Shopping Online with Virtual Currencies [Infographic]

Digital currencies like Bitcoin can be a fast way to pay online, however, paying via digital currencies comes with risk.

The FTC has received hundreds of complaints involving Bitcoins and other digital currencies. The two most common problems are the following: online merchants who don’t deliver the product on time or at all and merchants who give refunds in store credit, rather than currency.

As we all know, the Bitcoin value goes up and down — sometimes sharply — depending on demand. Besides, payments made with virtual currencies aren’t reversible and don’t have the same legal protections as some traditional payment methods.

The FTC recommends to always check out the seller’s reputation, his location and how to contact him in case of problems. Besides, a customer should find out whether the payment will go directly to the seller, or through a payment processor, which may offer additional protections.

The only way to get a refund is through the seller or payment processor, so it’s important to choose companies you trust. That is why a customer should preliminary find out all the information possible on the refund and return policies. The value of Bitcoin changes constantly so the seller should tell a customer before the purchase what exchange rate will be used for refunds. To refund a credit card purchase, the merchant usually credits the account. However, since customers can change their digital wallet accounts, a seller can’t always send Bitcoins back to the wallet it came from.

A customer should read the seller’s privacy policy to find out what other information might be collected and shared. If the seller uses a payment processor, one should check its privacy policy as well. A recent FTC report found that many shopping applications had privacy policies that included broad rights to collect, use, and share data.

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