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Anonymous Purchasing: Three Ways to Buy Unmentionables

By (view all posts by NerdWallet)
at 8:57AM Monday January 3, 2011
under Personal Finance

Image courtesy of ICanHasCheezburger

Some things in life aren't meant to be talked about and because of that, we would rather not be seen purchasing them either. Luckily, there are ways to purchase items online or in stores without anybody knowing that it's you. After all, a name without a face is still anonymous, right?

If you're in the market for those hush-hush items, here area few ways to make purchases without anybody knowing that it's you. You also get the added benefit of the item not showing up on your credit card statement. So if you're simply purchasing a gift for a loved one who handles the monthly bills, you can still keep that gift a secret.

PayPal and Google Checkout

PayPal was established as a way to purchase products online without the direct use of credit cards. They are the largest online payment processor in the world with more than 150 million active accounts. If you aren't familiar with PayPal, it works by allowing you to receive money or send money to anyone through your email account. You can use your PayPal account to pay a business or an individual, and it will either deduct the funds from your credit card or initiate an automatic transfer from your bank account.

On your bank statement, the purchase appears simply as "PayPal," rather than the person or merchant you are paying, which maintains your anonymity. If you would like to stay completely anonymous, however, keep in mind that PayPal will display the recipient's name in your online payment history. So consider another option if anyone else access to your account.

Google Checkout is the internet behemoth's alternative to PayPal. And like PayPal, if you're looking to keep some purchases private,Google Checkout is similar to PayPal in the fact that "Google" will be used on your credit card or banking statement instead of the actual merchant's name.

Checkout wasn't initially started as an alternative to credit cards, however. Instead, it was meant more as a way to keep users from having to maintain multiple user names and passwords across different online retailers. For sites that enable Checkout, users simply need their Google login credentials. You're still anonymous using this method and if you close your checkout account, your payment history is gone as well.

Prepaid Gift Cards

First off, keep in mind that gift cards are different from prepaid debit cards in terms of privacy. Gift cards are purchased with no ties to your identity, especially if you pay for them with cash, whereas you need to give your social security number to activate a prepaid debit card.

Gift cards are a lower tech manner of anonymous purchasing, but are possibly the best way if you purchase the correct card. Of course if you shop at the unmentionable store and purchase a gift card at that store, it will still appear on your credit card statement. Instead, purchase a generic prepaid gift card offered through a major credit card company, like American Express.You can find these at your local drugstore or supermarket, but note they often require an additional $5 upfront fee.

These generic gift cards allow you to make purchases essentially anywhere that credit cards are accepted, and you don't have to worry about the purchase being tracked.

The Bottom Line

The drawback to some of these payment portals is their customer service. If someone gets a hold of your account information and commits any sort of fraud, both PayPal and Google Checkout offer protection. But the headache that comes with trying to get help for your fraud case may outweigh any advantages of using them. And as of now, there is still little guaranteed protection for prepaid gift cards and re-loadable prepaid debit cards, though this will likely start to change over the next several years as the CARD Act of 2009 opens the doors for further regulation in the electronic payments industry.

If anonymity is not critical, the safest way to make purchases is still to use a credit card. You are limited to $50 in fraud liability by Regulation EFTA, and credit card issuers are generally required bylaw to have more customer-friendly fraud and dispute resolution policies.

Tim Chen is founder and CEO of NerdWallet.com, a website that helps consumers to find rewards credit cards.