Point Click & Shop

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

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 t
ax 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
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