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5 reasons you overspend online

Internet retailers are no fools. They entice you with quick shopping, free shipping, rewards cards and guarantees, and they never forget you -- or let you forget them.

By Melinda Fulmer

You're not quite sure how it happened. One minute you're surfing the Web, the next you're opening a credit card bill for $100 in goodies you hadn't bargained on or budgeted for.

What makes you pull the trigger when there's nothing you absolutely have to buy? Online retailers have spent a lot of time figuring that out.

One thing's clear. People do tend to spend more on the Web, says Sucharita Mulpuru, senior retailing analyst with Forrester Research. The average online shopping transaction now runs as much as 15% more than the average brick-and-mortar purchase, she says.

Here are five of the top strategies that online retailers, who know that online customers tend to be more affluent, use to get you to fork over that hard-earned cash, and do it more frequently.

You don't have time to think

After years of making shoppers troll through page after boring Web page to get what they want, retailers have begun to fast track the whole experience.

Search functions allow consumers to scan for products by size, color and attribute, giving them everything they most want to see gathered on one page. And these days, you don't even have to click on a product to see its details. You just move your mouse over it. All the while, a brightly colored button at the top urges you to "Add to Cart: You can always remove it later."

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"Part of it is about speed," says Patti Freeman Evans, a senior analyst with JupiterResearch. "If you have to click on another page, you may forget what you were looking at before," she says. "It may allow you more time to discover two things instead of just one thing."

Once you have items in your cart, retailers want to move you through the checkout line before you can reconsider. If you've already entered your credit card or shipping information with a particular retailer, you're out the electronic door with a mere twitch of the mouse.

"If it's a smoother process and doesn't take as much time, there's more chance consumers will complete the process," says Edward Kountz, a senior analyst who studies online payments for Jupiter.

Increasingly, you don't even have to pay if you've set up the popular "Bill Me Later" feature with a merchant. And many merchants are starting to accept payments from debit cards so that customers don't have to be reminded by a credit card bill of how much they have shelled out for impulse buys each month.

One online shopping consultant, Bryan Eisenberg of Future Now, says his client's sales went up dramatically just by making the checkout page look shorter and therefore less intimidating.

Pioneering Web merchant knows the value of getting customers in and out quickly. For years it has allowed customers to bundle addresses and billing information together so customers can check out with one click.

"Customers can go from wanting something to buying something as quickly as possible, without thinking about it," says Amazon spokeswoman Patricia Smith.

They guarantee you won't regret it

People hate to make a mistake on a purchase, whether it's on an MP3 player or a bag of dog food for their pooch. This indecision has traditionally kept many shoppers on the fence for days, if not weeks, before buying.

Enter the online customer review. We don't trust our own instincts when it comes to buying, but as it turns out, we put a lot of stock in what people just like us think. More than 40% of all online shoppers say product reviews are important to them, according to Jupiter.

However, 80% of online reviews are generally positive, according to Sam Decker, vice president of Bazaarvoice, a company that helps retailers add and administer reviews. So there's lots of incentive to buy and keep on buying as we look at lists of top-rated, must-have items.

"The reviews give people a reason to up-sell themselves," Decker says. "It's what you call an excuse to buy."

After Petco instituted its five-paw rating system and rolled out a list of top-rated products on its home page, people who viewed the list made a purchase 35% more often than those who didn't view the list. And they spent an average of 40% more per order, according to data from Bazaarvoice.

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The irony is that for once it's not the big retail giants urging us to spend; it's our peers who probably can't afford it any more than we can.

Of course, it's easy to get buyer's remorse, especially if you are purchasing more stuff than you had bargained on. So, successful retailers remember to hit you with lots of promises and guarantees at the checkout.

Here you're reminded that a site is "hacker-safe," has a 110% price guarantee and free return shipping just in case a purchase doesn't work out, Eisenberg says.

"Sales are always about the transfer of confidence," Eisenberg says. People will shop with the site that "makes them most feel confident that they are making the right choice with their purchase."

Mary Sit, a transportation blogger from Houston with two young daughters, says the free shipping and returns at shoe site makes her feel comfortable buying more pairs than she normally would.

"There's no risk, and you can send everything back if you want," she says.

On a typical transaction with Zappos, she will buy the five pairs of shoes she's most interested in, or a couple of pairs in different sizes so she can get a good fit. Most of the time, she says, she returns four of the five items as planned, before the charge hits her credit card bill.

Continued: They won't let you forget

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