In the digital age, the convenience of online shopping has become a staple for many Australians, including our savvy seniors who appreciate the ease of clicking to purchase from the comfort of their homes. However, with this convenience comes a new breed of online deception that targets unsuspecting shoppers and prey on their emotions and trust.
A concerning trend has emerged, where online retailers promote closing-down sales for physical shops that, in reality, do not exist. These ‘ghost stores’ are crafty online retailers that create the illusion of being long-standing, reputable physical shops facing closure. They tug at the heartstrings with emotional advertisements, claiming years of service and a heartfelt farewell due to changing times or personal circumstances. Yet, upon closer inspection, these stores are nothing more than a façade.
The modus operandi of these ‘ghost stores’ is to craft a compelling backstory, often involving family-run businesses that have supposedly been a part of a community for years. One such example is the fictitious Maison Canberra boutique, which recently advertised a ‘big sale’ to mark its closure.
The ads, designed to appear on social media feeds, tell the story of owners who have become grandmothers and wish to spend more time with their families. However, a domain search reveals that Maison Canberra’s website was only registered in March, and its Facebook pages were created shortly thereafter. There is no trace of a physical store, no ABN, or registered company name to be found.
This is a classic case of a ‘ghost store’, an online-only entity with no local shopfront, often shipping products from overseas warehouses. The Australian Competition and Consumer Commission (ACCC) has noted an uptick in complaints about such retailers and is currently investigating the issue.
Other e-commerce sites like Cooper&Ellis, Molly-Smith, Julie Melbourne, and Syd Collective have been identified as potential ‘ghost stores’, running similar ‘closing down’ ads despite only being registered recently. These sites are likely in breach of Australian consumer law if they are making false claims about their operations and sales.
Erin Turner, chief executive of the Consumer Policy Research Centre, emphasises that companies cannot lie to their customers, including fabricating stories about their location, and sales, or using images of fake owners to seem legitimate. She urges search engines and social media platforms to take more responsibility in verifying the legitimacy of businesses advertising on their sites.
The deception often extends to the products themselves. Maison Canberra, for instance, advertised an ‘Andrine™ Casual Sweatshirt and Dress Set’ for $79.95, claiming it was discounted from $269.95. Yet, a reverse image search shows an identical item available on the Chinese marketplace AliExpress for just $14.99.
Prof Jeannie Paterson, co-director of the University of Melbourne’s Centre for AI and Digital Ethics, points out that while selling similar clothing for cheaper elsewhere isn’t necessarily misleading, claiming a discount from a non-existent storefront is. This practice borders on scamming, as there is no real discount being offered.
The challenge lies in enforcing Australian consumer law against these ‘ghost stores’, especially if they are operated from overseas. Social media platforms, which host these misleading ads, should also be held accountable for allowing such deceptive practices.
For example, the online retailer Molly-Smith claims to be a family-run business based in Sydney, with a history dating back to 2012. However, its domain name was only registered last year, and the same sentimental story appears on a UK-based label’s Facebook page, suggesting a copy-paste approach to lure customers.
Similarly, Cooper&Ellis purports to be a Byron Bay-based clothing label offering an ‘exclusive 80% discount’ due to retirement. Yet, there is no evidence of their existence beyond a recently registered website and a Facebook page.
The Byron Bay Chamber of Commerce president, Matt Williamson, expresses frustration over such sites exploiting the town’s popularity and undermining legitimate local businesses. He warns that the clothing often does not match the quality advertised online.
Meta, the parent company of Facebook and Instagram, has stated that it is investigating the pages in question. Many of the images used in these ‘closing down sale’ ads appear to be AI-generated or manipulated, further obscuring the reality behind these ‘ghost stores’.
In today’s fast-paced digital marketplace, offers can appear in an instant, and sometimes it’s easy to get swept up in an emotional backstory or dramatic discount. As shoppers, it’s always a good idea to pause and check the details before making a purchase. Being mindful of how online businesses represent themselves can make a big difference.
Have you ever come across an ad that claimed a store was closing down? What was your initial reaction? How do you usually decide whether an online deal is worth trusting or investigating further? Share your stories and experiences in the comments below.
Also read: Seniors remain prime targets of online scams—protect yourself!
There was an ad for Blue Illusion saying it was closing down. After checking with a local store they said they certainly weren’t closing down. I thought the prices were too good to be true.
In this world of AI and ‘sophisticated’ scammers, it’s up to us all to do our due diligence. What a sad world we live in :o<
Just as bad are big name stores who now use associate stores. Bunnings, Woolworths are examples. You may buy your groceries on line but you can buy everything else under the sun from their associates – all overseas companies. I got caught ordering slippers on line from a company who had a retail shop in my hometown. You couldn’t buy slippers in the shop but they sold them on their site. I paid $60 for them but despite ordering the right size they were too tight. I tried to return them to the shop – no I had to go through returns process on line only to be refused an exchange to a bigger size because the item was sold by their “overseas associate” I got the run around from those people too – no refund and not even an offer of a bigger size. I was furious and still have those slippers. The company was a well known ladies fashion store AUTOGRAPH who have many other trading names but they closed their autograph store in my town a month ago. Companies who sell item by size on line would normally be expected to allow size changes – so do your due diligence. From your well known brand? Really? Or an anonymous overseas associate? Buying on line too perilous for young – not just old – people now. Money going overseas instead of with Australian businesses too!
I always research. A lot of these scam companies will use the same address, hoping you wont look it up. Several I saw all had the same American address, I googled the address, it was registered to a legitimate American business. The scammers had no links to the business, so they were just using a false address. Another I looked up, the address had nothing registered, so I looked on a map. It was a vacant block.
Now, I don’t click on any shopping links that are posted on Facebook. If I’m tempted and unsure I go to their Facebook page. After clicking on the link it may take you to a page with a completely different name, still selling the same products. Then I read the reviews. The first few are always praising the company and the products… these are from their friends or false accounts. Scroll past them and you will generally find scathing reviews on the products and customer service. I also type the company name and “reviews” into Google, again, you will find several fake reviews praising them and hundreds warning against them. Another thing you can do it to save a screenshot of the product you are considering buying and enter it into Google image search. Among all of the fake ones you will find the image from the webpage of the legitimate retailer that the scammers have copied and pasted it from.
My biggest word of advice, no matter who the online retailer is, always pay with PayPal!
1. A lot of these scammers don’t just intend to get your money by selling crap or non-existent products, they also intend to steal your credit card information.
2. The less online businesses that have your bank details the less risk of your financial info being exposed if there is a data breach. I even use Paypal for trusted sited such as Coles and Woolworths just to be safe.
3. Probably one of the best features, if you have no luck getting a refund from the retailer, lodge a complaint with PayPal. They then attempt to contact the retailer who may provide a refund because they don’t want to lose their PayPal selling account, or, if they don’t respond to PayPals request, PayPal will issue you with a refund.