Electronic Allowances

By Rebecca Winters

For 11-year-old Carolyn Cross of Palo Alto, Calif., shopping online is way cooler than your average trip to the mall, and for one very important reason: "You don't have to get your parents to drive you, which they, like, never do," she says. Carolyn's dad Peter might beg to differ about that, but he does agree that letting Carolyn make purchases at RocketCash, an e-commerce site designed for teens, makes things easier on the family. "Carolyn gets to feel in control, but I feel good 'cause her shopping is limited to certain stores and certain amounts," Cross says.

It's probably only a matter of time before the generation that is pointing and clicking its way into young adulthood abandons the mall for the mouse. With the launch of three websites this year, and some recent legislation that should put parents more at ease, kids can now shop online just like Mom and Dad.

The three new sites, iCanBuy.com DoughNET.com and RocketCash.com partner with online merchants--such as cdnow, Fogdog Sports and teen clothier Delia's--that are popular with young people. First, parents register, provide credit-card information and indicate how much their children can spend; then the kids get to shop.

All three sites are secure and approved by TRUSTe, a nonprofit organization that certifies that websites meet certain privacy standards. iCanBuy takes the extra step of shielding young shoppers from merchants' marketing e-mail. And under a federal law made final last month, the Children's Online Privacy Protection Act, all sites requesting identifying information from children will soon have to meet strict guidelines. If the website operators intend to post or sell information from a child under 13, they will have to get written or oral parental consent, or use a new kind of digital identification technology.

Once payment and privacy are accounted for, each of the three new e-commerce sites has its own strategy for pushing merchandise to teens and the grownups who love them. At DoughNET, special promotions like free movie tickets with selected purchases or contest entries lure young shoppers. On iCanBuy, kids can peruse celebrity wish lists (tip: Britney Spears wants a WNBA basketball, body glitter and, oddly enough, her own CD). At RocketCash, a top-10 list of user purchases lends some insight into what's hot with the masses. Recent chart toppers include a Limp Bizkit CD and wooden bracelets.

These aren't big-ticket items, and the shoppers are incredibly cost-conscious. (Wouldn't you be if your disposable income came from babysitting twice a week?) But Internet entrepreneurs and marketers are attracted to the potential of the teen consumer: teens control or influence $457.9 billion in consumer spending a year, and 81% of those ages 13 to 18 say they have used the Internet, making teens the most wired generation ever.

Still, not everyone is happy about the move txzo make e-shoppers out of kids. "By bringing shopping into the home, you're giving your kids a chance to spend instantaneously and impulsively," says Betsy Taylor, executive director of the Center for a New American Dream, a nonprofit group that offers tips for parenting in a commercial culture. "We're creating a generation of hyperconsumers, and this is just one more step toward that." In a survey conducted by Internet market-research firm Esearch, 49.7% of parents said children under 18 should not be allowed to make online purchases.

Tempering their commercialism, two of the sites offer practical financial advice and services. At iCanBuy and DoughNET, young people can open FDIC-insured bank accounts, learn about investing and donate to a charity. Shopping is still the main draw for youngsters, commonly more concerned with stuff than savings, but the sites' grownup money advice may be winning a few converts.

Thirteen-year-old Elisabeth Laskey of Gray, Me., gets $25 a month deposited into her iCanBuy account in lieu of an allowance. So far Elisabeth has bought some CDs, pencils and shirts. "I've only been on for a couple months, so I don't have much money saved yet," Elisabeth says. "But I'm thinking about saving some more and maybe donating some to charity." Elisabeth has learned one major financial lesson from her online shopping account: "Once it's in there, it's my money, and I get to decide what I want to do with it. That's cool."