Buy and sell online safely – how to avoid online shopping scams

Estimated reading time
 6 min

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• What is an online shopping scam?
• How can you spot an online sales scam?
• Ways to avoid being scammed when buying or selling online
• What can you do if you think you’ve been scammed?
• Who can you contact if you’ve been scammed?

Nothing beats that feeling of snagging a bargain from the comfort of your couch while sipping your morning coffee. Or the satisfaction of selling your old furniture online, rather than tossing it out. Online marketplaces provide us with limitless opportunities to both make and save money. Unfortunately, it affords those same opportunities to scammers.

In fact, according to the National Anti-Scam Centre’s Scamwatch, Australians lost more than $7 million to online sales scams in 2023 alone. 

The deeper online our lives become, the more vulnerable we are to scammers, who take advantage of our trust to get their hands on our money. We’re going to guide you through the different ways scammers can use the online shopping space to their advantage, and how you can keep bagging those bargains without getting snagged by a scam.

What is an online shopping scam?

An online shopping scam is any scam that takes place in the online sales space. They’ll usually present in one of three ways:  

A fake online shopping website

• This is a website that appears as a legitimate retailer but is in fact run by scammers.
  
  
• The scammer will replicate an existing online store and offer a deal too good to pass up. Once you purchase their ‘product’, you’re left without your item and never hear from them again.
  

An online marketplace seller

• This is where a scammer will pose as a seller of goods (second-hand or brand new) on an online marketplace and accept your payment without delivering the goods.
  
  
• Most often these will be Facebook marketplace scams but can take place on other sites such as eBay or Etsy.
  
  
• This scenario plays out in a similar way to the online store scam, but it involves more personal interaction with the scammer. They will often communicate with you directly through an online marketplace, arranging for you to take ownership of their item (think cars, electronics, bikes, event tickets and even rental properties), and will sometimes even offer a receipt for their items to prove legitimacy.
  
  
• Once they receive payment, you will likely not hear from them again.

An online marketplace buyer

• A scammer posing as a buyer on an online marketplace pretends to be interested in your product and claims they have already paid you.
  
  
• Again, these are common Facebook marketplace scams, but they can take place on other sites such as eBay or Etsy.
  
  
• In this case, the scammer often uses a personal story to convince you they’re a genuine buyer (“My daughter just had a baby” for example). Once you agree to sell them your product, the buyer will ask to pay you through an alternative payment method, such as PayID or PayPal.
  
  
• After the buyer claims they have paid, you might get an email appearing to be from PayID or PayPal to say there was a problem in crediting your account. It will often direct you to ‘upgrade’ your account to a ‘business account’ by paying an additional fee, so that you can receive your payment.
  
  
• Similarly, the scammer might say they’ve paid extra to upgrade the  account on your behalf, sending you a fake email as proof. They will then request that you reimburse them.
  
  
• They may also send you a falsified receipt from these sites showing they accidentally overpaid for your item and ask you to reimburse them.
  

How can you spot an online sales scam?

As technology advances, scammers are developing more sophisticated ways to impersonate legitimate businesses and trick you out of your hard-earned money. The good news is there are some sure-fire ways to hold onto your money, your goods, and your peace of mind.

• You receive an invoice for an item or service you never ordered.
  
  
• You receive an email from a payment platform, claiming that you need to upgrade to a “business account” in order to receive your sales proceeds.
  
  
• Someone sells you a sob story that encourages you to give payment upfront or explains why the seller can’t show you more images of an item.
  
  
• A buyer immediately offers to pay for a high-value item without even viewing it. 
  
  
• There’s a sense of urgency or a threat of losing the sale or item if you don’t act quickly. 
  
  
• Online retail websites that appear incomplete and lacks credentials – for example, no ABN (Australian Business Number) is displayed, there is no FAQ section, privacy policy, returns policy or legitimate ‘contact us’ page.
  
  
• The price of an item just seems too good to be true.
  
  
• You get a receipt showing a buyer has paid too much for the item you’re selling and demands a refund on the difference. 
  
  
• When sending a payment to someone online, the details of the account holder don’t match up with the information you have about the seller or retailer.
  

8 ways to avoid being scammed when buying or selling online

1. If a price seems too good to be true, or a buyer is offering you full payment on an expensive item without even viewing it, stop, and consider further investigation before you proceed with the transaction.
   
   
2. Do not release any goods to the buyer until the payment has hit your account.
   
   
3. Be your own investigator and ensure you’re on the right website for any online store. Don’t simply click the first page that appears from a web search.
   
   
4. Never agree to refund someone who claims they overpaid for an item unless you have seen the money enter your account. Do not trust receipts they may send you, as they can be easily forged. 
   
   
5. Check for an ABN listed on any online store and look it up on the Australian Business Register website.
   
   
6. Always look a bit deeper at a brand or store you haven’t heard of before, especially if they’re offering items for a significantly lower price than their competitors.
   
   
7. If a website seems dodgy, use the ICANN website to find out when it was registered. A recent registration could indicate that it’s a scam.
   
   
8. Make use of PayID (a service that operates through your bank) when performing transactions on online marketplaces so you can match up the buyer or seller’s details.

Note: PayIDs are managed by your bank, and PayID would never contact you directly. If you have concerns, please contact your bank.

What can you do if you think you’ve been scammed?

If you think you’ve been scammed while shopping online, remember, this can happen to anyone. While it’s deeply frustrating, there are some immediate actions you can take to protect yourself from further financial harm. 

• If you have shared financial information or believe you have transferred money to a scammer, notify your bank immediately.   If you’re an ANZ customer, please contact us immediately.
  
  
• If you shared credit card details, block or cancel those cards immediately. If your cards are with ANZ, you can do this through the app. Learn more.

If you bought from a fake website from a well-known brand, you could inform them that someone is posing as their business.

Who can you contact if you’ve been scammed?

• Report the scam to the Police through the Australian Signals Directorate’s ReportCyber portal. This resource is there for reports of scams where money or personal information has been lost.
  
  
• You can contact the Australian cyber security hotline 24 hours a day, seven days a week on 1300 CYBER1 (or 1300 292 371).
  
  
• Help others by reporting to Scamwatch to help them prevent future losses, monitor trends and educate the population about emerging threats. 
  
  
• You can also contact IDCare, a not-for-profit organisation providing support to those experiencing identity and cyber security issues.