Customer relationship management (CRM) covers methods and technologies used by companies to manage their relationships with clients. Information stored on existing customers (and potential customers) is analyzed and used to this end. Automated CRM processes are often used to generate automatic personalized marketing based on the customer information stored in the system.

Implementing CRM

Several commercial CRM software packages are available which vary in their approach to CRM. However, CRM is not just a technology, but rather a holistic approach to an organisation's philosophy in dealing with its customers. This includes policies and processes, front-of-house customer service, employee training, marketing, systems and information management. CRM systems are integrated end-to-end across marketing, sales, and customer service.

A CRM system should:

• Identify factors important to clients.
• Promote a customer-oriented philosophy
• Adopt customer-based measures
• Develop end-to-end processes to serve customers
• Provide successful customer support
• Track all aspects of sales
• Create a holistic view of customers' sales & services information

CRM Architecture

There are three fundamental components in CRM:

• Operational - automation or support of basic business processes (marketing, sales, service)
• Analytical - analysis of customer data and behavior using business intelligence
• Collaborative - communicating with clients

META Group (acquired by Gartner in April 2005) developed this conceptual architecture in the late-1990s, and dubbed it the CRM Ecosystem.

Operational CRM

Operational CRM provides automated support to "front office" business processes (sales, marketing and service). Each interaction with a customer is generally added to a customer's history, and staff can retrieve information on customers from the database as necessary

Voicenotes can be used for a sales person to provide more details on their clients after meeting with them for the first time (and therefore may turn into a customer in the future), or to provide a quick debrief after a meeting so not to forget what was said. A voicenote can be left via a mobile and is converted to text whereby the user can add this to the profile of the client to add richness to the information about said client. Especially useful in financial services industries and institutional sales.

Sales force automation (SFA) or Sales force management systems

These automate some of a company's critical sales and sales force management tasks, such as forecasting, sales administration, tracking customer preferences and demographics, performance management, lead management, account management, contact management and quote management.

Customer service and support (CSS)

CSS automates certain service requests, complaints, product returns and enquiries.

Enterprise marketing automation (EMA)

EMA provides information about the business environment, including information on competitors, industry trends, and macroenvironmental variables. EMA applications are used to improve marketing efficiency.

Integrated CRM software is often known as a "front office solution", as it deals directly with customers.

Many call centers use CRM software to store customer information. When a call is received, the system displays the associated customer information (determined from the number of the caller). During and following the call, the call center agent dealing with the customer can add further information.

Some customer services can be fully automated, such as allowing customers to access their bank account details online or via a WAP phone.

Analytical CRM

Analytical CRM analyses data (gathered as part of operational CRM, or from other sources) in an attempt to identify means to enhance a company's relationship with its clients. The results of an analysis can be used to design targeted marketing campaigns to improve marketing effectiveness. For example, these can include:

• Acquisition: Cross-selling, Up-selling
• Retention: Retaining existing customers (antonym: customer attrition)
• Information: Providing timely and regular information to customers

Other examples of the applications of analyses include:

• Contact optimization
• Evaluating and improving customer satisfaction
• Optimizing sales coverage
• Fraud detection
• Financial forecasts
• Price optimization
• Product development
• Program evaluation
• Risk assessment and management
• Strategic Marketing
• Operational marketing

Data collection and analysis is viewed as a continuing and iterative process. Ideally, business decisions are refined over time, based on feedback from earlier analyses and decisions. Most analytical CRM projects use a data warehouse to manage data.

Collaborative CRM

Collaborative CRM focuses on the interaction with customers (personal interaction, letter, fax, phone, Internet, e-mail etc.)

Collaborative CRM includes:

• Providing efficient communication with customers across a variety of communications channels
• Providing online services to reduce customer service costs
• Providing access to customer information while interacting with customers

Driven by authors from the Harvard Business School (Kracklauer/Mills/Seifert), Collaborative CRM also seems to be the new paradigm to succeed the leading Efficient Consumer Response and Category Management concept in the industry/ trade relationship.

Uses of CRM

In its broadest sense, CRM covers all interaction and business with customers. A good CRM program allows a business to acquire customers, provide customer services and retain valued customers.

Customer services can be improved by:

• Providing online access to product information and technical assistance around the clock
• Identifying what customers value and devising appropriate service strategies for each customer
• Providing mechanisms for managing and scheduling follow-up sales calls
• Tracking all contacts with a customer
• Identifying potential problems before they occur
• Providing a user-friendly mechanism for registering customer complaints
• Providing a mechanism for handling problems and complaints
• Providing a mechanism for correcting service deficiencies
• Storing customer interests in order to target customers selectively
• Providing mechanisms for managing and scheduling maintenance, repair, and on-going support

Technical Considerations

The following factors need to be considered:

• Scalability: the system should be highly scalable, as the volume of data stored in the system grows over time
• Communication channels: CRM can interface with a variety of different channels (phone, WAP, Internet etc.)
• Workflow - a company's business processes need to be represented by the system with the ability to track the individual stages and transfer information between steps
• Assignment - the ability to assign requests, such as service requests, to a person or group.
• Database - the means of storing customer data and histories (in a data warehouse)
• Customer privacy considerations, such as data encryption and legislation.

Improving Customer Relationships

CRM applications often track customer interests and requirements, as well as their buying habits. This information can be used to target customers selectively. Furthermore, the products a customer has purchased can be tracked throughout the product's life cycle, allowing customers to receive information concerning a product or to target customers with information on alternative products once a product begins to be phased out.

Repeat purchases rely on customer satisfaction, which in turn comes from a deeper understanding of each customer and their individual needs. CRM is an alternative to the "one size fits all" approach. In industrial markets, the technology can be used to coordinate the conflicting and changing purchase criteria of the sector

Privacy and Ethical Concerns

The data gathered as part of CRM must consider customer privacy. However, CRM does not necessarily involve gathering new data, but also includes making better use of customer information gathered as a result of routine customer interaction.

The privacy debate generally focuses on the customer information stored in a centralized database, and fears over a company's handling of this information. For example, there is virtually no way a consumer can determine if the company shares private (personally identifiable) data with third parties.

Successful applications of CRM in practice

Whilst there are numerous reports of "failed" implementations of various types of CRM projects, these are often the result of unrealistic high expectations and exaggerated claims by CRM vendors.

In contrast there are a small number of successes. One example is the National Australia Bank (NAB) which has pursued a focused CRM strategy for over ten years.

CRM for Non-profit Organizations

CRM is also important to non-profit organizations, which sometimes use the terms "constituent relationship management", "contact relationship management" or "community relationship management" to describe their information systems for managing donors, volunteers and other supporters. salesforce.com, a popular CRM service that is on demand, offers its products for free to nonprofit organizations.

Earn Money Online Using Any Program

Just Follow These Simple Steps

How To Make Money Online

Using Niche Content Websites

Does the idea of continuous passive income from websites you can set-up and forget about sound good to you? Well that is what niche content websites are all about. Let’s take a look at this online income method.

I was over at Ben Bleikamp’s new blog, College-Startup, where he has been writing about his efforts to create niche content websites.

The concept is reasonably simple. Do some research, find some very tight niches that aren’t well serviced at the moment, build a content website targeting the niche, stick some AdSense, Chitika and similar advertising programs up and just let it sit there earning a few dollars a day.

Now you must be thinking how does this make good money? Well it doesn’t make much, but if you are lucky and do your research well, $2-$3 a day is enough to consider it a success. Once you have done this you can move on to your next niche content website. Over a period of a year if you set yourself a goal to create one of these content websites per week at the end of 12 months you would have 52 niche content sites. If they all make an average of $2 per day that’s $104 per day total, around $38,000 USD per year. Best of all the websites require no maintenance, it’s all about picking an untapped niche and filling it with content.

How To Make This Work For You

Before you run off trying to pull this off remember that in order for it to be successful you need to be confident you can successfully generate good search engine traffic to the niches you select. The recursive income only comes when you have search visitors clicking your ads. By the way, random search visitors are usually better ad clickers than loyal readers and that’s one of the reasons why this technique can work. Randoms come to your site once, read your content, click an ad and probably leave never to return again. Loyal readers come back for new content and often screen out the ads. It’s not in your interest to establish a repeat audience using niche sites. You don’t want the responsibility of adding new content since chances are finding content about a niche you don’t necessarily have much interest in can be tough. In this case it’s just search traffic you care about, forgot about being sticky.

Step One: Find A Niche

First you need to find niches where there is some traffic. You should use the usual tools, such as the overture inventory keyword data miner, to conduct research on how many searches are done for certain key phrases (look for sites with at least 1000 searches per month). Don’t aim for keywords and topics that are highly competitive, look for low competition with *some* traffic. Take for example Jonathan Wold’s Sump Pumps Information niche. How random is that! Do you even know what a Sump Pump is? I don’t, but he suspects enough people are searching for sump pump information online and he only needs a handful of them to click his ads per day.

The key is to find topics that people search for and advertisers use Pay-Per-Click marketing and other online advertising methods to sell to these people. Your niche content site helps to bring these two groups together and you take your middle man fee, with the help of the search engines for traffic and advertising programs for a monetization system.

Always be certain there are monetization possibilities before starting a niche content site otherwise you will be wasting your time. Look for AdWord campaigns by doing Google searches for the niche you are considering - if you see several ads down the right column that target the niche then you know advertisers are paying to reach these markets. To be really thorough, log into AdWords and set some test campaigns up and see what the bid prices are for your keyword research subjects. If the prices are reasonable then there probably is some competition for those keyphrases from advertisers running AdWord campaigns.

Step Two: Scan For Competition

Once you find a few niches you think have potential search those keyphrases and see what results show up. If the natural search result sites that turn up are badly optimized (look for low PageRank, poor title keyphrases and heading tag keyphrases) and you are confident that a site with well optimized content would quickly jump to the top of the rankings and by quickly I mean about 3-6 months (remember the Google Sandbox is going to impact how quickly you get high rankings) then you might have your first candidate for a niche content site.

Step Three: Build A Site

I suggest you go with WordPress to manage your niche content site. WordPress is blog content management software that runs off a PHP/MySQL backend (this blog uses it). It’s very easy to set up, handles most of the search engine optimization for you and all you need to do is pump in the content and off you go. There are some occasions where a plain static HTML site may be more appropriate, for example when you only need a micro site of a handful of pages and it would be quicker to just set up the few pages using a HTML template design, but I’ll leave that up to you (read Bo’s Marketing-Syndrome post on WordPress vs Static HTML? for more discussion on this topic).

How To Find Content

At first thought this would probably be the hardest part of using the niche content site technique - how do you come up with content for a niche site that very likely you have next to no interest in or experience with? Now if you are not the writing type and can’t waffle on and bang out a few key pages of content yourself by utilizing what’s already available online, then you may want to try these options:

• Use articles from public article repository sites such as Ezine Articles and GoArticles

. Writers contribute articles to these sites that you can republish on your site as long as you keep the author’s byline intact. The downside of this is that other people also can do the same and your article won’t be original. However if your niche is small enough there won’t be that many other people out there discussing the topic (in fact you are banking on it) so if you are lucky enough to find some on-topic articles in repository sites, make use of them.


• Another popular method is to republish Wikipedia content. Wikipedia is an online encyclopedia contributed to by anyone and if you have ever used the site you know that it has entries on virtually any topic you can think of. Chances are your obscure niche content site topic will have some entries in the Wiki and under the GNU Free Documentation License you can republish the content on your site.
• Freelance writers all over the web are eager to take your money in exchange for their writing skills. Elance is the largest freelancer hub online and listing your article writing project there will flood you with responses. Most writers are pretty adept at producing content on almost any topic, even if they just regurgitate someone else’s writings in a new way. A few thousand words shouldn’t cost you too much money. If possible try and establish a long term relationship with a good writer if you plan on needing their services again.
• There are special article subscription services that give members the rights to make use of articles, some even promise a certain amount of new articles on a range of different niches will be provided on a regular basis so as to keep members subscribed. The idea here is that you get access to an article pool that only other members are granted access to. This is deliberately done so the articles are only utilized by a handful of people and often membership sites will cap their numbers at a few hundred. Members can do what they want with their articles knowing that at worst only a few hundred other sites are using the same materials.

  Personally I have never subscribed to an article site and I’ve read various reports, some good, some bad, about article membership services. I’m skeptical about the concept and I don’t like the idea that you have to either choose a niche that directly matches the articles available or try and modify articles to match your niche. I also have no idea where article membership sites source their articles but I have a feeling it would be a room full of trained monkeys writing the new articles each month (or ahh, freelance writers of course, and let’s not talk about cheap Indian labor). Given that most members subscribing to the articles will be chasing the same niches this seems like a formula to guarantee you will have at least a few hundred people competing in your niche - not much of an opportunity then is it!

The Importance Of Keyword Click Through Prices

For most niche content sites AdSense and/or Chitika will be the main monetization strategy. These programs pay on a per click basis and click through prices are calculated based on advertiser demand. The golden mix is to find a niche with few well established content sites but a lot of advertisers competing to find customers. This means click through prices will be high but the market is not likely to stay untapped for long and likely a bunch of competing content sites will pop up. In fact you may never find this combination.

A more likely scenario is a niche where there are high click prices because of lots of advertisers and a few well established content sites or moderate to low keyword prices but almost no competition. How you can succeed in these situations is to be better at search engine optimization than any of the other sites. If your site pulls more traffic you get more clicks.

The situation you want to avoid is a niche with few advertisers so low click through prices. No matter how much traffic you get and much you dominate a niche, if there are no advertisers paying to use Google AdWords you won’t get any AdSense income or it will be 10 cents a day from the one advertiser with no competition. Bear in mind however that there are general advertisements, for example Chitika can show cameras, computers and other electronic products that may appeal to a general audience and produce enough click throughs to make it worthwhile. This is a risky venture though since your niche is not relevant to your monetization method, the amount of income you earn will like be very random and inconsistent.

Underachieving Due To Low Entry Barriers

If you have read Perry Marshall’s Renaissance Club Newsletter you will know about two online marketing strategies he discusses, one called ‘underachiever’ and the other ‘overachiever’.

Note - if you haven’t signed up for the special offer to try Perry’s marketing newsletter it’s still available and you still get the Definitive Guide to Google AdWords, five marketing reports and five audio CDs thrown in just for trying out the membership for one month at $29.95 - check it out here for more information.

Overachiever

Overachieving is when you dominate a niche, become an expert and “go deep” by offering more than just one product or service. You may offer seminars, audio recordings, DVD video classes and a whole host of additional materials that make the lifetime value of a loyal customer a lot more than a once off purchase or text link ad click. This method means you can afford to compete by making a loss on the sale of your first product or lead capturing method because the value over time of that conversion is much higher. I’d say Perry’s offer that I mentioned above is a loss leader (overachiever) strategy too, he can’t be making money shipping off all these CDs and reports at such a low price and paying out affiliate commissions - but he knows that the 5% of customers that become fans and purchase everything he produces will spend hundreds to even thousands of dollars over time.

Underachiever

Niche content website building is an underachiever strategy. Profitable niches rarely stay uncompetitive for long and as niche content site building becomes popular you are going to be fighting with others for niches. Underachieving is when you deliberately choose to lightly skim a niche, perhaps by selling an ebook to a market that currently is not satisfied. Niche content sites service a unique niche with basic information and generate advertising income as a side effect, there is no intention to further capitalize on the audience. The idea of course is to rinse and repeat, building up a portfolio of profitable niches. The problem here is that you must keep working to find new niches to replace those that become too competitive to fight for.

For those that can manage a lot of sites and in fact enjoy the variety that comes from building sites on such an array of different topics, the niche content site strategy can work well. If you can build a really large portfolio, competitive action won’t impact you significantly because it will take a long time erode your entire income stream. Remember though that it’s not true passive income forever since you will need to replenish your portfolio with new niches if you want this strategy to work for you long term.

In my mind however a better way to go about this is to treat niche content site building as an education and research tool. Learn what it takes to get free traffic to a site from search engines. Learn how to optimize sites, find profitable niches and build content quickly. When you stumble across a niche with unexpectedly high demand and return consider switching your strategy from underachiever to overachiever. Start collecting email addresses to build a list. Get an ebook written, find affiliate products to sell, create a membership service, record screencasts to build information products, and “go deep” in the marketplace. Become the expert in that niche so you can own it and depend on it for long term income despite competitor actions.

Leverage Your Previous Hard Work

I’m sure you will find that many of the weird and wonderful niches you come across are already serviced by hobbyist sites, very unprofessional, perhaps hosted on free hosts with designs created in Frontpage or even (shudder) Microsoft Word. They usually have low PageRank but due to lack of competition will show up as top results in search engines. A quick search and easy technique to surpass these sites in the search engines is to leverage one of your already successful, high PageRanked sites.

Most online marketers have a site that they devote the majority of their time to, likely a blog or their main business project. This site enjoys good, hard-earned traffic and has lots of backlinks that were built up over time. Using this site as a tool to promote another site is an advantage, especially in the niche content market.

For example this blog is my main site. If I built a niche content site I would link to it from the sidebar that is on every page giving the niche site lots of valuable backlinks, PageRank points and helping it to very quickly enter the search engine indexes. In fact I’d hazard a guess that a site-wide link from this blog alone would vault a niche content site to the top of the results for it’s niche without much other work on SEO. There might be some sandbox issues initially, and true the relevancy of the links would not be very good, but given the competition likely doesn’t even know what SEO is and your carefully researched niche is small and untapped, the advantage is significant. Having a powerful site to leverage is a big helping hand for a niche content site marketer.

Conclusion

You will be surprised by what type of niches you can dig up. Often the most bizarre topics have real followings. Everything from how to raise turtles, where to find the best secondhand clothes, how to do magic tricks, how to snowboard, learning to cook vegetarian - and these are mainstream topics already well catered to. It’s your job to find the obscure, to think outside of your box and find markets that you would personally never consider being a part of yourself. Thankfully the search engines are full of keyphrases and all you have to do is get out there and research. Browse Wikipedia, follow the external links and expand your horizons. You may find some very profitable niches that no one else has thought of.

Reducing Online Credit Card Fraud

Credit card company figures show that 90 per cent of consumers are reimbursed when their cards are used fraudulently, while 75 per cent of online retailers have to eat the cost when they're the victims of credit card fraud. There is currently no way to avoid this ludicrously high risk, though it can be reduced.
April 4, 2000

Unfortunately, online payment remains a major area of Internet immaturity. Payment and data transfer security are allied problems. When buyer and seller meet physically to exchange money for goods, trust is less of an issue than when two entities deal blind online.

Though buyers - rightly - distrust online credit card payments, merchants suffer more from credit fraud. This is because most online payment is by credit or debit cards, and the payment protocols for these were originally intended for face to face sales where the cardholder and card are both physically present.

Physical presence offers security based on a customer signature and card imprint. But the merchant is almost always responsible for losses when sales are made on a 'Cardholder Not Present' basis even when the vendor has obtained authorisation from the card issuer.
Security And Privacy

There are two areas of concern: ensuring the privacy of data involved in the transaction to re-assure the buyer, and ensuring the buyer is engaged in a valid transaction - for the benefit of the seller.

The first is most easily solved using SSL (Secure Socket Layer) an encryption protocol built into current browsers and supported by most Web servers. Base Apache doesn't support it for patent reasons (RSA owns certain algorithms in the US) but Apache SSL does.

Using SSL once it's enabled is straightforward - simply change Web page references to https:// instead of http://, like so:

This posts the contents of a form back to you using SSL.
Digital Certificates

SSL is only half of the solution, though. Customers want to feel confidence in your company. This is achieved using a 'trusted third party' which begs its own questions.

TTP's are simple in principle. The TTP is a public company which provides a vendor with a digital certificate. This confirms to the customer that the company they think they're dealing with is who it claims to be. Digital certificates can be bought from many companies including Verisign and Thawte. They require a fair amount of company documentation.
Public Key Encryption

Both SSL and the digital certificates require encryption. This is provided using asymmetrical - aka public key - encryption. This requires two keys: public and private. The public key is published and can be used by anyone to encrypt anything but only the private key can decrypt it.

An SSL exchange is carried out using a public key given to your browser by the server. The digital certificate provider confirms that the key belongs to a valid certificate used by the company at the domain where the transaction is taking place. In effect, it's a three way transaction, but each party can only access the information it needs to do its job.
Trusting Customers

To accept online credit card payments with a minimum level of confidence you need two services: a merchant account - either your own or access to one via a third party - and real time authorisation.

Taking credit card payments online for overnight processing is commercial insanity. Anyone can create credit card details which will pass validation checks - including expiry dates - using one of dozens of freely available programs on the Net.

In practice, realtime credit card transactions are pre-authorised to a set value provided the vendor checks card numbers against a supplied hot list. Transactions over the limit must be authorised. This doesn't guarantee you'll be paid but it eliminates the more incompetent criminals.

Authorisation is a two part process. First the customer sends in the order by secure form (using SSL). The details on the card and the amount are then sent from your server to the authorising company (only larger concerns deal directly with banks). The authorising company runs the check with the card issuing bank then authorises or denies it immediately.
Merchant Services

Small or new companies and those with a small turnover may have to turn to a third party such as Earthport to handle credit and debit card sales, though banks are beginning to target ecommerce more aggressively.

For example, in the UK NatWest Bank has bought 13 per cent of WorldPay and now offers - through WorldPay - online payment services in most currencies. This enables its business customers to integrate online payments with their existing banking services. In fact, NatWest offers customers WorldPay software. This model is likely to be followed by other banks - though don't expect them to assume any of the risk.

Third party online payment facilitators are as reluctant as banks to expose themselves to risk. You may find it difficult to get accepted, the service may be stopped for no apparent reason, payment can be slow and you may have to work in a different currency. It also tends to be expensive. Retail swipe commission rates vary between under 1.5 per cent and four per cent while online rates tend to start at 4.5 per cent and just keep going up. Eight per cent and higher is common.
MOTO Matters

Online credit payments are classed as Mail Order and Telephone Order sales by credit card companies, yet suffer far higher chargeback rates. While the Visa and MasterCard quote overall card fraud at around 0.08 per cent of all transactions, online fraud (for which no separate figures are released) is estimated by online traders at somewhere between three and five percent. The figures are higher than for mail order or telephone sales. The fact that neither Visa nor MasterCard will provide such figures should give all online retailers pause for thought.

Mail order companies are safer because they can get signatures - an actual piece of paper changes hands. Telephone sales have CLI (Caller Line Identification) information to add to address verification (in the US at least) - though pay as you go cellphones have dramatically increased telephone fraud. Online retailers, though, often have no more than an email order containing a card number via a free email account.
Game, SET and Match

There is a technique to enforce non-repudiation of online credit card orders. Secure Electronic Transaction is an encrypted online payment method which keeps all information on a need to know basis, automatically confirms the card and its holder are valid, guarantees payments and is network protocol independent. It's also too complex to describe here.

So far it has made no impact on consumers because it requires them to hold and manage digital certificates, while many have trouble just hanging on to their Net access password. It will continue to make no impact until it can be used from any location in the form of a smartcard. This places it several years down the line.
Protection Service

As an online vendor, your exposure to credit card fraud depends to a large extent on what you're selling. Intangibles are the easiest target. Top of the list by far are adult sex sites. Although there are no published figures, anecdotal evidence suggests companies handling sex site signups often set swipe commission rates as high as 50 per cent, using the income generated to hide chargebacks.

Software sales, pay per view sites, gambling sites, informational sites and so on are equally at risk. Indeed, many will no longer take orders from free email account holders or overseas customers. Microsoft's Expedia set aside $6 million for credit card fraud in 1999 but most online retailers refuse to divulge fraud figures for fear of losing customer confidence.

Large ticket item sales are just as risky. For example, many online retailers now refuse to accept orders with different billing and delivery addresses. Even this doesn't help if someone is prepared to set up fake credit card accounts using empty house addresses - and there are criminal organisations exploiting the weaknesses of the credit card system in this and other ways.

It's a problem which can only get worse without a change to a more secure online payment system which both proves the identity of both parties and cannot be repudiated. Both sellers and buyers must have confidence in online sales. If online sales don't become more secure vendors will either insist on payment up front or become uneconomic as their increased sales costs penalise their customers for buying online.
Ten Anti-Fraud Tips For Online Vendors

1. Even though it might be a hassle, insist on a mailing address, zip or postal code and phone number of the buyer and then check them out to ensure they aren't fake.

2. Insist on a faxed customer signature and a faxed photocopy of the credit card (from a photocopy is fine).

3. If you can't contact the buyer by phone or the phone number is unreachable, then don't process the order

4. Use Address Verification services where they're available

5. Be extremely wary of shipping overseas - it can be hard to pursue claims abroad. Eastern Europe is seen by many as a high risk area.

6. Check the email address against the name on the credit card. If the real name doesn't match the email name then you definitely want more reassurance before processing the order.

7. Refuse to process orders from free email domains unless you have incontrovertible proof of the buyer's identity.

8. Never ship products to postal box numbers. Always insist on a physical shipping address.

9. Check the DNS table of the remote IP of the customer. Find out the remote server's geographic area and check it against the address of the customer. Few people connect to the Net using a long distance call. You also need to check the mailing address, phone number and email address of the server, though thieves can also set up servers too.

10. Be especially careful of those wanting higher priced fast delivery or otherwise being price insensitive. Thieves don't care how much it costs as they don't plan to pay.

How Credit Cards Work

Have you ever stood behind someone in line at the store and watched him shuffle through a stack of what must be at least 10 credit cards? Consumers with this many cards are still in the minority, but experts say that the majority of U.S. citizens have at least one credit card -- and usually two or three. It's true that credit cards have become important sources of identification -- if you want to rent a car, for example, you really need a major credit card. And used wisely, a credit card can provide convenience and allow you to make purchases with nearly a month to pay for them before finance charges kick in.

That sounds good, in theory. But in reality, many consumers are unable to take advantage of these benefits because they carry a balance on their credit card from month to month, paying finance charges that can go up to a whopping 23 percent. Many find it hard to resist using the old "plastic" for impulse purchases or buying things they really can't afford. The numbers are striking: In 1999, American consumers charged about $1.2 trillion on their general-purpose credit cards.

In this article we'll look at the credit card -- how it works both financially and technically -- and we'll offer tips on how to shop for a credit card. (Experts say this should be a project on the scale of shopping for a car loan or mortgage!) We'll also describe the different credit-card plans available, talk about your credit history and how that might affect your card options, and discuss how to avoid credit-card fraud -- both online and in the real world.

Let's start at the beginning. A credit card is a thin plastic card, usually 3-1/8 inches by 2-1/8 inches in size, that contains identification information such as a signature or picture, and authorizes the person named on it to charge purchases or services to his account -- charges for which he will be billed periodically. Today, the information on the card is read by automated teller machines (ATMs), store readers, and bank and Internet computers.

According to Encyclopedia Britannica, the use of credit cards originated in the United States during the 1920s, when individual companies, such as hotel chains and oil companies, began issuing them to customers for purchases made at those businesses. This use increased significantly after World War II.

The first universal credit card -- one that could be used at a variety of stores and businesses -- was introduced by Diners Club, Inc., in 1950. With this system, the credit-card company charged cardholders an annual fee and billed them on a monthly or yearly basis. Another major universal card -- "Don't leave home without it!" -- was established in 1958 by the American Express company.

Later came the bank credit-card system. Under this plan, the bank credits the account of the merchant as sales slips are received (this means merchants are paid quickly -- something they love!) and assembles charges to be billed to the cardholder at the end of the billing period. The cardholder, in turn, pays the bank either the entire balance or in monthly installments with interest (sometimes called carrying charges).

The first national bank plan was BankAmericard, which was started on a statewide basis in 1959 by the Bank of America in California. This system was licensed in other states starting in 1966, and was renamed Visa in 1976.

Other major bank cards followed, including MasterCard, formerly Master Charge. In order to offer expanded services, such as meals and lodging, many smaller banks that earlier offered credit cards on a local or regional basis formed relationships with large national or international banks.

Debt Consolidation

Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, which is most commonly a house (in this case a mortgage is secured against the house.) The collateralization of the loan allows a lower interest rate than without it, because by collateralizing, the asset owner agrees to allow the forced sale (foreclosure) of the asset to pay back the loan. The risk to the lender is reduced so the interest rate offered is lower.

Sometimes, debt consolidation companies can discount the amount of the loan. When the debtor is in danger of bankruptcy, the debt consolidator will buy the loan at a discount. A prudent debtor can shop around for consolidators who will pass along some of the savings. Consolidation can affect the ability of the debtor to discharge debts in bankruptcy, so the decision to consolidate must be weighed carefully.

Debt consolidation is often advisable in theory when someone is paying credit card debt. Credit cards can carry a much larger interest rate than even an unsecured loan from a bank. Debtors with property such as a home or car may get a lower rate through a secured loan using their property as collateral. Then the total interest and the total cash flow paid towards the debt is lower allowing the debt to be paid off sooner, incurring less interest. In practice, many people are in credit card debt because they spend more than their income. If that habit continues, the consolidation will not benefit them much because they will simply increase their credit card balances again.

Because of the theoretical advantage that debt consolidation offers a consumer that has high interest debt balances, companies can take advantage of that benefit of refinancing to charge very high fees in the debt consolidation loan. Sometimes these fees are near the state maximum for mortgage fees. In addition, some unscrupulous companies will knowingly wait until a client has backed themselves into a corner and must refinance in order to consolidate and pay off bills that they are behind on the payments. If the client does not refinance they may lose their house, so they are willing to pay any allowable fee to complete the debt consolidation. In some cases the situation is that the client does not have enough time to shop for another lender with lower fees and may not even be fully aware of them. This practice is known as predatory lending. Certainly many, if not most, debt consolidation transactions do not involve predatory lending.