Identifying Fake Storefronts: How to Shop Safely on Social Media

While scrolling through social media, you spot an ad for an amazing deal on a trendy item. The website looks legitimate, the prices are unbeatable, and you can’t resist. But what if the deal is too good to be true? Fake storefronts and fraudulent sponsored ads are increasingly common on social platforms. “About a quarter of all financial losses from fraud reported to the Federal Trade Commission in 2021 — or roughly $770 million — stemmed from online scams originating on social media platforms like Facebook, Instagram, TikTok and others.”¹ Here’s how to recognize and avoid these scams.

Fake storefronts often look convincing, with professional-looking ads and sleek websites. They rely on unbelievable discounts, drawing you in with deals that are far below market price, “selling products like clothing, home goods and jewelry. But in some cases, never deliver the goods, and steal individuals’ credit card information.”² These ads often use urgent phrases like “limited time offer” or “only a few left” to pressure you into quick decisions. Some of these ads will even use fake customer reviews or likes on posts to seem trustworthy. By the time you realize something’s wrong, for example: no delivery, low-quality items, or stolen personal data, the scammers are long gone.

Here’s what to watch for when encountering ads or online stores:

• Odd Website URLs: If the URL doesn’t match the brand name or contains strange extensions like “.xyz” or “.shop,” pause before proceeding.
• Lack of Contact Information: Legitimate businesses usually provide an address, phone number, and customer service details.
• Limited Payment Methods: Beware if the store only accepts wire transfers, prepaid cards, or cryptocurrency.
• No Online Presence: A quick search for the company or reviews comes up empty—or worse, filled with scam reports.

If you’ve fallen victim to a fake storefront, act quickly to limit the damage. Dispute the charge with your credit card company or payment service to request a refund. Secure your accounts by changing passwords and enabling two-factor authentication, especially for any linked to the scam. Finally, report the scam to the social media platform where you encountered it and to the Federal Trade Commission (FTC) at ftc.gov. Fake storefronts and ads thrive because scammers exploit our habits—quick scrolling, impulse buying, and a tendency to trust what looks professional. The good news? With a little extra vigilance, you can sidestep their traps. The next time you see an incredible deal in your feed, take a moment to question it. Your wallet and personal data will thank you.

^{1. Cerullo, Megan. “You probably know someone who has lost money in a social media scam.” CBS News, 28 January 2022, https://www.cbsnews.com/news/social-media-scam-lose-money/}

^{2. Cerullo, Megan. “How to avoid this common social media shopping scam.” CBS News, 2 May 2023, https://www.cbsnews.com/news/social-media-shopping-scam-cbs-news-explains/}