Labels slowly build trust in the Web

When JustStrings.com debuted on the Internet in 1997, the company faced a significant hurdle: convincing prospective customers that it was not a scam.

Skeptical consumers consistently tested the company's reliability.

"We had people call on the telephone to make sure we were a reliable business," says Michael Jones, the firm's chief executive officer. "Some would investigate us with questions over e-mail."

A year later, JustStrings, which sells 8,000 varieties of strings for musical instruments, found an immediate solution to its credibility concern: The website began displaying a reliability seal from the Better Business Bureau (BBB) OnLine.

Since then, the company has consistently received unsolicited e-mails from first-time customers praising the seal. "Not knowing anything else about the business, the seal gives them a comfort level," says Mr. Jones.

Americans are turning to the Internet to make more of their purchases. More than 85 percent of US adults with Internet access have bought a product online, according to polling firm A.C. Nielsen.

But, broadly speaking, consumer trust in the Internet remains low.

A recent survey by Consumers Union found that only 29 percent of Americans trust Internet sites that sell products. The measure falls well below the public's level of trust for the federal government, small businesses, and large corporations. (The survey took place immediately after Enron's collapse.)

The BBB's reliability program, experts say, is one of the most prominent efforts yet to bring a new level of standardization to the Internet.

Nearly 11,000 sites display its seal, up from just 700 in 1997. Interest in obtaining the seal soared in the late 1990s as the dotcom implosion sent sites scrambling to convince consumers of their survivability.

It is among several programs run by consumer groups that audit sites' customer-service policies and award seals of approval to those that adhere to the best standards of customer service. Other groups assign performance ratings based on customer feedback.

As a whole, they represent Internet advocates' most visible attempt to make the Web a more reliable place for consumers to make purchases after half a decade of Internet failures and dissatisfied consumers.

"We had a Darwinian sweep of economic reality go through the Web," says Beau Brendler, director of Consumer WebWatch for Consumers Union. "Websites are learning to pay more attention to issues of credibility and reliability."

The first Internet sites to sell products online created patterns of customer service – generally lax – that are just now being reversed.

These sites were often designed by computer programmers rather than marketing executives, experts say. The designers frequently attempted to draw customers with technological bells and whistles while excluding the kind of practical information – return policies, for example – that's generally easy to find in a bricks-and-mortar retail setting.

"Disclosure happens naturally in the physical world. When there's no disclosure online, it creates a sense that the consumer is being hornswoggled," says Mr. Brendler.

The BBB initiated its reliability program in 1996, after witnessing the emergence of hundreds of websites that were making outrageous service claims. It refined its rules just last year.

To display the group's reliability seal, companies must adhere to five requirements: truthful and accurate product information; the disclosure of contact information; clear privacy and security statements; clearly stated prices, shipping information, and refund policies; and availability of a money-back guarantee or dispute resolution.

The BBB's seal satisfies many consumers' website concerns. More than half of America's Web users would be "extremely likely" or "very likely" to buy from an online company they did not recognize if the company carried the BBB's reliability seal, according to a BBB-sponsored study by research firm Greenfield Online.

So far, the program has received significant support from large companies such as Microsoft and AT&T, which stand to profit from a surge in online commerce.

Smaller companies that work with a large number of out-of-state customers – such as car dealers, mortgage brokers, and Realtors – have bought into the program as well, according to Steve Salter, BBB OnLine's director of operations.

Other third-party oversight programs recognized by experts as legitimate include TRUSTe – an independent, nonprofit privacy group – and WebTrust, run by the American Institute of Certified Public Accountants. (Experts recommend clicking on seals to verify that they are linked to the program's own website, because some companies display the icons fraudulently.)

Bizrate.com, Dealtime.com, and Epinions.com accumulate customer ratings of thousands of Internet products and websites.

Despite the proliferation of such programs, some observers question their ability to crack down on offenders. Yahoo!, for example, which bears a TRUSTe seal, recently changed its privacy policy so that all of its users would automatically be sent communications from its affiliated companies, forcing consumers to opt out of a service many had already rejected.

TRUSTe criticized the move but did not revoke its seal, says Rob Leathern, an analyst with research group Jupiter Media Metrix.

Even with seal programs, consumers remain wary about sharing their personal information online. Among online users, 70 percent are concerned that their privacy is at risk on the Internet, while only 31 percent have actually read websites' privacy policies, according to Mr. Leathern.

That gap between perception and behavior shows that websites may have a hard time overcoming the stigma of lax security. Many consumers choose to do business on sites run by familiar companies.

"There's a flight to quality on the Web," says David Alschuler, senior vice president of e-business for the Aberdeen Group, a Boston-based consulting firm. "Consumers are looking to Web merchants who are better known and have a physical presence."