Online shopping can help you save money and access a wide variety of products, but there are downsides, too. Hackers and other online criminals are constantly trying to scam shoppers by offering fake deals and discounts. In fact, according to a recent Better Business Bureau Scam Tracker report, online purchase scams are the second-riskiest type of fraud after employment scams.
Although shopping online doesn’t always result in identity theft, there are other risks, too. You might lose money, get a bogus product or not get anything at all — and you might even be convinced to spend more than you planned to.
By knowing the most common scams and traps that online shoppers encounter, you can set your finances up for a better future.
Last updated: Nov. 26, 2019
Requests To Pay With Wire Transfers
Sound the alarm if a retailer asks you for a wire transfer, a money order or a gift card as payment for your order. In this case, it’s likely that your money will fall directly into the pocket of a scammer and you won’t receive anything for the money you paid. If you want to protect yourself, always pay with a credit card or other secure forms of payment, according to the Better Business Bureau.
Links Sent via Text Messages
If you receive a random text message telling you to click on a link that advertises some amazing deal or prompts you to cancel a particular service, this is most likely a smishing scam. A smishing scam is a strategic way for criminals to get you to give out your personal information by taking action on a fraudulent link in a text message.
“Smishing professionals use text messages that lure you into clicking on links or providing personal information in response to a text message from what appears to be a trusted source,” Steven J.J. Weisman, author of the book “Identity Theft Alert,” told Experian. “They’ll use other strategies, too.”
Fake Websites or Domains
Although many online retailers are legitimate, many others are not. If you shop on a fake website, you might receive a knockoff product, something completely different from what was advertised or nothing at all.
One way to identify if you’re browsing a fake website is to look at the domain name. As a rule of thumb, most legitimate URLs will not have extraneous characters or misspellings. Retailer websites are simple and typically match their trademark name, according to CNBC. For example, the domain name for fashion brand Michael Kors is MichaelKors.com. Likewise, the domain name for high-end designer Gucci is Gucci.com.
You can also check if the website has a universal seal of approval, such as the Norton Secured Seal. Such a seal usually indicates that the website is trustworthy, according to Consumer Reports. You can also check to see when the domain was created using Whois.
Say you come across an ad for 95% off your favorite item. You click on the ad and are taken to a website where you can shop for deals. You subsequently put in your personal information to redeem the ad and get your product. At that point, the scammer has got your information and will leave you high and dry.
If you’re skeptical of a deal, see what the item is selling for at other retailers. Conducting a simple price comparison can help you spot if the deal is truly legitimate or just an attempt to lure in you into throwing money at a product or service that doesn’t exist.
Avoid Shopping When You're Using Public Wi-Fi
Be careful when using a public Wi-Fi connection, and avoid it completely if you intend to buy products and enter payment information. The chance for identity theft increases when using public Wi-Fi. Sometimes online criminals will set up a similar Wi-Fi network to the one you’re expecting to use, hoping you’ll connect to it, according to AARP. If you do need to use public Wi-Fi, make sure you’re also using a virtual private network.
Shopping phishing emails can happen at any time of the year, but they tend to be popular during the holidays. What appears to be an email from a reputable retailer lists a coveted discount or informs you that something went wrong with your order. The email usually comes with a link for you to click on so that you can get the advertised discount or fix the problem with your order. Clicking the link, however, downloads malware on your computer.
To confirm the legitimacy of the sender’s identity, double-check the email address. In addition, be on the lookout for poor spelling and grammar and links that require you to supply your personal information, the e-commerce site Etsy recommends. That’s a way to avoid falling victim to these money scams.
Be Smart With Your Money: How To Create a Budget You Can Live With
Fake Shipping Alerts
If you receive an email from a major shipping service such as FedEx claiming that your package is delayed or there is a problem with your order, this might be a phishing scam. Typically, this kind of email will ask you to click on a link for more details of the purported problem. But clicking the link can result in downloading malware that hackers use to take information from your computer.
Rather than click on the link, you should visit the shipper’s website directly and use your tracking or order confirmation number to verify the status of your package, according to CNBC.
Bypassing Sketchy Contact Information
Reputable retailers will typically have a summary of who they are in an “About Us” section where you can check out the company’s background, values and mission. Legitimate companies also typically have a “Contact Us” section where shoppers can send service complaints and questions.
An “About Us” or “Contact Us” section can help build a retailer’s transparency and trustworthiness. If you have doubts about a website’s authenticity or you’re concerned about a scam attempt, make sure to confirm the retailer has an available line of communication with its customers.
Not Researching Deals
By doing your own research and comparing websites, you’ll get a sense of the average cost of a product available in the marketplace. Price comparison gives you the best chance to figure out if a deal is legitimate or just a bunch of fluff. By not researching, you could get stuck overpaying for an item you want or potentially giving in to a fraudulent deal.
Not Monitoring Your Accounts
Although you might not always want to pay with your credit card, doing so can help you track fraudulent activity quickly and avoid other online shopping mistakes. It’s wise to regularly check your account balances and credit card account activity so that you can detect any unusual expenditures and unauthorized purchases. If you do, report it immediately.
Fake Coupon Sites
Beware of clicking on coupons from social media. If the coupon comes from the retailer’s official social media page, then you should be in the clear. But other times, fake coupons surface on social media pages that claim to be affiliated with retailers.
For example, say you stumble onto a deal at Ross that isn’t promoted on any of Ross’ official media platforms. Instead of assuming that the deal is an inside scoop, contact your local Ross or try to track down the deal on Ross’ official website. Otherwise, you’re vulnerable to malware attacks.
Purchasing Final Sale Items Too Early
When you’re browsing the clearance section online, pay extra attention to final sale items. Final sale doesn’t always mean final prices, according to Consumerist. In fact, retailers will sometimes mark down the prices of their final sale items.
So what’s the point of final sale items? To ward off return-happy customers. According to e-commerce analytics site Invesp, 30% of products ordered online are returned, compared with 8% of items purchased in-store.
Subscribing To Too Many Alerts
Although you don’t want to miss out on a good deal, subscribing to a lot of email lists can mean an overflowing inbox. Sure, promotions have a short shelf life, but there most likely is another one down the pipeline.
Instead of getting a case of FOMO about promotions, it’s best to sign up for promotions when you’re in the hunt for something. This way you can give your inbox a break and not be tempted by unnecessary sale items.
Relying On Reviews
Positively reviewed products and services carry a lot of influence with new customers, and retailers know this. It’s a way for customers to get insight on a product when they can’t physically touch or see it. In fact, a 2018 survey from ReviewTracker found that 63.6% of people said they were likely to check reviews on Google before visiting a business. As a result, some online retailers pay for positive reviews.
To avoid getting duped by fake reviews, beware of reviews that lack concrete details about the product or service. Also, pay attention to the dates of the reviews. If a high volume of positive reviews were posted at the same time, that might be an indication that the reviews were paid for.
Buying More To Get Free Shipping
Online shopping is fun until you remember you need to pay for shipping, too. Retailers often entice you by offering free shipping if you spend over a certain amount of money. It sounds like a good deal, but this can result in you spending even more money as you add another item to meet the shipping minimum. That extra item usually serves as a substitute for the shipping fee you didn’t want to pay in the first place. Stick with retailers that offer free shipping all year.
Control Your Finances: 14 Completely Free, Easy-To-Use Budget Templates
Before you download a Black Friday app or other savings apps to find major discounts and deals on your holiday gifts, make sure it’s legitimate. A 2017 RiskIQ study found that one in 25 Black Friday apps is a scam, designed to steal personal information or download malware onto the user’s phone or laptop.
To avoid this scam, only download official store apps or reliable apps such as FatWallet and DealNews, Consumer Reports stated.
'Designer' Products at Deep Discounts
Even if you’re purchasing a product from a reputable site like Amazon, Walmart or eBay, you might still end up with a counterfeit good sold by one of their third-party sellers. A 2018 study conducted by the U.S. Government Accountability Office found that 20 of the 47 products the organization purchased from third-party sellers on popular consumer websites were counterfeit.
A telltale sign of a counterfeit item is a price that seems too good to be true — in this case, chances are that it is.
Hidden Shipping Charges
We’ve all had that moment when we go to click “check out” and notice that the total in our shopping cart is much higher than we thought it would be. This could be the result of hidden shipping expenses, such as separate shipping fees for individual items. Or maybe the site advertises “free shipping,” but only for shoppers who pay an annual membership or other fees.
Before filling your cart at any shopping site, make sure you know how much you’ll be charged for shipping so you can determine if the ease of ordering online is really worth it. You can sometimes avoid fees by choosing the “pick up in-store” option, or by finding free shipping promo codes on sites like RetailMeNot.
Online shopping is personal, easy and convenient, which makes it a popular way to shop. It’s also easy to get taken in by deals that don’t exist or spend more than you meant or needed to.
To ensure your next online shopping experience is a secure one, follow these tips.
Verify a Website or App's Authenticity
The easiest way to spot a dubious website or app is a misspelling in the name or URL — if something looks off, don’t click or download.
Secure sites typically start with “https://” rather than “http://,” so look out for that distinction before trusting a website. Another way to verify a site’s security is by running it through Norton’s Safe Web search.
When it comes to apps, stick to brands and developers that you have heard of and trust. Additionally, you can check to see if a business has been accredited or received complaints by searching BBB.org.
Don't Be Too Reliant on Reviews
Reviews are easy to fake, so don’t trust everything you read. Some signs of fake reviews include overuse of personal pronouns, a lack of concrete details, generic names, several reviews posted at once and poor grammar, according to MarketWatch.
Of course, not all reviews are fake, and reviews can be a useful tool when making a purchase decision. However, don’t let the reviews be your be-all and end-all when it comes to making a purchase.
One of the best ways to avoid a scam is to shop around. If you see a price for an item that is significantly lower — or higher — than its price on other sites, that’s a good indicator that the low-priced product is a fake, or that the high-priced item is a ripoff.
Shopping around is also a good way to find the item that you want on a reliable site, rather than simply buying the first hit you get for an item on a Google search. Google Shopping is an easy way to compare prices across the web. It also shows you shipping costs, so you can compare the full price of the item rather than just the advertised price.
Pay With a Credit Card
Always opt for paying with a credit card rather than a person-to-person payment app, wire transfer or PayPal. Credit card transactions can be easily traced, and it also protects you against any unauthorized charges or charges for items you didn’t receive thanks to the Fair Credit Billing Act. Most credit card companies won’t charge you for any disputed charges.
Don't Provide Any Personal Information to an Online Merchant
You should never provide bank account information, your Social Security number or your date of birth to an online merchant. A website that asks for this information is likely a scam.
Remember That if It Looks Too Good To Be True, It Probably Is
Heavily discounted designer products, sites offering 90% off a hot item, retailer coupons for incredible deals, and sites and products with only glowing reviews all have one thing in common — they’re probably fake. If something seems too good to be true, trust your gut and walk away.
More From GOBankingRates
- What Is a Roth 401(k)? See If This Plan Is Right for You
- How To Avoid Wells Fargo’s Monthly Maintenance Fees
- Best Store Credit Cards
- 16 Effective Ways To Trick Yourself Into Saving Money
Gabrielle Olya contributed to the reporting for this article.
About the Author