact the site, such as a customer-service phone number, a fax number and a mailing address--just in case you want to speak to someone.

Awards given by major search engines and Web organizations such as the International Academy of Digital Arts & Sciences (www.iadas.net), which runs the annual Webby Awards (www.webbyawards.com), are also good indicators of a site's trustworthiness. If the site supports advertising, see which companies advertise there. Major companies aren't likely to associate themselves with a problem site. Last, take a look at the Better Business Bureau's Website (www.bbb.org), which keeps tabs on several e-businesses.

TROLLING FOR DEALS

Although power shopping from your laptop may be convenient, make sure you are getting the best deal for your dollars. "Many people will go online with the idea that they are automatically going to get the cheapest price," says Diane Schreiber, a representative of new media research company Jupiter Communications Inc. in New York. "Consumers should be wary. [The Web] is not always the cheapest way to shop." Be aware of how much an item should cost--both on and off the Net--and use comparative shopping tools, such as shopping bots. Auction sites are another way to go (see sidebars). In addition, retailers that specialize in categories that have flourished on the Net, such as computers, autos and books, are finding that competition from walk-in stores is getting heavier.

Typically, Mouzon finds better deals on the Net than he can in any store. The Stairmaster he purchased from the manufacturer's Website for $2,000 was cheaper there than in any store he walked through. Mouzon also regularly comparison shops for books, CDs and movies on CDNow, Reel.com, and Amazon.com. At sites like these he can read reviews, sample the music and read reviews from professional writers and other customers.

Shopping online has saved him hundreds of dollars, but that's not his only motivation. "I have noticed cases where items rye purchased are not necessarily less expensive than the actual price off-line," states Mouzon. "Price is not the ultimate factor for purchasing online--it's convenience."

Husband and wife Jerome and Heidi Brown, of Oak Park, Illinois, also enjoy the ease of shopping from home. Jerome, a musician, songwriter and producer, wanted a computer that could handle sound production work

and didn't want a package with lots of hardware and software extras that he didn't need. He compared Apple, Gateway and Dell computers, among others. After deciding on a Macintosh, he hunted through online sites for the best price and found that the Computer Exchange (www.mister mac.com) offered the deal he was looking for. However, he wasn't as comfortable ordering the computer online as he was shopping for it.

"I decided to actually call the company and order it that way," says Jerome. "There are always tons of questions that I can't get answered online. And if I talk to a person, I feel that my order was really taken and is not subject to a software glitch." Talking to a person also helped Jerome pin down the actual cost of the computer after shipping and handling charges were included.

HIDDEN COSTS

Make sure that a good deal is just that. Don't base your buying decision on the purchase price alone, but know if any additional shipping and handling fees, delivery charges or taxes will keep your purchase from being the best deal you can get. Many Websites will charge handling fees, shipping fees and taxes that can drive up the price of your purchase considerably; others might only charge you a shipping fee. Know all the hidden costs before you click to buy.

Handling and shipping fees, for example, can range from a few dollars for small items, such as books and CDs, to more than $100 if you're ordering furniture or office equipment. The larger your purchase, the more you should try to negotiate for free delivery.

Taxation is another sticky issue on the Web. Whether or not Web retailers can charge taxes--and how they charge them--is the subject of a controversy still hidden from most consumers. Whenever Mouzon makes a purchase and taxes are added, he calls the company to question it about its policy. "I've always paid it, whether I felt I was being cheated or not," Mouzon says. Although he admits he is not clear on the policy, he is suspicious about how sites levy taxes. Congress is currently debating how to tax purchases on the Net, which, for now, must be taxed by the same rules that apply to mail-order purchases.

"I don't think of the tax issue on the Internet as one of fraud, but it can be a complicated one for the consumer," explains Sally Adams, an attorney and state tax analyst with CCH Inc., a Riverwoods, Illinois-based tax and business law firm. "Most companies wouldn't benefit from charging and keeping taxes they shouldn't get because they are likely to suffer during a tax audit."

To speak to these confusing issues, Congress passed the Internet Tax Freedom Act, which took effect last October. The act places a three-year moratorium on new Internet taxes and states that merchants cannot charge any special taxes on sales made on their Websites. Adams explains the current laws governing Internet taxes:

* Websites that have a significant physical presence--a store or an office--in your state can charge you taxes at the point of sale.

* If a Web merchant doesn't have a significant presence in your state, it has the option of charging taxes. If it does, it's supposed to register those taxes in your home state. According to experts, this rarely happens because merchants would rather not deal with the extra paperwork.

* Every time you buy something out of state and don't pay taxes, you are supposed to declare the value of that item and pay a state "use" tax. Again, according to experts, this rarely happens. Most people don't even know that they are supposed to pay taxes in this situation and most states don't enforce this rule.

"For example, if you buy a book from Amazon.com, the purchase should be tax-free [unless you are in the state of Washington, where the company has offices]," explains Adams. If you buy a book from BarnesandNoble.com, the law justifies taxes at the time of the sale because Barnes & Noble has stores and offices in just about every state. "These laws have always been on the books, but are seldom enforced," he continues.

CUSTOMER SERVICE

One deterrent to many potential Internet shoppers is the perception that you're not likely to get as much personal attention as you've come to expect. On the Net, customer-service issues range from providing adequate information and descriptions about items for sale to providing sufficient confirmation of a sale. Guarding customer records, timely shipping of merchandise and dealing with returns are other concerns. A recent study by Jupiter Communications confirms that shoppers' perceptions are justified.

Jupiter's survey showed that 42% of online consumers had had no response from customer service after five days. "In Internet terms, that is unacceptable," says Schreiber. "We believe customer service needs to grow a lot." Retailers often suffer from problems ranging from too few customer-support personnel to technical glitches. The best way for consumers to combat this problem is to read and understand the site's policies regarding purchases. When Mouzon ordered a pair of shoes that arrived damaged, he got on the phone and got prompt service. "They paid for the shipping and sent the new shoes before I sent back the damaged ones, so they actually showed a lot of trust," he says.

Heidi Brown also got good service with a return when she shopped at the Gap's online store. "The reason I like the site is that they have pretty good visuals and descriptions," she says. In addition, the site was easy to navigate, showed clearly which items were on sale and sent confirmation of her purchase instantly. But after one of the items she bought went on sale online less than a week later, she called customer service. "I was ready to give them a huge explanation of why I should get the sale price, but I didn't have to," she recalls. "They just gave me the sale price."

The story doesn't end there. Days later, while shopping at the Gap store near her home, Heidi noticed that the merchandise she ordered online--the same merchandise a salesperson told her wouldn't be in stock at the store for a while--showed up on the racks. She called the Gap's customer-service number a second time, and explained that she should be refunded shipping and handling fees on her recent online purchase. "On both occasions, they were glad to do it," she says. "I didn't have to beg and it was hassle-free."

Although problems will undoubtedly arise when shopping online, more merchants are becoming aware of their customers' needs. Remember, this is a new experience for both retailers and customers, so all of the bugs haven't yet been worked out. For now, the best way to ensure a pleasant online shopping experience is to be an informed consumer.

RELATED ARTICLE: How comparison shopping "bots" work

The Net's answer to personal shoppers is the shopping bot, research programs designed to seek out deals on the goods you want. To find them, type in "shopping bot" in your favorite search engine, and you'll get a long list of choices. Here are a few tips to assembling your own hot shop bots:

* Stay away from shop bot sites that charge a fee. Most are advertiser supported and therefore free to surfers.

* When you know exactly what you want, be detailed about the parameters you give your bot. A large percentage of shoppers go online looking for a specific item, according to Jupiter Communications Inc.

* Try casting a wide net, too. Enter general information about what you want to buy because not all sites list items under the same keywords. For example, "bookends," "book ends" and "art" can give you some of the same listings.

* Bots usually return results based on purchase price alone. Make sure the site you choose to purchase from is still offering a good deal after shipping and handling fees and taxes.

* Hunt through two or three bot sites for what you want. "The one thing you need to be careful about is that bots don't go out to every site out there," says Jupiter representative Diane Schreiber.

* Take rates with a grain of salt. Web retailers and shopping bot sites have relationships that may not be apparent, Schreiber says. "It is never the be-all and end-all, but it does cut down on the time spent shopping." --J.W.E. IV

RELATED ARTICLE: Online Auction

Bargain hunting or antique collecting through online auctions can open up paths to the special treasures your heart desires, but don't get looted in the process. Shopping at online auctions can be safe and enjoyable if you follow a few simple rules and use a lot of common sense.

* On person-to-person auction sites, like eBay.com, look for seller profiles that give a person's history of buying and selling. If the seller doesn't send the merchandise or delivers something other than what was promised, their profile will likely contain lots of hate mail.

* Don't rely solely on these profiles when deciding to bid, however, because unscrupulous sellers can switch names to get a clean profile. Read the site's rules and look for guarantees and protections against fraud. Look for escrow services, such as i-Escrow, that protect both seller and buyer from getting swindled.

* Analyst Rob Enderle, with Cambridge, Massachusetts-based Giga Information Group, warns against using credit cards in person-to-person deals. "It would be like buying something off a street corner with a credit card," Enderle says. "If you do deal with an unknown party, don't give them critical information they could use later." Consider paying by money order or traveler's check.

* Know where to hunt for the item you want. Not all auction sites are cut from the same digital cloth. Many retailer sites, such as Egghead.com, auction merchandise such as software and computers. Auctions on new items usually carry original warranties and service agreements, as well.

* Also, try connecting to a company's Website to see if the manufacturer holds direct auctions.

* Don't get so addicted that you bid for things you don't really need. "Use good judgment," says Enderle. "Moderation in all things. [Auctions work] so well I have a ton of stuff." --J.W.E. IV