ONLINE SHOPPING

Project Information

Tutorial

Lecture Number- 5

Professor- Dr. Jalal Kawash

Group Number- 2

Tutorial- T33

Teacher Assistant- Faraz Rasheed

Team Name

!i!i! FUNKS !i!i!

Group Members

Fatima Assad

LUbhani Sharma

SaNum Mushtaq

MarK Mai

MeliSsa Young

Initial Project Statement

With the increase advancement in technology, the Internet is now providing a much more convenient method of shopping for many consumers around the world. Nowadays, with just the click of a mouse, shoppers anywhere are able to purchase virtually any product anytime online. With the ease availability of electronic commerce (e-commerce) in today’s world, many customers can shop and pay at numberless stores online without leaving the comfort of their home. Living in the increase popular world of e-commerce, merchants are now expected to make the shopping process for their customers a reliable and easy one by providing not only the requested products online but also a simple and secure payment process. However, every transaction is not a perfect one when it comes to shopping on the Web. While sometimes it is a glitch in the computer system or poor customer service, other times the customer’s personal and financial information is being stolen due to poor security measures.

Accordingly, our topics discussed in this page will be the pros and cons of shopping online along with a look at what are some of the security features provided by online merchants. For case studies, we will take a look at eBay.com and Amazon.com, two of the major online shopping sites accessed regularly by most shoppers. We will then discuss the different methods of payment shoppers use to pay for their purchases and also if any security measures they offer. Lastly, we will end our discussion by providing some helpful tips to customers in order for them to protect their personal and financial information from theft during online shopping.

Information Review

Major Shopping Sites

eBay.com

eBay is the World's Largest Online Marketplace incorporated in 1996 that has established a strong platform for sale of enormous goods and services. Being rated as the most popular website by several businesses and individuals, eBay provides many opportunities to trade goods and services as well as is expanding global e-commerce for an ever growing online community. According to 2004 statistics , eBay has 65 million registered users from 150 countries , 971 million items for sale and gross merchandise sales of $15 billion approximately. eBay owns local sites in 19 countries and offers its buyers with its own online pay service called the PayPal Inc. eBay's main competitor's are Amazon.com , Google and Yahoo!

MARKETWATCH OF 2007

Sales: $7,672.3M

One year growth: 28.5%

Net income: $348.3M

Income growth: (69.1%)

Tips for Secure Shopping on eBay.com

- Communication:

This is the key for making secure transactions online. eBay offers its users some tips for communicating with a representative by asking a question, emailing, or requesting a member's contact information and ID.

(1) Asking a question:

eBay helps its users to select the right product.For instance,if the user is doubtful about any product, then he or she can ask seller questions like "Has the product ever been used before?" etc. In order to directly interact with the seller, the website has a link "Ask seller a question" provided on the page where the items are listed which allows the user to send any query regarding the product.

(2) Email:

eBay also offers its users the facility of emailing any other eBay member to inquire about a specific product listed for sale. In order to this, however, the users have to register first by filling a form available online and becoming a member.

(3) Requesting a member's contact information & ID:

When a user is unable to find the information for their trading partner while trading goods, they are able to request it directly from eBay. To request for the information, the user must click on the advance search link available at the top of the eBay Home page and under the member section the ID information for all the members of eBay is listed.

Amazon.com

Amazon.com, incorporated in 1997, is the biggest Internet Retailer which offers the "Earth's Biggest Selection" of books, CDs, videos, electronics, toys, tools, home furnishings and housewares, apparel, kitchen gadgets and much more. It's considered to be the most customer-oriented online shopping website. Amazon also sells products from other well-known retailers such as Toys'R'Us Inc., Target Corporation, Circuit City Stores Inc., the Borders Group, Waterstones, Expedia Inc., Hotwire, National Leisure Group Inc., and Virgin Wines. It's main competitor's are Barnes & Noble(# 1 bookseller in the US ), Columbia House (top DVDs marketers in North America)and eBay.

MARKETWATCH OF 2007

Sales: $14,835.0M

One year growth: 38.5%

Net income: $476.0M

Income growth: 150.5%

Tips for Secure Shopping on Amazon.com

(1) Protect your purchase:

eBay lists few buyer protection programs such as 'Item not received' or 'significantly not as described' process, PayPal buyer Protection and eBay Motors vehicle Protection Programs. However, many problems can be solved by communicating with the seller directly even before using the protection programs or making a purchase.

(2) Protect your passwords:

The first and foremost responsibility of the user is to protect his/her password while using a public computer. Users need to take extra care when entering passwords on to a public computer and also must not forget to log out from his/her account in the end.

(3) Research your seller:

The user or buyer must check the history of the sellers feedback to make a careful and a successful transaction.

Payment Methods

Credit Card

E-commerce Credit Card Transaction

- The shopper fills out a secure order form on a web site

- All this information is encoded and sent to the credit card processing company gateway.

- The credit card processing company gateway decrypts the information

- The credit card processing service verifier checks the credit card information

- The internet credit card processing gateway encode the information again and send it to the merchant services credit card processing bank

- The merchant account credit card payment processing bank makes the transaction

Safety and Protection with Credit Cards

(1) Card Secure Code (CSC) or Card Verification Value (CVV):

-The CSC or CVV is a three or four number series that only appears on the physical card. During the checkout, shoppers are asked to entry these the CSC or CVV to ensure that the credit card is held by them at the moment of shopping online.

(2) 3-D Security:

- The 3-D Security was developed by Visa and offered to clients as the Verified by Visa service. Master Card also offers this service as MasterCard SecureCode.

- 3-D Security is an XML –based protocol that provides an additional security based on an payment authentication process that involves - 3 domains: a vendor, a bank, and a credit card company.

How does it work?

- During the checkout process, shoppers who are registered to the service will be asked to enter their personalised password.

- The vendor establishes a connection with the credit card issuer and verifies the shopper authenticity.

- If it is correct, the vendor connects to the bank and asks for payment authorization.

PayPal

PayPal is a company which allows users to transfer money over the internet. It is merely like using money orders or checks but electronically through the web. For these money transfers to take place both ends of the transaction need to have an e-mail and both ends will need to have set up with PayPal. Before PayPal can be used a user must first fund their account with money either from a check or money order, an electronic debit from a bank account or by a credit card.

PayPal is used primarily on auction websites and commercial sites such as eBay or Amazon. Users are charged with a fee depending on the amount of money being transferred. In 2003 eBay acquired the company. PayPal now operates in 190 markets and manages over 164 million accounts. There are multiple forms of currency(18) which a user can keep their funds under.

Safety and Protection with PayPal

When using PayPal the customer is allowed to file a buyer complaint within 45 days if they did not receive their purchase or were falsely mislead by the seller. If the buyer used a credit card through PayPal they could possibly get a refund through charge back. PayPal also protects it's sellers through their Seller Protection Policy which protects sellers from buyers of unauthorized payment. PayPal also recently introduced a Security key feature in which the owner of an account can place in to add for safety to their account. The key prevents third parties from potentially accessing the account.

Arguments

Pros of Shopping Online

As with any argument, the argument of shopping online also has its pros and cons. One of the main pros of shopping online is the fact that it is convenient as customers can browse and shop for various items without leaving the comfort of their house. Many consumers consider it to be efficient as shopping only becomes clicking the mouse and finding numerous results for a product rather than wasting time going from store to store. Another great advantage of online shopping is that websites offer a wide range of products to choose from that are not available in one single place. Customers have the advantage to compare prices offered by different merchants at the same time and which can help in making a more wise decision when purchasing an item. There is also the benefit of getting the goods delivered right to your house and therefore customers need not to worry about spending time to pick up the items themselves. Also is the advantage that Internet is accessible 24 hours a day and everyday of the year. With this extended unlimited hours of operation, customers are able to shop whenever it is more suitable to their needs when it comes to time. Customers are also able to shop at a global level rather than just at a local level. With the increase use of internet around the world, shopping online is not only an advantage for many businesses in terms of making a profit, but many customers also have the benefit of purchasing goods they are unable to find in a local department store. This of course increases the variety of products available to choose from. One last advantage of shopping online is that for the most times, items are more generally lower priced and more discounted due to the high percentage discount sites and the fact that more and more people are now using online shopping as a regular method of shopping.

Cons of Shopping Online

While there maybe many pros to the argument of shopping online, there is also just as many cons to balance the argument. One of the greater disadvantages of online shopping is the fear about personal or financial information being stolen when dealing with a merchant online. There is also the issue of E-mail scans known as "phishing" or "spoofing" in which consumers receive messages from dishonest sources disguised as messages from trusted retailers or financial institutions. Customers can therefore get scammed easily. While this maybe the problem some customers see with shopping online, others are more concerned about email addresses being sold to third parties and the issue of identity thefts or credit thieves.

Sometimes, prices may not be accurate as sellers will talk up their price in order to sell it. Another disadvantage of shopping online is that customers also have to deal with paying the 'shipping and handling' fee in order to get their goods delivered right to their home. There is also the issue of being charged more than once for an item, either by system error or accidentally. This then causes further problems for the customer to have to call the merchant and go through the process of requesting the money back.

Shoppers should be extra careful when purchasing products that are shipped from outside their home country. There are often extra fees such as duties, brokerage and exchange that are not disclosed up front, the buyer may only be made aware of them after the item arrives at their door. There are websites that specifically assists Canadians with cross-border shopping from the US, but it is often best to contact the merchant and obtain a written quote with all fees included before completing the purchase.

Also,customers are unable to personally check the item while sitting at home and this can sometimes cause a problem after making a purchase when they receive items different than expected. Sometimes mistakes happens on the merchant's side with sending the incorrect item than what was actually ordered which then involves the customer to have go through the process of sending product back and requesting a refund. For most of the times, refunds are not as accessible and may not always be possible. Considering all these arguments, it seems more convenient to pick up an item at a local store than to deal with all this.