Shopping online makes it easy to compare prices, find deals and get what you need (or want) without leaving the comfort of your home. However, it also provides plenty of opportunities for scammers to take advantage of unsuspecting consumers.
Online shopping scams are the second most common scam reported to the Federal Trade Commission. Consumers reported losing $358 million to these scams in 2022 alone.
Scams can be especially rampant during the winter holiday season as more people go online to make purchases. Scammers take advantage of shoppers who are eager to find bargains or are in a rush to buy gifts. So it’s important to be aware of the red flags of online shopping scams to avoid becoming a victim this holiday season—or at any time of the year.
What are online shopping scams?
Online shopping scams typically result in consumers paying for an item and never receiving it or receiving counterfeit goods, damaged goods or different goods from what they ordered, such as a screwdriver instead of a drill, according to the Better Business Bureau’s Online Shopping Fraud report.
In some cases, the financial damage continues even after shoppers are duped into purchasing nonexistent or shoddy items. Scammers steal the debit or credit card information that is provided to make purchases then use it to make fraudulent purchases and rack of charges in consumers’ names.
Common types of online shopping scams
Scammers use a variety of ploys to take advantage of consumers. Here are some of the most common types of online shopping scams, according to the Better Business Bureau, FDIC and FTC.
- Social media ads for discounted goods: The most common online shopping fraud report that BBB Scam Tracker receives involves ads on Facebook and Instagram. When consumers click on the ads thinking that they’re going to get a good deal, they end up with inferior products, counterfeit items or nothing at all. According to BBB, many of the ads are posted by groups operating out of China.
- Fake retail websites: Scammers create websites that look legitimate or are even replicas of actual retail sites in an attempt to steal credit and debit card information from consumers who shop on these sites.
- Online marketplace scams: Scammers take advantage of buyers on online marketplaces such as Craigslist and Facebook Marketplace by asking for payments upfront—often by wire transfer or a payment app such as Venmo or CashApp—then don’t deliver items that are purchased. Sellers can become victims of scammers who ask to pay through a payment app and send fake payment notifications. Scammers also will send fake checks for more than the asking price then request refunds for the difference. When the original checks bounce, sellers discover that not only did they not get paid for the items they sold, but also they paid the scammers.
- Sponsored links: Scammers use sponsored links on search engines such as Google to take advantage of consumers who are looking online for products or deals. The sponsored links that appear at the top of search results sometimes can lead to scam websites that aim to steal consumers’ credit card information.
- Free trial offers: Scammers post ads online and on social media sites offering free trials for a range of products and subscription services. However, to get the free products, consumers have to pay a small shipping fee or provide a credit card number. Often, the free trial can turn into recurring charges when scammers sign up consumers for other products or make it difficult for consumers to cancel their free trials.
- Fake celebrity-endorsed products: Scammers are using artificial intelligence technology to post photos and videos on social media sites of celebrities endorsing various phony products. Often these products are related to weight loss and health supplements.
- Email or text message offers: Scammers send emails and text messages with coupon codes or offers for deeply discounted items with the hopes that consumers will click on the links in the messages. Those links can either include malware that will infect your device or can lead to fake retail sites.
- Package delivery scams: Scammers send emails and text messages that appear to be from the U.S. Postal Service, UPS, FedEx or other delivery and claim that there’s a problem with the delivery of a package. The aim is to get consumers to provide personal information in order to receive their packages. These scams are particularly prevalent around the holidays.
Signs of online shopping scams
Scammers are always coming up with new tactics to take advantage of consumers. However, most online shopping scams have telltale signs. So, beware if you see any of these red flags.
- Deals that are too good to be true. If the retailer or seller is offering the item you want at a dramatically lower price than others are, it’s likely a scam.
- Sites that are questionable. Don’t trust retail sites that are missing a padlock and “https://” in the URL, customer service contact information, or refund and exchange policies. Misspelled words, incorrect grammar and poor website design also are red flags.
- Unsolicited emails or text messages from retailers. If you didn’t sign up to receive notifications from retailers about sales, coupons or special offers, be wary of any emails or text messages about deals.
- Sellers who demand payment by wire transfer or money order. These forms of payment make it nearly impossible to get your money back if there’s a problem with your purchase.
- Buyers who want to overpay or pay with a gift card when making purchases through Facebook Marketplace or other online marketplaces. Also be wary of buyers who want to pay with payment apps then claim that they’re owed a refund for some sort of overpayment or extra payment. This is a common Facebook Marketplace scam.
How to avoid online shopping scams
Don’t let your guard down when shopping online. Take these steps to ensure that you avoid scammers who want to steal your money or personal information.
- Stick to retail sites you know and trust. Shopping online with well-known retailers is one of the best ways to avoid scams. If you do see deals advertised online for retailers you’re not familiar with, check out the companies before making purchases. Search company names online along with the word “reviews,” “scam” or “complaint.” Also, visit BBB.org to see reviews of companies.
- Read refund and exchange policies on retailers’ sites to ensure that you can get your money back if you’re unhappy with a purchase. If the retailer doesn’t provide its refund or exchange policy on its site, shop elsewhere.
- Be careful when searching online. Avoid using broad search terms, such as “iPhone deals” or “cheapest TVs.” This is more likely to generate sponsored results for questionable sites. Before clicking on those results, pay attention to whether it’s identified as an ad or sponsored result.
- Don’t click on ads for discounted items. Instead, go directly to the company’s site. If you don’t find the advertised deals on the official site, the ad likely was fake.
- Check URLs. If you click on an ad or email or text message link that appears to come from a legitimate retailer, check the URL of the site to confirm that it is actually the retailer’s site. Look closely to ensure that letters aren’t missing, such as a .co instead of .com, or that additional letters or words aren't included.
- Don’t click on links in emails or text messages, even if they appear to come from trusted retailers or delivery services. Visit retailers’ sites directly to see if you can find the deal that you’ve been notified about. And if you’ve ordered items online, use the package tracking information that you were provided in your purchase confirmation email.
- Exercise caution when buying or selling on online marketplaces. When buying, be wary of prices that are too good to be true, of sellers asking for prepayment or of anyone who refuses to meet in person to conduct transactions. When selling, don’t trust people who are willing to overpay for items or ask you to ship items before they pay. Never accept payments through a mobile payment app such as Venmo or Zelle from someone you don’t know.
- Use a credit card for online purchases. Credit cards offer more protections than other forms of payment if you need to get your money back for fraudulent transactions and for purchases that merchants aren’t willing to refund.
- Monitor bank and credit card accounts for unauthorized charges. Even if you take the steps above to stay safe online, there’s still a chance that scammers could get your credit or debit card information. Signing up for a service such as Carefull can provide 24/7 monitoring of your bank and credit card accounts for unusual or fraudulent transactions, as well as credit and identity monitoring. You can try Carefull for free for 30 days.
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