Identifying and dodging fake online retailers

The convenience, variety, and competitive prices offered by e-commerce platforms have fueled unprecedented growth in the sector. In fact, according to a recent report by Statista, global e-commerce sales are projected to surpass 8 trillion dollars by 2027. 

However, as the online retail landscape continues to expand, so does the threat of fake retailers preying on unsuspecting consumers. These fraudulent entities not only jeopardize the financial well-being of individuals but also erode trust in the e-commerce ecosystem as a whole. 

This article provides a comprehensive guide to help you navigate the complex landscape of online retailers and ensure you have a safe and satisfying online shopping experience.

The rise of fake online retailers

The threat of fake online retailers is growing at an alarming rate. This issue is becoming more prevalent as online shopping continues to surge globally. Data shows that eCommerce companies are estimated to lose at least $48 billion to fraud each year.

North America accounts for the highest fraudulent transaction value, comprising over 42% of global e-commerce fraud. The increase in fraudulent activities underscores the need for robust fraud prevention measures. 

Consumers face significant financial and personal data risks from fake online retailers. The deceptive tactics used by these fraudulent sites can lead to substantial monetary losses and identity theft, which is a major concern for 71% of merchants surveyed.

One of the most common problems consumers encounter with e-commerce is having their package stuck in customs — and scammers are well aware of this. Criminals will often use the problem with customs to mask their fraudulent activities. While legitimate businesses will reply to complaints and, on occasion, offer refunds, fake retailers will use this time to sandbag, deflect, and further confuse you.

Fake websites and fraudulent tactics

In addition to fake retailers, scammers posing as customer support representatives for reputable companies such as Amazon, Best Buy, and others have become increasingly common. These scammers send emails with fake purchase confirmations or invoices, prompting recipients to contact a fraudulent call center for assistance. Often, these emails look convincingly real and can easily deceive unsuspecting consumers. Additionally, these scammers may create fraudulent retailer websites that appear in search results, mimicking legitimate sites. 

When individuals visit these sites or call support, they are directed to scammer call centers, usually located in India, where they may be asked to provide personal and financial information.

Fake online retailers have other deceptive tactics that they use to lure unsuspecting customers. These include:

• Selling counterfeit or inferior products. They present unauthorized replicas or cheap copies of genuine products and brands. This way, they can offer unrealistically low prices and achieve higher search rankings.
• Deceptive advertising. They use tactics such as brushing (generating fake transactions and reviews, along with sending unsolicited packages) and deceptive pricing (fabricating original prices) to boost their sales figures and rankings.
• Data harvesting. They collect sensitive personal and financial information from customers, which can be exploited for further fraudulent activities or sold on the dark web.
• Creating fake reviews. Fake reviews lure customers into believing a product is popular or better than it actually is by artificially boosting the ratings.

How to spot fake shopping websites and retailers

Shopping online offers convenience and a wide range of options, but it also comes with the risk of encountering fake websites and scammers. Here are ten essential tips to help you spot fake shopping websites and retailers:

1. Check the website’s URL

Check the website’s URL for irregularities like misspellings, extra words/numbers, or slight variations of well-known brands. Legitimate retailers have straightforward domain names related to their brands. 

Although many legitimate businesses use less common domain extensions such as .biz or .info, it’s worth asking yourself if the URL seems legitimate — for example, would Amazon be using a .biz domain? If you’re not sure, Google the business name and see what URL Google displays. 

Use online tools like WHOIS to check when the website’s domain was registered. Newly registered domains aren’t always a red flag, but you should proceed with caution, as scam sites rarely stick around for long.

2. Look for HTTPS and security certificates

Legitimate websites use HTTPS protocol and have SSL/TLS certificates to encrypt data transmission, indicated by a padlock icon and the https://” prefix. SSL certificates authenticate the website’s identity, preventing man-in-the-middle attacks. Extended Validation (EV) SSL provides the highest level of identity verification, displaying a green address bar. 

Reputable retailers prioritize SSL to protect sensitive information like credit cards and login credentials. Lack of HTTPS raises security concerns and can negatively impact search rankings. Checking for HTTPS and trusted SSL certificates is crucial for identifying legitimate, secure online retailers.

Likewise, it also depends on whether the sites take cybersecurity seriously and whether they respect security by design principles, which can sometimes make or break them when attackers try to exploit vulnerabilities and turn sites into scams. 

3. Examine website content and design

A legitimate website will have clear, accurate content without errors, consistent branding and design across pages, and a professional appearance. Poor grammar, spelling mistakes, and awkward phrasing can also indicate a fake site. 

Scrutinize all pages — scammers may put effort into key pages like checkout but neglect others. Inconsistent formatting, outdated information, and lack of polish are red flags indicating a potentially fraudulent operation.

4. Review the contact information

Review the contact information on the website to ensure legitimacy. Look for a physical address, phone number, and email contact. 

Verify that the email address uses the company’s domain rather than a generic service like Gmail. Test the email to see if it gets delivered. Check if the phone number is functional and not just a placeholder. 

A legitimate business will have clear, accessible contact details, often including a contact form and links to social media profiles. Lack of or hard-to-find contact information is a red flag indicating potential fraud.

5. Verify pricing and discounts

While sales and discounts are common, be wary of prices that seem unrealistically low or too good to be true, as they may indicate counterfeit or non-existent products. Check price comparison websites and browser extensions to verify if the advertised price is truly a good deal compared to other retailers. 

Use tools that provide price history to ensure the “discounted” price isn’t higher than the regular price from previous periods. Don’t solely rely on listed discounts; scrutinize the final price against competitors and historical data.

6. Check for a privacy policy and terms of service

Legitimate eCommerce sites should have clear, accessible Privacy Policy and Terms of Service pages. The Privacy Policy outlines how customer data is collected, used, shared, and protected. The Terms outline rules for using the site. Check for these pages in the website footer or during account signup/checkout. 

Reputable retailers prioritize transparency by prominently displaying and adhering to these policies, building customer trust. The lack of policies should raise suspicion about the site’s legitimacy and data handling practices. Carefully review the policies to ensure alignment with relevant laws and your privacy expectations.

7. Read customer reviews

Legitimate retailers typically have a substantial number of customer reviews, both positive and negative. Be skeptical of websites with no reviews or only glowing feedback.

Read customer reviews carefully to identify potential fakes. Check review dates — many posted around the same time could indicate fakes. Look for similar phrasing across reviews, suggesting coordinated efforts. Generic reviewer names or lack of other reviews are red flags. Beware of extremely positive or negative reviews without substantive details. 

Check if the reviewer has only reviewed products from the same brand. Look for disclosure of incentivized reviews. Cross-reference reviews across platforms for consistency. Use review analysis tools to detect suspicious patterns. Focus on verified purchase reviews when available. Consider the overall review volume and rating distribution.

Essential tips for safe online shopping

Shopping online offers convenience and a vast selection but it comes with risks. To ensure a safe shopping experience, be sure to take precautions. Here are essential tips for safe online shopping:

1. Use reputable websites with secure URLs (https://) to ensure data encryption.
2. Verify website security with SSL certificates by looking for the padlock icon in the address bar.
3. Check the domain age using Whois tools; older domains are generally more reliable.
4. Avoid deals that seem too good to be true, as they often indicate scams.
5. Use credit cards or PayPal for added buyer protection and easier dispute resolution.
6. Review customer feedback on third-party sites like Trustpilot, Yelp, or Google Reviews to gauge reliability.
7. Ensure contact information is legitimate and reachable, including a physical address and phone number.
8. Check for proper grammar and spelling on the site, as legitimate businesses typically have polished content.v
9. Look for clear privacy, return, and refund policies to understand your rights and the retailer’s practices.
10. Use anti-phishing browser extensions for added safety, which help identify and block fraudulent websites.

Be safe when shopping online

Navigating the online shopping landscape requires vigilance and caution. While the convenience of eCommerce has revolutionized the way we shop, it has also opened the door for unscrupulous individuals and entities to exploit unsuspecting consumers. 

Protecting yourself from fake retailers and fraudulent websites is essential for safeguarding your financial well-being and preserving the integrity and trust that underpin the digital marketplace.

Staying informed, exercising caution, and supporting reputable businesses allows us all to contribute to a safer and more reliable online shopping experience.