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Online Shopping Carts

Learn about online shopping carts and how they can help your business.

Online shopping carts offer a convenient way for customers to buy products online. [©Jupiter Images, 2010]
©Jupiter Images, 2010
Online shopping carts offer a convenient way for customers to buy products online.

To enter the world of online commerce, or e-commerce, online sellers need to choose an online shopping cart system that manages ordering and payments.

Creating and Maintaining an Online Shopping Cart

To accept online payments, merchants choose a shopping cart system. Shopping cart software can be downloaded and managed from a merchant's hard drive or managed via a Web browser. Generally, these systems include a secure server that is verified through a security certificate such as Verisign or Geotrust. Security certificates help keep customers' payment information secure. However, merchants can purchase this service separately or purchase it directly through these companies should they not be included in the selected online shopping cart software.

Online shopping carts work by sending cookies (small files of information) to shoppers' hard drives. Throughout the first Web site visit, and perhaps even subsequent visits, the cookies are used to keep the shopping system current.

Online shopping cart systems often come bundled with other Web services, so many retailers have the option of using a system coupled with their Web site and e-mail management choices. However, there are many options available in online shopping cart software, and retailers should carefully consider the choices, prices and support offered by potential online shopping cart companies.

Online Shopping Cart Features

Shop.org, an association that is a member of the National Retail Federation, publishes research and papers that teach e-commerce retailers ways in which they can increase the volume of their online transactions. For example, customers are more likely to buy from online shopping carts that offer several different ways to pay, such as electronic check, credit card or PayPal payments.

Shop.org also notes that another shopping cart feature, an address verification service, is valuable as well. This service is used to deter fraud by reviewing the ship-to address for veracity.

Another feature that prevents fraud within an online shopping cart program is the CID or CVV verification. Consumers will know this feature as the area where they are asked to provide a three-digit verification number from the back of a credit or bank card.

A specific shopping cart feature retailers may find useful is the tax calculation function. This feature automatically determines the correct amount of taxes to charge, if any. Retailers may be required to charge taxes based on buyers' states of residence. E-commerce retailers need to be aware of state and federal tax laws and to choose online shopping cart systems accordingly. Shopping cart systems are aware of this need, and may be able to offer appropriate solutions.

Additional online shopping cart features include shipping cost estimators, the ability to prompt for an alternate payment and the ability to accept coupons, gift cards or offer codes. Companies and sellers interested in additional features will need to check with their chosen shopping cart programs for availability.

Software Packages Available

PC Magazine recommends a range of shopping cart products for all types of retailers. For example, new sellers can set up a store under the eBay brand, or, to keep more branding choices available, choose the Yahoo Small Business shopping cart and site-building tools. Volusion, an industry leader, is recommended by PC Magazine for sellers who can navigate more technical software.

Those who want all of their online software in one place, including Web site software, hosting software and e-mail campaign software, may want to consider an all-in-one service such as GoDaddy, which PC Magazine reviewed and rates with three out of five stars. In addition, many Web hosting companies automatically provide a basic shopping cart plan as part of their hosting services; sellers would therefore want to check with their hosting services to avoid paying for the same services twice.

Additional Information

Businesses should be aware of cost considerations when choosing an online shopping cart. Pay models vary widely. In general, many cart system charges consist of a set-up fee, a monthly charge and perhaps per-transaction charges that are often based on a percentage of the transactions.

An additional price consideration results from when customers dispute a charge. Some cart systems charge sellers when this occurs. In addition, sellers need to be aware of how and when they are paid. Cart systems may send sellers a check once a week, once a month or even once a quarter.

The American Marketing Association notes that abandoned shopping carts tend to be a problem for e-commerce retailers. Some shoppers go through the motions of purchasing, but do not follow through on the final transaction. The AMA recommends that retailers take such actions as sending e-mail reminders to remedy lost sales.

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