Online shopping scams: How to spot them and protect yourself

What is an online shopping scam?

An online shopping scam is a fraudulent scheme targeting consumers who shop online. Scammers pose as legitimate sellers, creating fake online stores and using deceptive advertising to trick consumers into paying for misrepresented or fake products. Victims either never receive their purchases or receive low-quality, counterfeit, or completely different items than advertised.

How does an online shopping scam work?

These scams typically follow a common pattern but can be hard to detect, especially when they’re cleverly disguised. Scammers aim to lead you step-by-step toward the final trap, building your trust along the way to make the scheme more convincing.

This is how these schemes usually unfold:

• Scammers create convincing fake websites or stores. These websites or storefronts resemble legitimate retailers. They even replicate trust badges or security seals. Often, scammy websites are advertised in search engine ads and social media campaigns. Different types of phishing are also used to lure shoppers into giving away personal or financial information.
• Scammers advertise too-good-to-be-true deals. The offers on these bogus retailers often showcase unreasonably discounted or time-limited goods. This way, they push you to act out of excitement or a sense of urgency.
• They present a credible front and write/buy fake reviews. Scammers encourage shoppers by presenting detailed product descriptions and phony customer reviews. This step builds credibility and makes them appear more trustworthy. 
• The checkout uses unusual or unsecured payment methods. During the checkout process, scammers offer unconventional payment options like direct money transfers or cryptocurrency. 

• Scammers provide false or no post-transaction information. Once you make a purchase, you might get a fake tracking number or nothing at all. If you try to contact the seller, they ignore your messages. Even when you do get a response, scammers may disappear entirely without sending anything. In other cases, you could receive low-quality or completely unrelated products.

• The fake store shuts down. Shortly after scamming victims, criminals take down the store. They may reappear later under a different name or web address.

What are the most common online shopping scams?

Online shopping scams don’t happen in only one form — scammers can play out their game in various ways. Take a look at some of the most common types below:

Counterfeit online stores

Scammers create websites that mimic legitimate, popular retailers or pose as small businesses to steal personal data and money. Fraudsters often register domain names with slight misspellings of well-known brands. Additionally, some sites use URL cloaking techniques to display a genuine web address while redirecting users to fraudulent destinations.

Social media ads

Scammers run deceptive advertisements on platforms like Facebook, Instagram, and TikTok, targeting users with fake deals and products. These online scams appear convincing and often pretend to be legitimate local stores or popular brands.

Online marketplace scams

Fraudsters exploit popular marketplaces like eBay, Facebook Marketplace, and Craigslist by creating fake seller profiles using stolen photos and fabricated reviews. Red flags include sellers who refuse to answer questions about the product and request communication or payment methods outside the platform’s secure system.

Black Friday scams

Black Friday often features some of the best deals of the year, and just like every other sale season, it attracts scammers. Black Friday scams might also use countdown timers or messages that push shoppers to act quickly.

Fake celebrity-endorsed products 

Scammers leverage celebrity influence by creating fraudulent endorsements that make products appear backed by well-known figures. These scams rely on consumers’ trust in celebrity recommendations to bypass normal skepticism.

The most common signs of online shopping scams

Online shopping scams can be hard to spot, but small details often give them away. The list below will help you catch even the most subtle signs of an online shopping scam:

• Unbelievably low prices. If you see products advertised way below their market value, it’s a red flag. Scammers use very low prices to draw shoppers’ attention.
• Urgency or pressure tactics. You may see countdowns and receive messages about limited stock or short-term deals. Scammers often use these tactics.
• No valid contact information. While legitimate businesses offer clear contact details and transparent return and refund policies, scammy sites have vague or missing information.
• Unusual payment methods. Requests for payment via wire transfer, cryptocurrency, or direct bank transfer are often a sign of fraud.
• Lack of genuine customer reviews. Authentic websites usually feature a range of feedback from real buyers. Meanwhile, overly generic comments and repetitive 5-star ratings might indicate fake or purchased reviews.

Examples of online shopping scams

Online shopping scams can take many forms, often tricking consumers by imitating legitimate retailers or creating fake websites. These schemes have become increasingly sophisticated and widespread, leading to significant financial losses and stolen personal information. For instance, a criminal network in China once created thousands of fraudulent retail sites, targeting shoppers across Europe and the U.S. Their operation reportedly generated up to 55 million dollars in fraudulent transactions. More recently, some customers trying to shop with Costco ended up on scam websites mimicking the retailer’s official site, paying for orders they never received — with no record of those purchases on Costco’s system.

A more recent example of an online shopping scam involves the international retailer Costco. Multiple customers reported paying for orders but never receiving them. When Costco representatives investigated these complaints, they found no matching purchases in their system. The buyers had unknowingly placed orders on scam websites that mimicked Costco’s official site.

What to do if you are already a victim of an online shopping scam

If you happened to fall victim to an online shopping scam, follow these steps immediately:

• Call your bank or card provider. Contact support and tell the service representative  about the fraudulent transaction. Ask them to reverse the payment. Also, ask them to block further transactions if needed. This step could stop scammers from spending your money or committing loan fraud. 
• Secure your banking accounts. Change your passwords. If you used the same password elsewhere, change it, too.
• Monitor your finances. Regularly check your bank and credit card statements for unusual charges or activity. Early detection can reduce the impact of credit card fraud, so don’t forget to learn how to freeze your credit as well if needed.
• Warn others. Share your experience with those around you and online so that more people will be aware of the scam and be cautious.

How to report online shopping scams

If you’ve fallen victim to an online shopping scam or suspect fraudsters have stolen your personal information, it’s important to act quickly and report fraudulent activity.

Letting authorities know about the scam helps them track criminals and prevent further victims. In some cases, you might even recover lost funds. Contact your local law enforcement or cybercrime unit, and contact your national consumer protection agency. In the U.S., you can file a report with the Federal Trade Commission (FTC) or submit a complaint to the FBI’s Internet Crime Complaint Center (IC3).

Additionally, you can learn how to report identity theft if the scammers obtained sensitive information like your Social Security number, bank accounts, or other financial data.

How to avoid online shopping scams

Wondering how to stay safe while shopping online? These tips can help you avoid scams:

• Stick to reputable retailers. Whenever possible, shop from well-known sites or verified online sellers. Exercise extra caution if you want to shop from unknown, new, or online sellers.
• Check the website carefully. Look for proper spelling in the URL and a secure https connection.
• Inspect payment methods. Avoid paying with bank transfers, gift cards, or cryptocurrency. Credit cards or secure payment services are safer and often offer fraud protection.
• Read reviews and research the seller. Don’t solely rely on the testimonials you see on the website or the platform. Look for reviews on independent review platforms or forum sites.
• Verify return and refund policies. Legitimate stores clearly outline returns, refunds, and customer service procedures. If this information is missing or vague, don’t make  purchases from the website.
• Watch what you share. Never share unnecessary sensitive data like Social Security number or ID scans. Also, learn how to protect your personal information.
• Keep your devices secure. Use updated browsers and antivirus software, and avoid shopping on public Wi-Fi without a VPN to prevent identity breaches.

For more ways to stay safe online, explore NordProtect’s features, such as security alerts, credit monitoring, and dark web monitoring. Spot threats early with NordProtect.