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:
Any reputable business or nonprofit must have all the appropriate licenses:
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’) Tax Exempt Organization 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.
Online shopping websites often offer great deals, variety, and convenience. But, you need to be careful and make informed decisions about online purchases. Some tips for shopping online:
- Use websites that you know or trust.
- Compare prices and deals, including free shipping, and extended service contracts.
- Use promo codes from sellers, to get discounts or free shipping.
- Get a complete description of the item and parts included.
- Find out about the delivery timeline, warranties, and the return policy.
- Verify the full price of the item, not just the advertised price. Check out fees before you buy.
- Read product and seller reviews from past customers and independent experts.
- Pay with a credit card. Federal laws protect you if you need to dispute charges. You don’t have that same protection with other methods 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 web address bar.
- Avoid making online purchases on public Wi-Fi hotspots. These may not be secure, and someone may steal your payment information over the network.
- Save your purchase order with details of the product and your confirmation number.
The Federal Trade Commission offers more information about shopping online.
A product warranty is the promise that a product will work. Federal law requires that warranties be available for you to read before you buy. A standard warranty is part of the item you purchased. There is no extra 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. To make a claim against a warranty, the seller or manufacturer may require you to follow the care and maintenance instructions.
- Spoken warranties are spoken by an employee at a retailer or service provider, Spoken warranties are often 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 or “extended warranties” extend the guarantee that a product will work. You can buy a service contract, if you pay extra. Sellers offer these service contracts at the time or after your purchase. Extended warranties are common when you buy a car, 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 the manufacturer can’t help, report it to your local consumer protection agency.
Sometimes you may need to return or exchange an item you purchased. Retailers create their own return policies. They must post them in a place that customers can find them. To make your return or exchange go smoothly:
- Read the seller’s return exchange and refund policy before you buy items.
- 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.
- Return all the pieces, accessories, and instructions that came with the item. Some sellers may not give you a refund if 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. Retailers may limit exchanges to a “like” item, if a similar item is available.
Your state consumer office may offer you more protections with returns and exchanges. If you paid with credit card, the issuer may give you extra time to return an item, as a cardholder perk.
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Last Updated: November 14, 2019