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Perceived Purchase Risk

Perceived purchase risk is present when people fear and are concerned about wasting or losing money when purchasing or using products or services online. This risk includes making transaction mistakes, not receiving goods, and processing errors. Many older adults are concerned about using online banking and making errors which could result in them losing money. Others are worried about not understanding products, services or payment methods when attempting to purchase items.

For Timothy, these perceptions of risk manifest in the following ways:

Example 1
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“I worry my transactions and payments will be processed incorrectly.”

Example 1

Purchase risks may manifest as a fear of the transaction or payment not being processed correctly. For instance, Timothy likes to book overseas trips online, but he only does so through a local travel agent. He does not trust sending funds out of the country as there are too many things that can go wrong in the process.

Example 2
“I worry the goods I purchased online will not show up.”
Timothy 1

Example 2

Purchase risks may also manifest as a fear of not receiving the goods ordered in an online store. For example, Timothy is a relatively frequent online shopper, but he prefers to shop from trusted stores in Australia. In the past, he has ‘learned his lesson’ by ordering products from overseas that did not show up.


Can you relate to those example above?  Go to strategies to learn about how Timothy can address these issues.

Individual Strategies for Managing Purchase Risk

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Do your research. Scrutinise online reviews when considering purchasing something. For example, If the review is filled with nothing but glowing praise or complete hatred, it may be worth a closer look. Pay attention at facts more than opinions. This includes using tools that compare prices and reviews. Remember to include the total price (delivery, GST, import taxes and other fees).


Be wary. ACCC website has a great resource to help you navigate online reviews.


PayPal. Use PayPal for added security as you don’t share your financial details with the provider. PayPal also reimburses you when your goods are not delivered. Alternatively, arrange a low limit credit card dedicated for purchasing online products.


Prepaid cards. Another safe option for online purchases are prepaid cards from supermarkets.


Banks and financial institutions.
  • Go onto your financial institutions’ website and explore their tutorials on online banking. Alternatively, go into a branch and ask for assistance and take notes
  • Remember to regularly check your accounts for unusual activities
  • If you make a mistake or notice something unusual in your bank account – go to your financial institution immediately.


Privacy settings. Utilise privacy setting on your social media accounts to increase privacy of your purchases and purchase data.


Hidden costs. Make sure that you always double-check any purchases and transactions for hidden costs and fees. For example, is the app free or only free on its 10 day-trial? Is freight included? What sort of processes and costs are involved when returning items?


Back up your data. Ensure you have backup of your data in the cloud or on a hard drive.


Keep an old phone handy. Consider keeping an older smartphone around just in case you lose your main phone. While you wait for a new phone - the provider can provide you with a new SIM card. This will help you continue receiving messages, participating in double authentication and other practicalities.

Relational Strategies for Managing Purchase Risk

Strategy Illustration 7


Seek recommendations. Read reviews and seek advice from others who have more ICT knowledge than you or are more used with those stores and environments.


Research. Actively google the store name and customer reviews. Do your due diligence to make sure the store, the product and the online channel is legit.


Share your knowledge. Share your online shopping experiences with your family and friends. Share advice and learn from their experiences.


Communities. Consider creating, with a group of friends, a trusted database of sites that are trustworthy and efficient in delivering online goods.
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Strategies to Managing Perceived Purchase Risk

Perceived purchase risks are aligned both with the person’s ICT ability and the person’s confidence to overcome the perceived risk when engaging with the digital device. There are individual strategies people can do themselves to manage this risk, as well as relational strategies which consider the role of social influence on a person’s ability to try new things and interact with ICT.

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You may be interested in
Other potential risks that Timothy is facing:

will this digital device work the way I want it to – it includes forgetting instructions and managing passwords.
concerns about feeling incompetent, getting frustrated and being overwhelmed with digital technology.
worries about online transactions, not receiving the purchased goods and processing errors.
fear of buying too much online and the costs with upgrading software and devices.
concerns that digital devices encourage physical inactivity and becoming addicted to the devices as well as the strains on eyesight.
Timothy Risk 4
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