As an exclusively on-line retailer, you can probably guess how we are going to answer this question. But, hold on. We have good reason to feel it’s not only perfectly safe to order on-line, it’s a great idea. Using your credit card on-line is actually more secure than using it at your local restaurant. As my friend and I were discussing this at lunch yesterday, I pointed out to him that in the old days, credit card numbers were printed out, unencrypted right on the slip (remember carbon paper and those machines they used to put your credit cards in?). Even thought credit card readers are used now so that the number isn’t printed out, employees in certain establishments have purchased readers that can steal your credit card number. When you hand it to that waiter to process, how do you know what he does with it before he brings it back? It recently been reported that many large retailers are using less-than-state-of-the-art wireless networks to broadcast your credit card number through the store. Anyone with a laptop and a cheap piece of software can drive by the store and pick up your credit card number.
Security Of Internet Transactions
In the case of an on-line store, any modern retailer (this one included) uses encryption when your credit card is sent over the Internet. You enter it in plain text in the privacy of your own home. But, when you hit the enter key, the number is scrambled so that, if anyone were “sniffing” on the line, they would only see a series of meaningless bits. When your information arrives at the intended location, a “key” is used to unlock and reassemble the data. Your information is only seen again at the intended location. In the case of Treasured Locks, we do not store any personal information of clients (including credit card numbers) on our computers. We use Yahoo which is one of the largest, oldest and most trusted etailers on the Internet to provide our store services. Yahoo uses state-of-the art technology to store this information.
The Real Risk
Maybe you don’t understand or trust encryption. And, let’s be honest. Even with encryption, anytime you use your credit card number anywhere, some unscrupulous employee of the business might steal it. So, let’ s look at the worst case. Someone steals your credit card. What happens?
As soon as you find out your credit card number has been stolen (whether it’s over the Internet or someone steals your wallet), report it. At this point, you are not liable for any subsequent charges. That’s the law. From the Federal Trade Commission
“If you lose your credit or charge cards or if you realize they’ve been lost or stolen, immediately call the issuer(s). Many companies have toll free numbers and 24 hour service to deal with such emergencies. By law, once you report the loss or theft, you have no further responsibility for unauthorized charges. In any event, your maximum liability under federal law is $50 per card.”
Most credit card companies will not even hold you to the $50 as long as you promptly report your card stolen, as soon as know. The key is when you know. If someone steals your card and goes on a spree, you are not responsible as long as you report it when you find out the number has been stolen. Just a tip from us to you, do not pay for credit card “loss protection” That’s the real rip off, according to the FTC. Having a credit card number stolen is not the same as having your identity stolen. Credit card numbers are easily canceled. A single phone call can have your card deactivated in minutes and you are not responsible for any charges after that and no more than $50 maximum (per card). Recently (yesterday), I thought a replacement card was lost in the mail and called in to report it. A few minutes later I found the card and called back. It was too late, the company had already killed the account and issued a new number. For anyone who had that number, it is now and forevermore worthless. I had a card stolen from my mailbox several years ago. The person who took it went on a shopping spree charging up around $1,500 as I recall. American Express asked me to simply tell them which charges that month were mine and which were bogus. They took the bogus charges off my bill and I didn’t have a single problem after that. They did issue a new account number.
If you still don’t feel comfortable trusting your credit card information to a retailer you don’t know, there are third party payment services like PayPal, that will allow you to give this information to them and pay the merchant via them. That way the merchant never even sees your credit card information.
The Advantages of Using a Credit Card
Keep in mind that stealing your credit card number is not the same as identity theft. While you should be a responsible consumer and protect your credit card number to avoid any hassles, using a credit card is actually a very safe and convenient way of purchasing, even over the Internet. Most (every?) credit card company offers consumer protection. If you order something from a merchant and don’t receive it, your credit card company will go to bat for you and can get your money back. If you pay a merchant by check or money order and never get anything, you are out of luck unless you’re willing to take them to small claims court. PayPal also offers consumer protection services. By paying with a credit card, you are giving yourself some recourse in dealing with unknown parties. Pay by a check or a money order and that’s the real risk.
