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From...
Attention, Internet shoppers: Seals of approval may mislead you
August 11, 1998
Web posted at: 12:30 PM EDT
by Judy Heim
(IDG) -- Shopping online can be scary. Many people just don't feel comfortable spending money over the Internet. So Web vendors -- in their attempts to reassure consumers -- are adorning their sites with safe-shopping seals reminiscent of the Good Housekeeping Seal of Approval.
But do those colorful little emblems offer any real value to the consumers who rely on them or to the merchants who spend as much as $5000 to display them?
To find out, PC World interviewed or attempted to interview executives at ten companies that award the most frequently displayed seals. In addition, we spoke with dozens of businesspeople at Web sites that display these emblems. The findings are disturbing: Consumers can put their trust in a few of these Web site seals, but in many cases they aren't worth the pixels that they're painted with.
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Seals to look for
A seal is only as good as the company awarding it. That company should thoroughly screen Web-based businesses for legitimacy and questionable business practices. It should also provide a mechanism for resolving customer complaints. The seal of the Better Business Bureau -- an organization that existed long before anyone heard of the Internet -- offers more meaningful protection than the others we examined.
To obtain the BBBOnLine seal, a business must be at least a year old, provide bank and customer references, and disclose the names and backgrounds of company owners. It must pass a background check that looks for evidence of fraud or action by government regulators. The company must also participate in a Better Business Bureau arbitration program for handling customer complaints. Web site owners we spoke to verified that BBB representatives had visited their offices as well as their Web sites. The BBB seal does not come cheap: It costs $400 to $500 for a small business, and up to $5000 for large corporations. (Members of the BBB pay less: $200 for small businesses, $2000 for large ones.)
The WebTrust seal, awarded by CPAs licensed by the American Institute of Certified Public Accountants, is also worth looking for but doesn't quite measure up to the BBB standard. Qualifying sites must submit to an examination by a CPA, who checks the company's business and privacy policies every 90 days. The accountant makes sure the company is solvent, verifies how quickly products ship once orders are received, and ensures that the company abides by its stated privacy policies. Who pays for all this quality control? The Web sites. Since examinations can run thousands of dollars, even for small businesses, the cost adds up fast. Another downside: If a consumer has a complaint, WebTrust offers no mediation mechanism.
If you're concerned about privacy, look for a seal from Trust-e. The Trust-e seal means a Web site has posted a privacy statement telling shoppers what personal information the site gathers. Trust-e investigates complaints about its member sites. A Trust-e seal costs $249 for companies that have annual sales below $1 million, and up to $4999 for larger firms. The seal does not protect consumers from problems related to the quality of products and services that are offered by online vendors.
Seals to ignore
Some companies dispensing seals do little to screen out potentially unscrupulous merchants and offer scant or no recourse for resolving complaints. In the worst cases, seal vendors merely "register" Web businesses in an online directory, although the seals may lead consumers to believe otherwise.
Consider Multicheck Internet Business Registration Center, which charges $46 for a database listing. The listing includes very basic information about Web merchants, such as a phone number, an address, and a description of the company and its wares. The merchants themselves supply this information, and Multicheck does not verify all of it, according to a statement on its Web site. Multicheck provided no address or phone number for itself on its Web site, and the company never responded to PC World's e-mail requests for an interview.
We also spoke to executives at BizRate, MasterCard, Netcheck Commerce Bureau, PublicEye, Web Assurance Bureau, and WebWatchdog, all of which award seals. These six firms were more forthcoming about their policies than Multicheck, but they could not match the pro-consumer policies of BBBOnline, Trust-e, or WebTrust.
Netcheck verifies an applicant's ground address by sending the company a letter, but it does no other screening, says Thomas B. Abbott, company president. If consumers file significant complaints about a site, Netcheck will post a warning.
The upshot: If you're a consumer, be skeptical of any seal, unless it comes from one of the three sites recommended in this article. If you're a business, do your homework, so you can avoid forking out some serious money for a seal that does little more than clutter your Web site.