BBB warns of holiday shopping scams
Last updated 11/22/2022 at 6:40pm
Though Black Friday traditionally kicks off the holiday shopping season, many consumers have already been searching online and on social media for the perfect gifts. While shopping online is easy and convenient, Better Business Bureau (BBB) warns online shoppers searching for gifts and other merchandise to do their research, be mindful of social media scrolling and use credit cards to avoid scammers.
Online shopping scam reports to BBB Scam Tracker remain just under all-time highs reached in 2021 when BBB issued an in-depth study, Theft on a Massive Scale: Online Shopping Fraud and the Role of Social Media, last December. According to BBB’s latest study update, reported online retail fraud losses are expected to exceed $380 million in 2022. Nearly 36% of all online retail fraud reports to BBB Scam Tracker originate through a fake website. Scammers use social media and email to initiate about 40% of reported scams.
The constant evolution of online shopping scams and their perpetrators' tactics makes it difficult for consumers to keep up. Consumers tell BBB that scammers impersonate known businesses or pretend to be legitimate businesses that send out ads on social media and whose names can show up in search engines. To avoid fraud, online shoppers should consider either buying from a known source or researching the business before making a purchase.
Fraudsters use a variety of methods to collect money, including credit cards, money transfer services (Venmo, Zelle, PayPal) and gift cards. PayPal offers some protections for consumers, though reports to BBB show mixed success in obtaining refunds. These types of scams appear to have moved away from money order payments, which were popular some years ago. To avoid chargebacks, fraudsters will provide fake tracking numbers and other information. They hope consumers will not notice the grift until it is too late to dispute the charge. Still, BBB recommends consumers pay with a credit card when possible, as those companies have strong procedures in place for disputing fraudulent transactions.
Since the pandemic, shoppers remain susceptible to online retail fraud that entices shoppers with hard-to-find items, promises of low prices and easy delivery, according to reports by consumers to BBB. Some common warning signs include:
• Prices that are too good to be true.
• Websites that look legitimate but credibility falls apart with scrutiny.
• Credit card payment failure leads the seller to ask for payment over cash-sharing apps like Zelle and Venmo or with gift cards.
Scammers target three key moments in the shopping process, according to BBB Scam Tracker reports:
• Before the purchase: Consumers may encounter advertisements for scams on social media.
• While shopping: Shoppers may be enticed by artificially low prices or fake websites.
• After the purchase: Fraudsters send fake tracking information and request more money for safe delivery.
BBB recommends the following tips to “Shop Safe, Shop Smart” this holiday season:
• Research before you buy. Out of the 57 percent who did not research a website or business via an independent source before making a purchase online, 81 percent lost money. Use BBB.org and shopper reviews to do your homework before paying.
• If the deal looks too good to be true, it probably is. The top motivating factor for people who make a purchase, then lose money is price. Don’t shop on price alone. Professional photos don’t necessarily mean it’s a real offer either, especially for pets/pet supplies, clothing/accessories and vehicles.
• Beware of fake websites. Watch for bad grammar, misspellings, legitimate contact information and the age of the domain. Look at Scamadviser.com to learn how long the website has been in operation. A recently created website may be a red flag. Use a map app to verify the business's address. Look for the “https” in the URL and a small lock icon on the address bar. Never enter payment or personal information into a website with only “http” – it is NOT secure.
• Be careful purchasing sought-after products. Watch out for “hot toy” scams. Scammers offer the most popular products for the season at great prices, especially on social media. Remember that like legitimate retailers, scammers also have access to tools they need to learn about your buying behaviors, offering exactly what you want to see at enticingly low prices while you scroll through your social media.
• Review return and exchange policies. In PA, retailers must clearly post their return policy and follow it, but there is no law that says a retailer must accept returns, offer cash back, store credit or even take exchanges, except in instances that a product was misrepresented or defective. It is important to read return and exchange policies before making a purchase and when possible, request gift receipts to provide to the recipient in case they want to and are able to make a return.
• Use secure and traceable transactions and payment methods. According to BBB's research, those who paid with a credit card are less likely to lose money. Be cautious when paying by digital wallet apps, prepaid money cards, gift cards or other non-traditional payment methods.
• Be aware of shipping time frames and delivery scams. Federal law requires that orders made online be shipped by the date promised or within 30 days if no delivery time was stated. Remember that shipment tracking information can be faked. Obtain tracking information and go to the 'shipper's website and type in the code to see if it is real. Arrange for shipments to be delivered to a secure location to help prevent delivery fraud. The US Postal Service also offers specific deadlines to keep in mind if you want a shipment to arrive by a specific date.
• Start With Trust. BBB Accredited Businesses pledge to uphold the BBB Standards for Trust and to deal fairly with consumers. If a business displays a BBB seal, verify it by going to BBB.org. If you are unhappy with a purchase, file a complaint at BBB.org/complaints. Report scams to BBB.org/ScamTracker to help other consumers avoid being scammed.
Who to contact if you are the victim of an online purchase scam:
• Better Business Bureau – BBB Scam Tracker to report a scam online.
• Federal Trade Commission (FTC) – reportfraud.ftc.gov to file a complaint online or call 877-FTC-Help.
• Your credit card issuer – Report the incident if you shared your credit card number, even if the transaction was not completed. Monitor your statements and if you suspect fraud, ask for a chargeback. It isn't guaranteed, but many credit card companies will grant one.
Visit BBB.org/Holiday for more helpful tips to “shop safe, shop smart”.