When you shop online, you may notice an option to pay with bitcoins. It is a crypto or virtual currency that allows you to quickly pay online or from a mobile app if you are in the actual store.
Paying with a virtual currency has its risks. The value of the currency fluctuates based on the demand, which means it can go up or down to an extreme degree. Additionally, all payments are typically final and virtual currencies are not as legally protected as other payment methods. When you click send, there is no way to get your money back unless you reach an agreement with the seller. That’s why it’s essential to learn more about the seller and their policies with regard to returns, refunds and disputes.
Virtual currencies prove to be so problematic that hundreds of people have already complained to the FTC about bitcoins and similar crypto currencies. The most common problems were sellers who provided refunds in the form of store credit instead of the currency and merchants who fail to deliver the product when promised, if at all.
Should you choose to pay with bitcoins or another virtual currency, keep the following tips in mind:
Get to know the seller before you pay with bitcoins.
- Research the seller’s reputation. Make sure you know the location of the seller and how to contact someone should a problem arise.
- When you pay with bitcoins, you can only receive a refund from the seller or payment processor. That’s why you should buy from a trusted company.
- Check to see if the payment goes directly to the seller or through a payment processor, which can provide added protection.
Review the policy for returns and refunds.
- In the case of a damaged product, what will the seller do to correct the situation? Are you entitled to a refund in US dollars, store credit or virtual currency?
- How are refunds processed? When refunding a credit card purchase, a seller typically credits the account. As a result of people switching their virtual wallet accounts, a seller can’t always send bitcoins back to your original wallet.
- What is the value of your refund? Because the value of bitcoins changes based on demand, the seller should let you know the exchange rate used for refunds before you make a purchase.
Pay careful attention to the privacy policy.
It is common for virtual currencies like Bitcoin to publish transactions on a public ledger and include the wallet addresses of the recipient and sender, as well as the amount. Carefully review the privacy policy of the seller to determine what personal information might be gathered and shared. In cases where the seller utilizes a payment processor, read over its policy too. According to a recent report by the FTC, many shopping apps have outlined a policy that grants them extensive rights to gather, utilize and share your personal information.