Thrifty Thinking: Holiday Scams

From toy flipping to counterfeit goods, secondary market gift cards, and shipping scams -- there is no shortage of holidays shopping schemes this year. I had a chance to interview Michael Lai, consumer protection expert, and CEO of Sitejabber about scams that are appearing this year and tips to avoid them.

1. What are some of the most common holiday scams? 

(1) Gift Card ScamsGift cards are a favorite target for scams this time of year. Retailers are estimating that gift card shopping will hit an all-time high with 80% of shoppers expected to buy at least one gift card during the holiday season. The problem with ordering gift cards from unvetted websites is that they may never end up being delivered. Some fraudulent sites will sell you a gift card with a zero or inaccurate balance.

(2) Counterfeit Goods
No one wants to give a fake present to someone close to them, so beware of an increase in counterfeit goods being sold online this time of year. Be on the lookout, not just for standard counterfeit goods, but for everything from phony brand name tennis shoes to knockoff designer jewelry.

(3) Missing or Delayed Deliveries
Everyone wants their gifts to arrive prior to the holiday so that they can be opened on Christmas day. However, there are websites that may promise a rare holiday toy, only to deliver it after Christmas or not at all. Sites are set up to display the most wanted Christmas presents and sometimes they just do not have them in stock to be sent out.

(4) Coupon Scams
The holidays are a very popular time for coupon scams. Be careful entering your information into coupon sites. The best coupon websites do not require you to buy anything or register to use their coupons. If you have to enter in your personal information, it might be a phishing scam. Giving away your cell phone number just to get a coupon code may also be a bad idea.

(5) International Shopping and Shipping Issues
It is a tech holiday season, but before you order your drones, self-balancing electric scooters, or tablets, beware of where it will be shipping from as many affordable gadgets are manufactured in overseas countries and you may have problems with your gifts. Companies may say a product is currently in stock but then you never receive it only to find out it was never in stock.

2. Why are scams so prevalent?

Online scams are so prevalent due to three main factors: (1) the increased convenience of shopping online, which has led to consumers spending more time and money on the internet; (2) the continued proliferation of new online merchants and businesses, and (3) the fact that many consumers are always looking for the best price or a great deal. With so many new businesses offering these deals, it's becoming more difficult to separate the good from the bad, and scammers take advantage of this.

3. How can consumers make sure they don't fall victim to scams?

To avoid scams, we recommend consumers do the following: 

(1) Shop early so you aren’t limited to the few options that can rush shipment before a certain date.

(2) Check reviews before making a purchase. The information is out there -- consumers just need to be vigilant and take the time to do their research.

(3) Always pay with credit card or Paypal, as they both offer some level of consumer protection. Never pay with cash, check, or wire transfer.

(4) Use common sense: If something seems too good to be true, it usually is.