Negative Option Scams May Snag Online Holiday Shoppers

By Mark Huffman
ConsumerAffairs.com

November 30, 2005

• Wal-Mart Fined $7,000 for "Black Friday" Employee Death • Online Holiday Sales Dip • Christmas Sales Forecast Gets More Grim • Black Friday Victim's Family Sues Wal-Mart • Giving Without Shopping: Make It a Priceless Holiday • Cyber Monday Spending Jumps 15 Percent • More Evidence Consumers Plan to Reduce Holiday Spending • Retailers' "Desperation" to Mark Black Friday • 'Tis The Season For Stress & Depression • CPSC Offers Toy Safety Tips for Holiday Shopping • Consumers Playing Rebate Roulette This Holiday Season • Beware of Zero Percent Financing • Survey Finds Consumers Wary about Holiday Returns • NYC Fines Retailers for Return & Restocking Fee Violations • Retailers Urged to Curb Violent Video Games • Smart, Careful Shopping Will Help Keep the Season Bright • Video Game Industry Gets a D+ • Negative Option Scams May Snag Online Holiday Shoppers • Retailers' Return Policies Getting Tougher • Safety, Shopping, Charitable Giving Tips • Consumer Reports Holiday Guide • The Gift That Keeps On Taking • Best of All: Giving Without Shopping

Millions of consumers avoided crowded stores on Black Friday but made up for it on "Cyber Monday," as online retailers recorded robust sales at the start of the week. Cybershoppers avoided crowded parking lots, heavy traffic and mobbed stores, but they face an equally daunting list of dangers, including delivery delays, identity theft, negative option scams and outright fraud.

With more people using their credit cards to make online purchases, consumer advocates are bracing for an uptick in complaints. They especially caution consumers to avoid "negative option" marketing traps, where they are offered "free trials" or "free gifts," not realizing their acceptance signs them up for services they may not want.

"If you're not an experienced online shopper, this may not be the best time to start," said one consumer advisor. "Those who have been shopping online for awhile have built relationships with online merchants and know who they can count on. Novices may get burned."

Consumer experts suggest making online purchases from well-known, trusted online retailers with good reputations for customer service. They warn consumers to avoid making any transactions for cheap wristwatches or other trinkets currently being hawked through spam emails.

Delivery glitches can also be a problem this time of year. Some online merchants in the pat have run out of inventory and failed to fulfill orders. Also, with delivery services operating at or near capacity, any interruption -- such as a blizzard -- can cause back-ups.

Analysts point to a number of reasons for a spike in online sales this year. One of the most obvious � the high price of gasoline. By ordering goods online, shoppers can leave their cars parked.

Also, with online shopping, many consumers are able to purchase gifts while at work, a practice a growing number of businesses are actively trying to discourage.

Consumers spending money over the Internet are projected to spend more than $19 billion during the holiday shopping season, according to comScore Networks, a commercial tracking firm. That would represent an increase of around 24 percent. The firm says that over the Black Friday weekend, online consumer spending rose 33 percent to $737 million.

Online spending this holiday season is expected to exceed $19 billion, a 24 percent rise over last year, comScore said.

While Cyber Monday is a big day for online holiday shopping, it�s not the biggest. Usually the busiest day falls sometime in December. Last year, Cyber Monday produced $386 million in sales, according to comScore Networks.

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