Social media is filled with companies offering 'bargains', but some are not quite what they seem. Here's how one such scam works.

If you're active on social media you have likely seen endless websites advertising either 'free' products where you 'just pay shipping', or heavily discounted gadgets where shipping is free. Most of these websites and brands will be completely unknown to most of us.

Whatever the offer, chances are they rely on essentially the same method: dropshipping. Far from offering you a good deal, they are actually acting as middlemen between you, the customer, and a factory that will produce, package, and ship whatever you order. Their prices, far from being competitive, will carry a substantial markup.

How it works

The basic premise is essentially this:

  1. They find a cheap product through, for instance and most seemingly commonly, AliExpress (a legitimate website where you can buy straight from factories, often in China);
  2. They mock up a product description and either choose to make the product free but shipping more expensive than the price of the actual good, or give the product a high 'original price' but mark it down substantially and offer free shipping;
  3. Once you place an order, it's automatically sent straight to the factory who will package and dispatch your product.

There are also several solutions that will further automate this process for the sellers. You can buy software solutions that will automatically find products on, for example, AliExpress, and populate your web store with photos, product descriptions, etc.

An example 'deal'

Here's an example to illustrate the above. As you can see from the post below, this company (which we found through Facebook) has been offering 'free' watches since September 2018:

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This advertisement was first posted on 27 September, 2018. / © Facebook screenshot

This is a classic version of the ploy, where you only pay for shipping. As is also often the case, once you visit the website they make it appear as though it's a "limited time only" deal - with a countdown clock showing you have less than 24 hours to cash in on the amazing deal before the offer runs out:

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The countdown, which has been running for months, shows you "only have 24 hours" to place your order. / © Screenshot

And of course, shipping is more expensive than you might think:

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The shipping cost comes to nearly 18 USD. / © Screenshot

What you actually get is a $1.02 USD watch

As you can see, this seller (one of many) on AliExpress is selling the same watch for $1.02 plus $1.05 shipping - meaning that you're overpaying by $15.88, and will receive what is essentially a novelty item.

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© Screenshot, AliExpress

Common products and warning signs

Watches are among the most common product used for this scam, but it's far from the only product sold this way. Other common categories include clothing, accessories, kitchenware, and electronics (particularly smartphone accessories). Over the summer we are likely to once again see a growth in product categories such as inflatable seats.

Things to look out for to avoid being ripped off in this way include:

  • Pricey shipping coupled with low/no product cost
  • Deep discounts that seem unjustified
  • Countdown clocks on the sales page
  • Shipping time - this will usually be quite long, up to 45 days, and sellers do often note this
  • Unknown brands - if you haven't heard of the brand and/or shop, search for whatever product brand you may find in their product images on websites such as AliExpress

Finally, it's a good idea to do a reverse image search. If you are using Chrome, for example, simply right-click a product image and select "Search Google for image." If this returns lots of other unknown websites with deep discounts... it's likely being sold straight from the factory.