Shopify has seen its business and revenue grow since the pandemic.
Covid-19 has pushed consumers to buy more online, driving businesses to open online stores. The platform offers a cost-effective and easy way to sell online and has become an important sales channel for small businesses.
The opportunity was not lost on scammers, who flooded the platform alongside legitimate sellers, promoting counterfeits alongside genuine products.
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The Shopify platform provides the technology for businesses to create an online store and sell their products online. The Canada-based Shopify says its technology powers over one million merchants around the world.
To open a Shopify store does not require a custom website, making it a cheap option for selling online. The platform also offers features, such as templates, inventory tracking, and secure payment functions. They are all there to help sellers of all sizes do better.
Shopify does not own stores, and the sellers are independent. Yet, a Shopify store may appear legitimate because it is part of a known platform and looks the same as legitimate stores. Infringing stores do not have a different design, and they do not lack features.
Thanks to the platform, they can easily look beautiful and have advanced features.
Fakes on Shopify
E-commerce authentication service Fakespot says it found nearly 26,000 of the 124,000 Shopify stores it analyzed have raised red flags, as reported by the New York Post. Out of these flagged stores, almost 40% are “problematic sellers”, according to the report.
The problems relate to counterfeit products, pirated media, possible brand infringement, or a bad reputation. Other numbers include about 17% with negative reviews from customers and about 10% with no transaction history.
The cheap and easy set up attracts scammers. Bad actors set up stores on Shopify, advertise on Facebook and other channels. They then deliver through their Shopify store.
It seems like there no system checks the advertisers’ products before the ad runs online, so scammers can reach their target audience very much as legitimate sellers do.
One shopper wrote on Shopify about his Black Friday shopping: “I bought several Black Friday items from various Shopify stores on Facebook. I am sorry to say they were all frauds. ALL OF THEM. Most of the sites have been taken down, and they do not answer email.”
There are cases of fake stores, like the story of My Pillow Inc. The business makes pillows, sheets and mattresses. In 2018, the company found out that a scammer had used Shopify to set up a store, mypillowstore.com, that duplicates the genuine mypillow.com.
The company sued Shopify, which took down the infringing site. And he was not the only one.
Scammers may send shoppers counterfeit products, or they may disappear and never communicate with the buyer again. At some point, there may be complaints or proof of infringements. Until then, they can keep on their illegitimate advertising and sales.
Shopify on infringements
Shopify addresses fakes and scams, and takes down stores that violate IP rights and its policies. Infringements on Shopify are not the result of a Shopify strategy or technology.
Instead, Shopify presents a convenient platform, like Wix for example. As a result, Shopify unknowingly hosts scammers among legitimate sellers.
When a shopper suspects infringement, they can report it on the Shopify form.
How to report a store on Shopify?
1. Select what you want to report.
Go to Report an Issue with a Merchant here: https://www.shopify.com/legal/report-aup-violation
There are various options, so choose the one that best fits your situation.
2. Fill in the required information.
The information includes your contact information and the issue you want to report.
3. Sign the report electronically.
Now, wait for Shopify’s approval and decision on your report.
Wiser Market: online brand protection agency
Tens of thousands of sellers are using the Shopify eCommerce platform to scam consumers.
They sell counterfeit products, pirated goods, or simply take the money and disappear.
Shopify tries to take action against scammers on its platform, but it seems like its convenient platform and rapid growth have made it possible for scammers and counterfeiters to join as well.
We have a solution to your problem.
Wiser Market provides a proactive brand protection solution to protect your brand online. Our innovative monitoring system scans eCommerce stores, marketplaces, social media, and other digital channels to identify counterfeits and IP infringements such as trademark abuse, design patents, and patent infringements.
Combining our proprietary technology with unique eCommerce know-how and nearly 20 years’ experience, we protect brands with a fully-managed automatic solution, identifying and removing counterfeits with unrivaled results.
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WiserTip: Examine store names and URLs on Shopify. Although they look similar to other stores, many shady stores have odd names and URLs, or their domain name does not match the website name.
Q & A
What is Shopify?
Shopify is an e-commerce platform that lets you open online stores and manage them. It is cloud-based so you can use the platform anywhere with an internet connection.
Which activities are prohibited on Shopify?
Shopify has prohibited activities, such as running illegitimate activities, malicious and deceptive practices, and violating intellectual property rights.
How to avoid scammers on Shopify?
- Look at the price. If it’s too good to be true, it probably is.
- Check the domain name and see that it makes sense. For example, whether it’s the name of a China-based merchant posing as a US small business.
- Read comments.
- Consider a payment method that will refund your payment if you buy through them, such as PayPal.
Also, legitimate businesses have to start at one point too, so we do not advise against buying from new stores. Having said that, knowing the brand before making the purchase helps to mitigate the risks.