(Online) Buyer Beware: Scams Lurk on Sites Like Amazon

The more I use Amazon, the less impressed I am.

First, I don’t like the review system it employs. I also don’t think its prices are all they’re cut out to be. And finally, I think its products are not always the same quality as ones you can buy from other sources.

When it comes to how you spend your money, these issues can add up to some serious cash over time.

(Not to mention that the whole internet shopping thing is removing people from the social interaction that is so important for society to thrive.)

Internet Scams Based on False Reviews

Did you know that many reviewers on Amazon are paid reviewers? They are compensated to post positive things about products. I’ve written about this before.

Fakespot and ReviewMeta are two organizations that audit these kinds of reviews. According to their research, more than half the reviews for certain products are likely to not have been made in good faith.

Amazon, of course, disputes this.

According to a recent article by NPR, one man even became a paid reviewer for products after he ordered a product that didn’t work. He was sure that the reviews he relied on were false because the product was so ineffective. That led him into the world of paid reviewing.

It’s hard to know what to trust anymore. And while Amazon offers a great return policy on many items, outside vendors on the site can have different policies.

Dubious Pricing

Pricing on Amazon is another issue for me. While Amazon’s prices tend to be better on some very popular items, that is not the case for many others. In fact, I think prices for a lot of items are higher than prices from places like Walmart or Home Depot – online or in store.

It’s an interesting psychological game. Create the impression that your prices are the best (especially by focusing on popular items like electronics) and offer cheap or free delivery, and after a while buyers will believe that your prices really are the best for everything.

That’s just not the case. I have seen prices on Amazon 10% to 30% higher than other places, especially for food items.

Shady Tactics in Advertising

Finally, I have a beef about quality. I think some retailers that operate on Amazon can’t be trusted.

Some will advertise products like batteries that expire much sooner than you think or products that are made with lower quality standards because they are made in countries that have lesser regulations.

Shadier retailers also sell individual products from “multipacks” that they have split up even though the products are clearly marked as not for individual resale. In some cases, this can void the products’ warranty.

The most egregious violations are no different than those you may encounter at a regular store if the manufacturer is crooked. These types of violations are hard to prove unless you have a lab at home!

Measurement-Based Internet Scams

I am referring to the “watering down” trick. When packaging some items that are sold by liquid volume or weight, like shampoo, it’s possible for a retailer operating a storefront to water them down. With new, inexpensive “sealing” equipment, it’s not hard to replace a plastic seal.

But imagine being able to take a 12-ounce bottle and water it down by a single ounce. Suddenly, the seller has a “free” bottle for each 12 they sell. Not bad for margins. They can even advertise a lower price than legitimate competition. Some items can be outright fakes.

Other shady tactics are to offer a smaller product that looks larger in the picture and to offer a product based on weight that is not standard.

For example, one vendor may price their item in ounces while another might use grams. It’s all to confuse the buyer. Most buyers just look at the lowest price per unit.

How to Avoid Internet Scams While Shopping

My advice is to shop locally, even at big-box stores like Target or Walmart. These companies’ products are similarly priced, and the quality control is far better.

Sure, use Amazon for products that carry a manufacturer warranty, like electronics… just make sure the model numbers are the same as the ones you’re comparing them with at your local Costco!

More choice does not necessarily equate to better choice. Be careful how you choose to spend your hard-earned savings.

Good investing,

Karim

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Source: Wealthy Retirement