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How To Avoid Online Shopping Scams During The Holiday Season

Dec 21, 2020
Posted by: Stearns Bank
Avoiding Shopping Scams

Publisher’s Note:

This article is being shared as part of a non-promotional education initiative. The Association of Certified Fraud Examiners (ACFE) does not endorse any organizations or products affiliated with the platform this article is hosted on. The ACFE has given Stearns Bank permission to republish this article. Stearns Bank - Member FDIC. 


By Julia Johnson

ACFE Research Specialist

During Cyber Monday this year, consumers in the U.S. spent $12 million each minute on online purchases. With total online sales revenue reaching $9.4 billion that day, there is no doubt cybercriminals were hard at work too. As online shopping ramps up for the holiday season, so does the risk of online shopping scams targeting individuals who are looking to buy their loved ones the perfect gifts without breaking the bank.

A common way that scammers target consumers is through bogus websites that replicate legitimate ones for popular merchants such as Apple, Amazon and Walmart. Scammers can easily set up fake retailer websites that look genuine by copying their designs, logos, layouts and an almost identical domain name. Many times, individuals will quickly type the name of a store into an internet search engine, click on the first link that appears, and are not aware that they are shopping on a fraudulent website.

Another channel for online shopping scams comes in the form of online stores that are advertised on social media platforms. Criminals set up fake online stores that are only open for a short period of time and then disappear after making a certain number of sales. Social media and domain impersonation scams aim to victimize as many consumers as possible by offering exclusive holiday deals or telling victims they must share the scam through their social media outlets to unlock additional deals.

Counterfeit Goods

A common way that consumers fall victim to online shopping scams is by unknowingly purchasing counterfeit or low-quality goods from a fake website or fraudulent social media store. Scammers sell what appear to be brand-name goods on a retailer’s impersonated website at heavily discounted prices — tricking consumers into thinking they have just stumbled upon the deal of the century.

Once consumers receive the products, they realize that the goods are poor-quality, knock-off items. When they attempt to return the items, they ordered at a physical location of the retailer, they are told that the products are not sold in the store. Fraudulent retailers on social media platforms might have strict refund policies or choose not to respond to the customer when they inquire about the quality of the goods they received.

Free Trial Offers

Another way that fraudsters perpetrate online shopping scams is by creating misleading advertisements that promise free trials of the newest skin care or dietary supplement products, among others. The only requirement is that the customer pays for shipping fees. Once an individual signs up, they realize that they have unknowingly agreed to monthly shipments at the product’s full cost.

Many of these fraudulent companies do not have readily available terms and conditions that outline the reality of the “free trial” agreement. Cancellation policies for companies like this might also be strict, resulting in large costs to stop the delivery and billing for these products.

Products Not Delivered

As the time between Thanksgiving and Christmas seems to fly by, many consumers are worried whether the products they ordered will arrive in time for the holidays.

Some fraudulent companies will falsely assure customers that the products they ordered are both in stock and will arrive on time, only for the customer to be disappointed when the product shows up well after the promised date (if it ever arrives at all). Customers should be especially wary of products manufactured overseas that promise a quick delivery date, as well as vendors that require check or wire payments for transactions.

How To Protect Against Holiday Shopping Scams

As the holiday season moves full speed ahead, it is important for consumers to protect themselves from fraudsters who attempt to take the joy out of the season of giving.

The easiest and most proactive approach an individual can take to prevent becoming a victim of an online shopping scam is to do thorough research before purchasing an item from a new online vendor, or something they see advertised on social media. Customers should read reviews and complaints against the vendors they are purchasing from, especially if they have never heard of the company before.

If there is limited information about the company, or if they list little to no contact information on their website, this is a red flag. Consumers can also check the Better Business Bureau’s Scam Tracker to see if other individuals have had any negative experiences with the company in question.

Another way for consumers to guard against online shopping scams during the holidays is to use credit cards when purchasing from online vendors. This method of payment is easily trackable, and most credit card companies will refund the money if the goods do not arrive. Check or wire payment methods to a fraudulent company usually result in lost funds, with the only recourse of action being trying to get in touch with the company or writing a complaint for other potential consumers to see.

Fraudsters take advantage of customers’ desires to give to their family and those in need during the holiday season. Consumers should keep this in mind and use their best judgment when making online purchases during the busiest shopping period of the year. If a deal sounds too good to be true, it usually is.