We spent more than $3 billion in online retail sales last year. Just over half was spent with New Zealand retailers. This was up 13 percent from 2014.

So if you’ve found the perfect present online for your favourite niece, or concert tickets for yourself, consider how you’re planning to pay. What protections does it offer? How secure is it? And what is it costing you?

Credit & debit cards

Credit and debit cards are the most popular way of making online purchases. But which is best for you?

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Direct deposits

Some businesses offer payment through direct deposits. You pay directly from your bank account to the seller’s bank account through internet banking. This can be a way to avoid credit or debit card surcharges. However, you won’t have any chargeback protections.

As the seller provides you with their bank account details, be careful you input them correctly. If the money goes to the wrong account, your bank can charge you an “electronic recovery fee” to try to get the money back. However, if a person receives the money by mistake, they are under no obligation to return it. All the bank can do is ask.

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PayPal

PayPal is offered by many merchants as an online payment option.

Once you’ve created a PayPal account, you link your bank account, debit card, or credit card details to fund your payments. The merchant never sees these details – you just enter your PayPal password when you’re paying. You’re also notified by email when any transactions occur.

It’s free to use PayPal to buy something unless it involves a currency conversion. It can also be a way to avoid card surcharges as the retailers may not add it.

PayPal also has a Buyer Protection Policy. If an eligible item doesn’t show up or shows up significantly different than described, it’ll help you recover your money. You could also request a credit or debit card chargeback if you used them through PayPal. However, you can’t make a claim with PayPal and ask for a chargeback at the same time.

Our tips

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Report by Kate Sluka.