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Online Shopping Scams 101—Common Tactics Scammers Use and How To Outsmart Them

Written by

Ashley Ferraro, Marketing

Reviewed by

May 26, 2025

•

Min Read

Protect Your Payments

According to the Better Business Bureau’s 2024 Scam Tracker Risk Report, over 30% of all reported scams involved online shopping, with 87.5% resulting in financial loss^[1]. With online shopping scams becoming more common and increasingly sophisticated, even seemingly routine purchases carry risk without the proper precautions.

To help you shop with caution, we’ll explain how online shopping scams work, what red flags to watch for, and what steps to take if you’ve already been targeted. Most importantly, we’ll cover how to shop more safely moving forward, including how virtual cards can add a powerful layer of protection to online transactions.

What Is an Online Shopping Scam?

An online shopping scam is a fraudulent scheme where scammers pose as legitimate online sellers to trick customers and exploit their trust for financial gain or data theft.

A close-up photo of a person typing on a laptop placed on a wooden surface, with a computer screen in the background — Source: *Glenn Carstens-Peters*

Unlike technical hacks or data breaches, online shopping scams rely on impersonation and deception. Scammers create fake e-commerce sites or pose as legitimate sellers, using tactics like urgency and scarcity to pressure you into making impulsive purchases without doing your due diligence and verifying the store’s authenticity.

After making a purchase, you may never receive the product, get a counterfeit or damaged item, or have your financial information stolen through fake checkout forms. The stolen information can be exploited in other attacks, such as account takeovers or identity theft, or resold on illicit marketplaces.

Types of Online Shopping Scams

A close-up photo showing a person browsing an online clothing store on their smartphone — *Source:* *cottonbro studio*

Understanding these different types of online shopping scams can help you spot them before you become a victim:

Social media marketplace scams
Order confirmation scams
Dropshipping scams
Subscription scams
“Inventory Clearance” or “Going Out of Business” scams

Social Media Marketplace Scams

On peer-to-peer shopping platforms like Facebook Marketplace or Craigslist, scammers post high-demand items at tempting prices and ask for payment through methods without purchase protection, such as:

This makes it difficult to dispute the charge and recover your funds.

Criminals might use social media for other types of online shopping scams. For example, they can run ads on social media platforms like Facebook, Instagram, and TikTok, offering trending products at steep discounts or claiming that shopping with them supports a charitable cause^[2].

Clicking on these ads leads shoppers to websites that closely resemble legitimate retailers, mimicking their logos, fonts, and branding, but with subtly altered URLs (e.g., “nordstomm.com” instead of “nordstrom.com”). If you place an order there, you might never receive the product or have your personal information stolen.

Order Confirmation Scams

In these scams, you receive an email that looks like it’s from a major retailer—Amazon, PayPal, or eBay—saying there’s a problem with your recent order. You’re prompted to “verify your information” by clicking a link. That link may lead you to a phishing site designed to steal your login credentials.

Another variation of this scam involves fake order confirmations for expensive items you didn’t buy, like a television set or a laptop^[3]. You might receive a message saying, “If you didn’t authorize this purchase, call our fraud department immediately.”

After contacting the number, you’re connected to a scammer posing as customer support. Under the pretense of helping you cancel the order, they may ask for:

Your account password
Payment info
Remote access to your device

Dropshipping Scams

A cropped photo of a person holding a payment card while browsing a web store on their laptop — *Source:* *Kindel Media*

Some scammers disguise their schemes as dropshipping businesses. While dropshipping is legal, it becomes deceptive when sellers misrepresent product quality or shipping times. They often use flashy websites and fake discounts to lure you, but the items may arrive late, look nothing like the listing, or never appear.

Subscription Scams

A typical subscription trap begins with an enticing offer—a "free trial" of a product (often a health supplement or beauty cream) for which you only pay a nominal shipping fee. The scammers don’t clearly disclose that after a short trial period (usually 14 days), you'll be charged the full price for the product, which can be $90 or more, and enrolled in an auto-renewing monthly subscription.

Once enrolled, canceling the subscription can be intentionally difficult, involving long hold times, multiple steps, or unresponsive customer service.

“Inventory Clearance” or “Going Out of Business” Scams

Fraudsters may advertise fake inventory clearance or store closure sales, often using the names of well-known brands or retailers to establish credibility and make their offer more enticing.

For example, the Better Business Bureau (BBB) has reported on cases where scammers created fake websites resembling well-known retailers like JOANN Fabrics, advertising massive discounts under the guise of a closing sale^[4]. Their goal was to trick shoppers into revealing personal or financial information.

Warning Signs of Online Shopping Scams

Online shopping scams aren’t always easy to spot, but some red flags might still be noticeable. Here are some warning signs to look out for:

Warning Sign	What It Means
Pricing that’s too good to be true	Steep discounts on trending products are often used as a lure; legitimate retailers rarely reduce prices by 80% or more.
No contact info or vague policies	A lack of address, phone number, or item return terms often means the seller isn’t real.
No HTTPS (no padlock in the browser address bar)	The site may not be secure, and your personal or payment info could be intercepted or misused.
Poor grammar or low-quality images	Sloppy writing or stolen product photos suggest the site was thrown together quickly.
Unusual payment requests	Requests to pay via peer-to-peer payment apps, gift cards, or crypto are red flags, since these payment methods might offer fewer or no fraud protections.
Messaging with a sense of urgency	Fraudsters will use this legitimate sales tactic, combined with unrealistically low pricing, to entice you to shop on their scam website.
No reviews or only positive reviews	Scam sites often have no real customer feedback or use fake five-star reviews that sound generic or repetitive.

What To Do if You Get Scammed Shopping Online

A close-up shot of a person browsing an online marketplace on their laptop — *Source:* *Campaign Creators*

If you fall victim to an online shopping scam, reacting quickly might help you recover your funds and reduce future financial losses due to the scam. The steps you should take include:

Securing your accounts—If you entered your payment info on a shady website or see unauthorized charges, freeze or cancel the card. Even if no fraud has occurred yet, it’s better to block potential misuse before it happens.
Contacting your payment provider—Contact your bank or credit card issuer to dispute an unauthorized or fraudulent charge.
Documenting everything—Gather all related documentation, including emails, receipts, order confirmations, and screenshots of the product listing or website. This information will support your case when disputing charges or reporting the scam.
Reporting the scam—Report the online shopping scam to the authorities, including the Federal Trade Commission (FTC)^[5], the FBI Internet Crime Complaint Center (IC3)^[6], or the Better Business Bureau Scam Tracker^[7].

Strategies for Online Shopping Scam Prevention

With a few simple habits and the right tools, you can prevent most online shopping scams and secure your personal and financial information before a purchase ever goes wrong.

Here are some useful online shopping practices that can help protect you from scams:

Shop from reputable retailers—Only make transactions with well-known brands or trusted stores, and always check the URL to confirm you’re on the correct website.
Investigate before making a purchase—Before shopping with a new online retailer, research the company name, check how long the site has been operating (tools like WHOIS^[8] can help), and look for genuine customer reviews.
Avoid storing payment information online—While convenient, saving your credit or debit card details on shopping sites increases the risk of criminals obtaining them in case of a breach.

If you want even more protection from online shopping scams, especially those that target your payment card information, consider using virtual cards to shop online. These cards come with unique card numbers you can use as a stand-in for your actual card numbers, protecting them from potential theft and misuse.

While some banks like Citi and Capital One offer basic virtual cards, a dedicated provider like Privacy gives you more control over your cards and spending without requiring you to open a new account with a specific bank.

Privacy Virtual Cards: Shield Your Payment Info and Shop Confidently

Over 250,000 Americans trust Privacy, a BBB^®-accredited virtual card provider, to help them shop securely online. Once you link your bank account or debit card to it, Privacy allows you to instantly generate virtual cards tailored to how you spend and where you shop.

You can create three types of Privacy Virtual Cards:

Privacy Card Type	Description
Single-Use	Perfect for one-time purchases, this card automatically closes shortly after it’s used for the first time. So, even if the card information is exposed or stolen, it can’t be reused.
Merchant-Locked	This card “locks” to the first merchant you use it with. Any charges from other sellers will be declined, making it a good choice for subscriptions and recurring payments.
Category-Locked	“Tied” to a specific merchant category (like groceries or retail), this card helps you budget by blocking purchases outside the selected category.

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With Privacy, you can also:

Set spending limits on your cards, and all charges above the limit will be declined. This feature helps protect you against overbilling, surprise charges, or undisclosed fees.
Pause or close cards instantly, stopping all further charges to them. This feature helps protect you from unwanted payments, such as those that might occur after you’ve unsubscribed from a service.

Shop Conveniently With Privacy

Privacy offers multiple features for a safer and more streamlined online shopping experience. As a Privacy user, you can:

Autofill virtual card details at checkout with the Privacy Browser Extension, available for Firefox, Edge, Chrome, Safari, and Safari for iOS.
Use the Privacy App for Android or iOS to create, manage, or pause cards anytime, anywhere.
Get real-time alerts for every purchase or decline, helping you spot potentially suspicious activity.
Add custom notes to your cards to help you organize them and remind you of subscription renewal dates.
Store and manage your virtual cards securely alongside your saved logins if you’re a 1Password user.

Getting Your Privacy Virtual Card

Getting started with Privacy is easy, and it only takes a few steps to get your virtual card:

Create your Privacy account in just a few clicks
Verify your identity by entering the KYC (Know Your Customer) details
Link your funding source—either a U.S. bank account or debit card
Generate your first Privacy Virtual Card

Privacy offers four monthly plans tailored to different spending styles:

Plan	Monthly Cost	Number of New Virtual Cards per Month	Benefits
Personal	Free for domestic transactions	12	Secure transactions with Single-Use & Merchant-Locked Cards Set spending limits and pause or close cards at any time Fast and secure checkout using the Privacy Browser Extension and Mobile App
Plus	$5	24	All Personal plan features Priority support and Live Chat (Mon–Fri, from 9 a.m. to 5 p.m. ET) Additional features like Category-Locked Cards, Shared Cards, and Card Notes
Pro	$10	36	All Plus features Foreign transactions at zero fee 1% cashback on eligible purchases (totaling up to $4,500/month)
Premium	$25	60	Everything in Pro

References

^[1]Better Business Bureau. https://www.bbb.org/article/news-releases/31499-2024-bbb-scam-tracker-risk-report-shows-financial-grooming-scams-lead-to-high-dollar-losses, sourced April 30, 2025

^[2]Better Business Bureau. https://www.bbb.org/all/social-media-scams/think-twice-before-buying-from-these-social-media-ads, sourced April 30, 2025

^[3]Writers Guild of America. https://www.wgal.com/article/fake-invoice-scam-targets-consumers-fraudulent-charges/64498989, sourced April 30, 2025

^[4]Better Business Bureau. https://www.bbb.org/article/news-releases/31498-bbb-scam-alert-how-to-spot-a-fake-going-out-of-business-sale, sourced April 30, 2025

^[5]Federal Trade Commission. https://reportfraud.ftc.gov/, sourced April 30, 2025

^[6]Federal Bureau of Investigation. https://www.ic3.gov/, sourced April 30, 2025

^[7]Better Business Bureau. https://www.bbb.org/scamtracker, sourced April 30, 2025

^[8]WhoIs. https://who.is/, sourced April 30, 2025

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Privacy — Seamless & Secure Online Card Payments

Checkout securely online by creating unique virtual card numbers for every purchase. Avoid data breaches, unwanted charges, and stolen credit card numbers.