6 Most Common Ecom Scams (and What Brands Can Learn)

E-commerce and the online shopping world have experienced rapid growth in recent years. The COVID-19 pandemic hastened this, changing consumer shopping habits and leading to a 20% increase in online transaction values.

However, with this explosive growth came a surge in sophisticated e-commerce fraud. Ecom scams have evolved. What fraudsters once accomplished simply by stealing credit cards has morphed into coordinated attacks that take many forms.

Clutch surveyed 401 consumers about their experiences and opinions about online scams. A startling 71% reported encountering a scam attempt while shopping online, demonstrating how widespread ecom scams are. Thankfully, there are a few steps brands can take to protect customers—and their reputations.

The Modern E-Commerce Fraud Landscape

Online shopping fraud is no longer limited to simple payment problems like card theft. Using AI and advanced tactics, today's criminals target user trust, account credentials, and logical systems. Modern e-commerce fraud is a complex, multi-stage attack on the e-commerce ecosystem that endangers not only revenue streams but brand reputation and operational security.

Scams are prevalent due to:

• Technological sophistication: Bad actors use AI and machine learning (ML) to produce realistic deepfakes, cloned voices, spoofed websites, and convincing phishing emails, making fraud harder to detect.
• Anonymity and scalability: Fraudsters can launch phishing campaigns or distribute malicious software to thousands of people at once, and they’re highly difficult to track or apprehend.
• Social engineering: By exploiting human emotions, scammers use psychological manipulation to trick victims into bypassing security measures.
• Data breaches and stolen credentials: Countless massive breaches have made personal information, such as online credentials and credit card numbers, cheap and readily available on the black market.
• The Dunning-Kruger Effect: This cognitive bias leads people to overestimate their competence and believe they are too smart and tech-savvy to be tricked. Ironically, this makes them less cautious and therefore more likely to fall victim to online scams.
• The explosive growth of e-commerce: The ongoing increase in online shopping continuously creates more opportunities for fraudulent transactions, fake vendors, and intercepted payments.

Our survey found that 61% of consumers think platforms like marketplaces, social media, and search engines are most responsible for preventing e-commerce scams. Despite this, 67% of consumers also believe brands could take more initiative to protect their customers by, for example, monitoring or removing fake ads.

For brands, the risk goes beyond lost revenue from fraudulent transactions. E-commerce fraud puts their brand equity at risk.

6 Most Common Ecom Scams

These are the most common types of scams related to online shopping and e-commerce platforms:

1. Fake Chargebacks
2. Refund Abuse + Policy Exploitation
3. Phishing + Brand Impersonation
4. Account Takeover (ATO) Attacks
5. Triangulation Fraud and Marketplace Manipulation
6. Bot-Driven Attacks

Both companies and consumers should know the signs to watch for.

1. Fake Chargebacks

Also known as “friendly fraud,” fake chargebacks occur when a consumer makes a legitimate purchase but then falsely disputes the charge with their bank to receive a refund, while keeping the product or service. This fraud works by exploiting consumer protection laws to claim they didn’t receive the item, the transaction was unauthorized, or the item was “significantly not as described.”

For the offender, the consequences of fake chargebacks may include account termination, negative impact on their credit report, blacklisting, and, in extreme cases, legal action for theft or fraud.

What Brands Can Learn

Fake chargeback scams cause significant revenue loss, high fees, and potential termination of the brand’s merchant accounts. However, there are ways to mitigate the risks of friendly fraud:

• Implement robust order tracking: Maintain detailed records of delivery, including when it is signed or tracked, and consider requiring delivery drivers to provide photographic proof of delivery.
• Improve return policies: Unintelligible or overly strict return policies may lead customers to file disputes rather than request a refund from the merchant.
• Provide clear billing descriptors: Use recognizable business names in billing statements to prevent customers from forgetting a purchase and falsely disputing it as unauthorized.

Detailed transaction records, including order tracking, are your best evidence to fight chargeback disputes.

2. Refund Abuse + Policy Exploitation

The combination of refund abuse and policy exploitation involves malicious manipulation of a company’s consumer-friendly return or customer service policies. This problem is on the rise thanks to wider e-commerce usage, easier return policies, and organized fraud networks, in which scammers share techniques and offer services to help other scam retailers.

Some often-used methods are:

• Item not received (INR) claims: Claiming an item never arrived despite its delivery, often exploiting gaps in courier tracking.
• Wardrobing and usage: Buying goods, wearing or using them for a specific event or a single use, and then returning them.
• Empty box/item swapping: Returning an empty box, a damaged item, or a different, cheaper item in a more expensive item’s packaging.
• Return policy abuse: Exploiting lenient policies to excessive levels.
• Digital product fraud: Claiming digital content, such as software or games, was never accessed or failed to activate.

Fraudsters tend to strike during busy holiday periods when retailers are overwhelmed, which increases the likelihood of quick, unverified refund approvals. They may also use tactics to pressure customer service agents into issuing refunds.

This type of ecom fraud poses risks to businesses, including financial losses, reduced profit margins, operational strain, higher prices for honest customers, and — like many types of e-commerce fraud — damage to their brand integrity.

What Brands Can Learn

Refund abuse and policy exploitation cost brands over $100 billion per year, transforming these common scams from a minor operational nuisance into a massive, profit-decimating threat. Some lessons to take to heart are:

• Implement data-driven return policies: Use AI and ML tools to analyze patterns and flag high-risk transactions before the system processes them.
• Identify serial offenders: As many major retailers do, consider banning or blacklisting customers who have excessively high return rates.
• Balance customer experience with loss prevention: Inspect items before issuing refunds, document all customer service interactions, require photo evidence of defective or damaged items, and train employees on fraud red flags.

You want to keep your customers happy without compromising your brand’s longevity.

3. Phishing + Brand Impersonation

Phishing attempts via brand impersonation involve attackers masquerading as trusted retailers like Walmart, Amazon, or PayPal to steal credentials, personal information, or money. These scams use fake emails, texts (smishing), or ads to lure users to spoofed websites that look identical to the real, trusted brand through:

• Typosquatted domains: URLs with thinly veiled typos, like paypa1.com
• Fake login pages: Clones of legitimate websites designed to harvest user credentials
• Malicious links or attachments: URLs or documents that lead to malware downloads or phishing landing pages
• Urgent or threatening language: Claims of unauthorized activity or suspicious orders to bypass rational thought
• Request for payment or personal information: Demands to verify payment methods, pay via gift cards, or enter sensitive personal data

This type of scam can manifest in multiple ways. For example, a consumer might receive an email stating a “fake” purchase and asking them to click a link to block the transaction, or a text message about a “delivery failure” requesting a small fee for redelivery.

What Brands Can Learn

These scams, too, have become increasingly sophisticated, upgrading from simple “copy/paste” logo thefts into sophisticated, AI-powered campaigns that weaponize consumer trust. There are several takeaways for companies:

• Implement rapid takedown procedures: Every hour a phishing site remains live, more of your customers are at risk. Establish fast-tracked relationships with domain registrars, social media platforms, and web hosts to remove fraudulent content immediately.
• Educate customers and employees: Train employees regularly on how to spot phishing, including urgent, high-level impersonations. Educating customers on what to look for is also essential (for example, the “four Ps” of phishing: pretend, problem, pressure, pay).
• Institute proactive domain monitoring: Adopt AI-powered brand protection tools to continuously scan for lookalike domains, counterfeit listings, and fraudulent social profiles as quickly as attackers can create them.

These scams demonstrate how brand reputation is a primary target.

4. Account Takeover (ATO) Attacks

In an ATO attack, scammers use stolen credentials, obtained via phishing, malware, or data breaches, to gain unauthorized access to legitimate user accounts. These attacks include unauthorized purchases, loyalty point theft, and data theft.

ATO attacks can affect businesses in multiple ways, including financial losses, reputational damage, operational disruption, account vandalism, or even legal and regulatory penalties.

What Brands Can Learn

Customer trust is fragile, and traditional security is insufficient. Simple password systems won't stop fraudsters from credential stuffing (trying stolen passwords from other sites) or using bot-driven attacks. Therefore, it’s in your best interests to:

• Implement multi-factor authentication (MFA): Requiring MFA is the most effective protection against stolen credentials being reused.
• Monitor with real-time fraud detection tools: Program systems to flag suspicious activity.
• Limit the sensitive data you store: Storing less data means scammers who manage to break in have less ammo to use against your brand and your customers.

Educating customers on phishing risks and the importance of unique passwords can also be helpful.

5. Triangulation Fraud and Marketplace Manipulation

Triangulation fraud is an elaborate scam in which criminals operate a fake storefront on platforms like eBay or Amazon, using stolen credit card information to fulfill orders with goods purchased from other retailers. The fraudster takes a legitimate payment from a buyer, uses stolen credentials to buy the item, and has the product shipped to the buyer.

The buyer receives their item, the fraudster receives their payment, and the owner of the stolen credit card often disputes the charge, forcing the real retailer to refund the money without receiving their merchandise back.

Because these common scams often appear to be legitimate transactions and the scammer never handles the merchandise, they can be hard to detect and trace. Triangulation fraudsters often target low-value, high-demand goods to evade automated fraud systems.

Austin Mallar, CTO of Longhouse Branding + Marketing, warns, “Even if a scam happens off-platform, the reputational impact lands on the brand.”

Online marketplaces are at particular risk in these schemes. Fraudsters may leverage a major platform’s reputation to build instant trust with consumers, acting as a seller on one platform and a buyer on another, making it challenging to connect the fraudulent activity.

What Brands Can Learn

Important lessons to prevent these scams include:

• Protect your brand reputation: Monitor third-party marketplaces for unauthorized listings misusing your branding to facilitate these scams.
• Detect red flags: Look for high-volume orders with shipping addresses that differ from billing addresses, particularly when the purchaser is using a new account or has items shipped to multiple locations.

Marketplace monitoring is a must, as is partnering with reputable fraud detection providers.

6. Bot-Driven Attacks

Bot-driven e-commerce attacks are automated scripts that target apps, websites, and APIs to commit fraud, disrupt service, or steal data. Common scams in this category include inventory hoarding/scalping, price and content scraping, and DDoS attacks.

For brands, these attacks can have harsh operational consequences, including reduced site performance, financial losses, distorted marketing analytics, and reputational strain.

What Brands Can Learn

Preventing bot attacks could involve:

• Bot mitigation solutions: Real-time detection is crucial. Your solution should protect the entire user journey across all touchpoints.
• Traffic monitoring and anomaly alerts: Stay alert for unusual traffic patterns, behavioral anomalies, and skewed operational impact metrics.

Bot-driven attacks expose critical vulnerabilities in website performance, inventory management, and cybersecurity.

How Brands Can Build a Strong E-Commerce Protection Strategy

Creating an effective strategy to protect your brand from e-commerce scams doesn’t have to be overwhelming. Here are a few simple tips to start:

• Be more proactive: Monitor for threats rather than only react to breaches and fraudulent transactions after they occur.
• Establish cross-functional ownership: Break down traditional corporate silos. Security, IT, marketing, and customer service should share a unified responsibility for detecting and preventing scams.
• Be smarter about technology use: Go above and beyond basic technology habits and adopt layered, AI-aware digital security measures.
• Focus on customer-centric security: Prioritize user trust by implementing seamless measures that safeguard sensitive data without slowing the customer experience.

With new threats proliferating every day, a strong protection strategy requires a strong, AI-fueled approach.

Protect Your Company and Your Customers

As e-commerce grows exponentially, these common scams will also continue to evolve. Fraud prevention must be a core pillar of your operations to shield your brand and your customers from financial loss.

Protecting your revenue and your customers’ trust should go hand in hand. Trust equals customer retention, but the opposite is also true. A single instance of a customer’s account being compromised can cause your brand severe, lasting reputational damage. Build and maintain trust by taking proactive steps.

About the Author

Anna Peck Content Marketing Manager at Clutch

Anna Peck is a content marketing manager at Clutch, where she crafts content on digital marketing, SEO, and public relations. In addition to editing and producing engaging B2B content, she plays a key role in Clutch’s awards program and contributed content efforts. Originally joining Clutch as part of the reviews team, she now focuses on developing SEO-driven content strategies that offer valuable insights to B2B buyers seeking the best service providers.

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