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A Brief Explanation of How Online Shopping Works

written by: •edited by: Aaron R.•updated: 12/16/2010

Have you ever wondered how the whole online shopping process works? In this article, we discuss how to identify secure online transactions and how vendors set up business online.

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    Shopping on the Web

    Online shopping has been around since the early days of the web and hasn’t changed all that much on the front end of things. The aspect of online shopping that you don’t see is what goes on behind the scenes when you click the button to finalize your purchase after entering your name, address and credit card information. Multiple layers of security are employed to keep your information safe, and you better believe there are numerous con artists all over the world who are trying every which way they can to steal that information from you.

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    Online Shopping Basics

    How does online shopping work? When you visit a website with your computer or smart phone, all you’re really doing is downloading a bunch of graphics and text from their web server and onto your own device. Many advances have been made in the way in which those text and graphics parts are formatted, but the principle remains the same. Online shopping takes that basic format and adds another layer that effectively turns the website into an active program that is often referred to as a shopping cart. It uses a series of cookies and scripts to keep items in your virtual cart until you are ready to check out.

    Most online shopping sites are attached to a database of some kind where inventory is tracked. This is what is so convenient about online shopping, because you can see if an item is in stock before you buy. When you place an order for something, the database removes those items from the count so that other customers will see if something is still available. When dealing with large retailers like, it is fairly unlikely that you will buy the last thing ‘on the shelf’ but it can happen. Your entire order will be processed electronically and then sent to the distribution warehouse where someone will put those items in a box and send them to you.

    Online shopping is really not that much different than flipping through pages in a printed paper catalogue, then calling a customer service line and placing your order over the phone. The only catch is that it is far more secure to submit your credit card number over a secured web connection than it is to say it aloud over the phone (especially on a cordless home phone) or even through a printed order form and sent through the mail.

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    Online Shopping Security

    Browser Security HTTPS Never enter your credit or debit card number on a website form that is not using HTTPS. This is a secured form of the HyperText Transfer Protocol that is used for websites, and it provides an encrypted connection to keep others from ‘sniffing’ out your information during the process. Without using HTTPS, someone could easily capture the data being transmitted from you to the web server that is hosting the shopping cart. You’ll sometimes find amateur online retailers that set up shop without securing their ordering form because it does cost money to get a digital signature from a company like Verisign. Their prices start at $399/year, but any seller not using this online security is putting their customers at great risk.

    Browsers like the latest version of FireFox or Internet Explorer are good about prominently displaying when you are using https and even put a name in the header, such as in the example here with In your browser, you can click on that green name for PayPal and it’ll show you the name of the site, that it is verified by Verisign and you can click the More Information button (in Firefox) or View Certificates (in Internet Explorer) to get all kinds of technical details. If you think you are on a site like PayPal, but that green highlighted box is not there or the information contained within does not match up, then don’t provide them any personal information. It could be some con artist trying to mimic a real online store in order to steal data like credit card numbers or passwords.

    For more information, be sure to read my article about online shopping safety for tips on things like how to avoid spam from retailers.