Before You Shop

Before you make a purchase, do your research, and know your rights.

Research a Business or Nonprofit

Before conducting business with a company or donating to a charity, do your research. You can find information about the trustworthiness and financial status of a business or nonprofit from various sources:

Licensing

Any reputable business or nonprofit must have all the appropriate licenses:

Complaints History

Review the complaints record of a company or charity to determine its trustworthiness:

Financial and Tax Records

Find out if a company is making money or losing money, and why, before you do business with it. Check the federal tax status and filings of an Exempt Organization (EO) before donating money to it:

  • The U.S. Securities and Exchange Commission (SEC) provides information about a company's finances or financial records.
  • Contact the U.S. Commercial Service, which can provide financial background checks on companies based outside the U.S.
  • Find out from the National Association of Secretaries of State (NASS) whether a company is a corporation in good standing and has filed annual reports with the state through the secretary of state where the company is incorporated.
  • Use the Internal Revenue Service's (IRS') Exempt Organizations Select Check search tool to look up information about tax-exempt organizations, such as whether they are eligible to receive tax-deductible charitable donations.
  • GuideStar provides data on nonprofits and community foundations from several IRS sources.

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Shopping Online

Online shopping websites often offer great deals, variety, and convenience. However, you need to be careful and make informed decisions about online purchases. Some tips for shopping safely online:

  • Use websites that are known or recommended.
  • Compare prices and deals, including free shipping, and extended service contracts.
  • Search for online coupons, known as promo codes, which may offer discounts or free shipping.
  • Get a complete description of the item and parts included, and the price, including shipping, delivery time, warranty information, return policy, and complaint procedure.
  • Verify the full price of the item, not just the advertised price. Check out surcharges and fees before you buy.
  • Read product and seller reviews from past customers and independent experts.
  • Pay with a credit card. Federal law protects you if you need to dispute charges, but it does not apply to debit cards, checks, cash, money orders, or other forms of payment.
  • Use a secure browser. Look for a URL that starts with “https” rather than “http.” Also look for a closed padlock icon, usually in the lower right-hand corner of the screen.
  • Avoid making online purchases on public Wi-Fi hotspots; these may not be secure, and your payment information could be stolen over the network.
  • Save your purchase order with details of the product and your confirmation number.
  • Find out if your purchase qualifies for discounted or free shipping.

The Federal Trade Commission offers more information about shopping online.

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Warranties

A product warranty is the promise that a manufacturer or seller makes to stand behind a product's quality. Federal law requires that warranties be available for you to read before you buy. A standard warranty is part of the item you purchased, and there is no additional cost for this protection from the company. There are three main types of warranties:

  • Written warranties are printed and come along with the item you purchased. In order for a written warranty to take effect or to make a claim against it, the seller or manufacturer may require you to perform maintenance or use the item as instructed.
  • Spoken warranties are spoken by a salesperson, or other staff at a retailer or service provider, for services like free repairs. 
  • Implied warranties promise that the item you purchased will do what it is supposed to do. 

A product is covered under implied warranty laws in your state, unless it was marked "as is" when you purchased it.

Service Contracts

Service contracts or “extended warranties” extend the guarantee that a product will work. They are purchased for an additional cost. Sellers offer these service contracts at the time of or after your purchase. They are commonly offered when you buy a car, major electronics, or household appliances. Third party firms (not the manufacturer or the seller) may also try to sell you an extended warranty. Some extended warranties duplicate the warranty coverage that you get automatically from a manufacturer or seller. 

Problems with Warranties

File a complaint about a warranty with the retailer; if the retailer can't help, contact the manufacturer. If neither the retailer or manufacturer can help, file a complaint with your local consumer protection agency.

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Returns and Exchanges

Sometimes you may need to return or exchange an item you purchased. Retailers can create their own return policies, as long as they are posted in a place that customers can find them easily. To make your return or exchange go smoothly:

  • Read the seller's return exchange and refund policy before you make your purchase. 
  • Present your original receipt, gift receipt, or packing slip.
  • Find out if there is a restocking fee for the return.
  • Check for the number of days you have to return or exchange the item. If you have to ship it back, take days in transit into account. 
  • Find out if you must use a trackable shipping method or insure the item that you are sending back to the seller. This is often required for large electronics, art, or other expensive purchases.
  • In most cases, the item you're returning must be unopened or unused.
  • Send back all the required pieces, accessories, and instructions that were included with the item. Some sellers may not give you a refund if these items are missing. 
  • Find out if return shipping is free, for online purchases. Use the return label if they provided one.

Refunds are normally given in the same form of payment that you used to buy the item. Exchanges may be limited to a "like" item, if the item is available. 

Contact your state consumer office to find out if it offers more protections with returns and exchanges. Also, your credit card issuer may extend the window of time that you can return an item that you purchased with that card. Check with your issuer to find out if that is a benefit of your credit card. 

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Last Updated: September 27, 2018