How To Avoid Online Shopping Scams & Ripoffs

If you spend any time at all on Instagram or Facebook, you’ll have noticed slick video product ads for products. If you’ve clicked to buy them, you might have noticed that the websites they take you to don’t look super professional. That’s because there’s a new social media shopping scam in town.

The scam:

Unethical Chinese companies are setting up websites listing loads of products and advertising them on social media. Except when you buy the product, they send you a box of garbage. Literally.

They make money because most people don’t remember that they didn’t get the product, or they will be too busy or lazy to bother with doing a return or filing a credit card dispute.

I learned this the hard way when I sent a link I got from an Instagram ad to a bunch of friends and we all ordered self-scooping cat litter boxes that never arrived (instead, we all ended up with boxes of trash from China.) Turns out the video and images of the product were stolen from Kickstarter.

The enablers:

Why doesn’t Instagram and Facebook do anything about this? The same reason they don’t police political ads. For one, they’re making a lot of money on the ads. For two, it would cost a lot of money to staff a department dedicated to figuring out which ads are legit versus fake, and the Chinese scammers can create new websites and ads as fast as social would remove them.

PayPal is a bad-guy in all this too. In what I can only assume is a way to help scammers so they get to keep their commission, PayPal requires you to go to the post office and ship the garbage back to China on your own dime to get a refund.

Here’s how you can avoid getting scammed:

Search for the product on Amazon and/or reverse image search using right-click –> ‘search Google for image’. If you can find it, then order it on Amazon (where it’s usually cheaper anyway). For products that you can’t find on an online store like Amazon (one you know for sure is legit), then realize it’s a scam and don’t buy it. Or do, and just know that you’re most likely just going to donate money to a scammer.

How to get your money back if you got scammed:

Firstly, when making a purchase online always pay via credit card, but only if you can verify that the checkout page is secure and a legit payment processor (if you can’t, that’s a bad sign!) or use credit card with PayPal as the intermediary.

If you don’t get what you ordered, then file a dispute with PayPal, who will tell you to return whatever you were sent at your own expense. This is when you can ignore PayPal and call to your credit card and tell them that you want to initiate a dispute. They’ll ask if you tried to resolve it first with the merchant, and you can tell them that PayPal will only refund you if you spend more money and time to return the box of garbage the seller mailed you. Since you didn’t receive what you paid for, your credit card company should refund you without asking you to return anything. NB: PayPal’s dispute process takes several weeks, then the credit card dispute will take several more weeks to go through this whole process.

More online shopping scams to be aware of:

This video will show you a few more Instagram and Facebook ad scams to watch out for:

A while back, I went to a Gilt event, where Zac Posen had designed a car (apparently, silver is the new cool color for cars). I was standing near him and the pro photographer asked if he could take a photo of us together. I said “No way”, of course — JK! Anyhow, Zac and I chatted for a few minutes (he seemed very down to earth and approachable) before the orchestrators at Gilt decided to open the proverbial barn doors and let everyone stampede into the sale area.

Now, you’d expect a Gilt sale to be super amazing, right? I’d imagined racks of designer clothing, in perfect shape, at rock-bottom prices. But no, actually. Most of the items looked like they’d been stuffed in someone’s closet for a year, and they were clearly returns or items that didn’t sell. There was pretty much one of each item, sooooo hope it fits! Beyond that, the items weren’t any cheaper (as far as I could tell, anyway) than their mildly discounted web sales.

The way most discount or flash sale websites work is this: they take an item, change the name so you can’t Google it, and sell it for around what you’d get it for elsewhere (if not more). They flat-out lie about the “original/retail price” then they tack on the extra bonuses of expensive and slow shipping and a final-sale no-return policy. Nice.

One Kings Lane

One Kings Lane hides the fact that they’re selling products for more than retail. They artificially inflate the “retail” price (like, way high) and charge more than retail, all the while pretending it’s on some sort of hugely discounted sale. Oh, and they deliberately rename all the products so it’s hard to find them (and realize that they’re cheaper) on Google.

Like the white lamp above? I first saw it for $169 plus expensive and slow shipping and tax on OneKingsLane, and loved it, but I ended up buying it for $79 all-in at Walmart (it was also $79 at Overstock.)

Here’s another example: Their “Houston End Table” was on “sale” at One Kings Lane for $329 +$32 shipping ($361.) Yet I managed to find the exact same table (sold on about ten different websites, at the time) and, at the time of the One Kings Lane sale, the normal retail price was $287 with free shipping, which is $74 cheaper than the supposedly discounted price at One Kings Lane.

Oh yeah, and unlike these daily deal sites (aside from Joss & Main, which actually has some good deals and allows returns), the majority of regular online stores give you the option to return the product if you don’t like it for some reason.

Wondering if the product you’re drooling over is available on other sites? The fastest way to find out is to right-click the image and select “Search Google for this image”. Happy shopping!

On the web: $89.95 and free 2nd day delivery — on One Kings Lane: $99 + $9.95 for shipping (=$20 more), and it’ll arrive in (get this) literally a MONTH!

Gilt

I think the image below pretty much sums it up. Oh, and Amazon has free and fast shipping, while Gilt’s shipping is $$$ and super slow, which brings the price to more than a 50% markup. Same kind of ripoff as One Kings Lane.

Update:

I got an email from GILT’s PR / media relations, who wanted us to change this article, since I outed them for their dishonest practices. This was the rationalization:

“The ‘retail/original’ price listed on GILT’s sales of all products on our site reflects the price reported by the manufacturer and may not always represent the prevailing price for retailers or department stores on every day or in every community. For international sales, the Full Retail Price is based on what such items would be sold at in the US market or in the worldwide online market, plus taxes, shipping and additional international surcharges, if applicable.”

So it sounds like they basically figure out how they can make it sound the highest, between what the manufacturer says, the highest price it’s selling for anywhere, and what other charges they can add to the “retail” price like tax, duty, and shipping that some customers may have had to pay depending on where they would have bought it and then shipped it. Not exact transparent…

I personally think that strategy is very misleading at best, and I replied and said that the only price that people care about is the item’s current price at other stores — not the absolute maximum price it has historically sold for anywhere, including duty and tax, etc!

As a side note, I tried to find retailers selling Gilt products for as high as the price they listed as the non-sale price, and I couldn’t. Soooo…

Share below: What experiences with online shopping have you had?

Read more: My best online shopping tips & hacks to get great deals