EIN stands for Employer Identification Number. You might think of it as the equivalent of a Social Security Number for businesses. Mystery shoppers are not required to obtain EINs, however, many choose to do so. With all the concerns about online privacy and identity theft, mystery shoppers are more likely than ever to want to protect their Social Security Numbers. Having an EIN is one way to do that. Here is what you need to know about what an EIN is, why you might want one, and how to go about getting one. (It’s faster and easier than you may think.)
EINs are issued to businesses by the Internal Revenue Service. They are required for companies with employees and certain other types of businesses. Most mystery shoppers are sole proprietors who work as independent contractors. That means that we are not required to have EINs, but we are eligible.
Why would you want an EIN? Many mystery shoppers are uncomfortable about giving out their Social Security Numbers (SSN) online each time they register with a mystery shopping company. Protecting your SSN is a good idea, because scammers can use it to steal your identity.
Although most companies have secure web sites (I would NEVER enter my Social Security Number or other sensitive data on a site that is not secure.) that is no such thing as data being 100% safe and secure. That is true whether we are talking about applying for mystery shopper jobs online, buying something with a credit card at a local restaurant, or any other way personal data may be used.
When you have an EIN, you may use it in place of your SSN in your business dealings. Most mystery shopping companies will have no problem with you entering an EIN rather than a SSN. You may also use your EIN in other business-related activities such as opening a business bank account and filing your income tax return. Do not use your EIN in non-business circumstances where a SSN is requested, or when applying for a job where you would be classified as an employee. The EIN is only for your business dealings.
EINs are free, and it is easier than ever to get one. In fact, you can apply for an EIN online and have your number in minutes.
Even though using an EIN in place of your SSN provides a measure of protection, if you are concerned about identity theft, you may wish to use a service such as LifeLock. I signed up a while back, and I like the peace of mind they provide.
One additional note – you should never send your SSN in an email either. We have had shoppers ask about submitting it that way but it is no more secure than an unsecure website.
Have a great day,
Cory Jensen, Owner
I-Spy Mystery Shoppers
the only thing I think you cant do is try to apply for credit card
using that EIN number (I think)
Cathy Stucker says
@mobliemark, you would not use the EIN for credit applications, unless the business applied for credit. Not likely in the case of independent contractors, as the business typically has no collateral or credit history.
For ICs, the only purposes are tax-related: filing income taxes (and as a Taxpayer Identification Number to clients), and perhaps opening a business bank account (although it is not necessary). It does not replace the SSN in any other circumstance.
@coryj, good point. Email is about the least secure thing around. And shoppers, if you fax your SSN to a mystery shopping company, make sure you get the fax number right.
Hello, Cathy. I was trying to apply for Beyond Hello Incorporated to be a mystery shopper for them and they wanted me to post my social security number. What happens if I click that I don’t want to give it out. Will that lessen my chance to be picked?
Cathy Stucker says
Most companies will ask for your Social Security Number, because they may need it to report your income to the IRS. If you are dealing with a reputable company (such as Beyond Hello) and inputting the number to a secure site, your information is reasonably secure. I say “reasonably,” because nothing is 100% secure. I have given my SSN to dozens of companies, and I have never had a problem.
As for your question about whether not giving your SSN means you may not be selected to do a shop, that depends on the company. Although some companies may not make assignments if they do not have your SSN on file, most are willing to accept the number by another method (e.g., fax or mail), or only require it if it appears that you will hit the $600 mark and a 1099 form will be required.
Okay, so I am hoping you can help me out with a few things here. I have been in the mystery shopping business for about 7 years now and have always used my SSN. As of November 2010 I have been told that many companies will start requiring an EIN. I read here that I would be eligible for one and I understand that it is free to do so, but how would this change the way I currently file my taxes for Self-employment?
First of all, I would need to come up with a business name, so wouldn’t the business name have to be registered with the state or something for a fee? (I am in Ohio)
Also, wouldn’t I also need a Business Checking account and some type of license to keep working as a mystery shopper if I start using a EIN and business name?
This is just very confusing to me. Thanks for any additional information you can provide.
Cathy Stucker says
I have not heard of any companies requiring an EIN, but I would not be surprised to see that at some point.
Your name would be your business name. If you are not required to register yourself as a business now, that should not change just because you are using an EIN.
Likewise, your tax return would not change, except that you could substitute your EIN for your SSN on the Schedule C.
Thanks very much for your input on my questions. Yes, there is at least one company out there that has said they will now require an EIN (starting Jan. 2011) although I have not heard anything else about it at this point.
In your opinion (if one or more compaines require this in the near future), should I give the EIN to all compaines I work with or will it make things harder next year when part of the companies are using my SSN and one the EIN?
It is also my understanding (in Ohio) that there are no additional permits or anything required to continue operating with the new EIN number.
Thanks as always. 🙂
fyi, this method of obtaining an EIN is nearly $200!! It is free if you get one from the IRS at IRS.gov and it takes less than 1 minute to receive the #. Why are you telling people to pay an exorbitant fee to apply through a 3rd party when it is free from the IRS???
Cathy Stucker says
Laura, I am not sure what you mean. The article links to the IRS site, where you can get the EIN at no cost. Who tried to charge you?