Fakespot Analysis Reveals that Nearly 21% of Shopify Sites Show Signs of Fraudulent Practices
Fakespot, a free Chrome extension that detects fake product reviews and flags sketchy eCommerce sellers, today announced the launch of Fakespot Guard for Shopify Stores, a new feature to protect consumers from scam websites that are powered by Shopify. In addition to improving transparency on sites like Amazon, Best Buy, eBay, Sephora and Walmart, Fakespot now gives shoppers a Fakespot Guard grade to flag potential problems with sellers on Shopify, a popular eCommerce platform that is used by more than a million businesses that is now the #2 platform in the world.
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Fakespot Guard gauges site trustworthiness using AI and proprietary algorithms, quickly analyzing data associated with the site (including reviews and eCommerce data) and returning one of four grades:
- Approved: no issues that indicate fraudulent activity detected
- New Seller: newly launched site without enough data to warrant a Caution or Warning grade
- Potential Seller Issues: reports of fraud or operational practices similar to known fraudulent sites detected
- Warning: hallmarks of eCommerce scam sites detected, such as poor customer reports and scam transaction data
In an analysis of more than 124,000 Shopify-powered sites, Fakespot found that nearly 21% showed signs of fraudulent practices, triggering either a Caution or Warning grade for the eCommerce store. The analysis identified sellers with possible counterfeit and brand infringement problems, consumer complaints, poor seller reputations and sellers who operate as drop-shippers, which often sell cheap counterfeits and knock-offs deceptively marketed as genuine branded products. Fakespot Guard alerts users visiting Shopify stores that have potential problems so shoppers can make a more informed decision prior to a purchase.
“Shopify lowered the barrier for eCommerce store creation, making it simple for anyone to launch a professional-looking website with everything consumers trust and associate with legitimate online stores,” said Saoud Khalifah, founder and CEO of Fakespot. “That’s great for legitimate businesses, however, it has given fraudsters access to a sophisticated set of tools that they can leverage to steal sensitive personal or financial data and scam shoppers with possibly dangerous counterfeit products, such as cosmetics made with toxic materials, fraudulent dropshippers, and many other rip-offs.”
The Shopify platform is a prime target for scammers looking to scam consumers since Shopify doesn’t do background checks and offers free trial periods. It’s easy for disreputable offshore companies to setup virtual offices that create the illusion of a U.S. presence and then promote their scams with online ads. Scammers then leverage fake reviews and bogus credentials to deceive shoppers and use return policies to frustrate dissatisfied customers with return shipping costs that exceed product value. Poor seller regulation creates a Wild West environment where consumers receive shoddy products or no shipment at all.
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