Online Stores Posing as Retailers in Australia
The ACCC is investigating a series of deceptive social media ads from online stores claiming to be retailers in Australia. The shops are running ads about closing-sales in order to entice customers to buy more products. However, many of these stores are not going out of business, and they may not actually be Australian at all.
“After so many years of love and dedication to our Maison Canberra boutique, the time has come to say goodbye.”
This is just one example of many deceptive social media ads claiming to have a closing-down sale. According to the Guardian, Maison Canberra, has no ABN and no registered company name on its website.
These retailers claiming to be Australian are known as “ghost-stores.” These stores, which have no physical shopfront, run ads on social media with a false narrative about going out of business. Their goal is to entice customers to buy products.
The products they sell typically aren’t Australian either. Often they are shipped from overseas.
According chief executive of the Consumer Policy Research Centre, Erin Turner, these stores could be breaking consumer law for retailers in Australia.
Turner claims that social media platforms should be responsible for confirming the legitimacy of business advertising on their platforms.
AI ethics expert Jeannie Paterson says that the main issue is not that the products are available elsewhere for cheaper.
“The issue is that they’re saying they’re discounting it from a storefront, and there is no storefront, which means there is no real discount,” she says.
However, even though these stores may be breaching Australian law, it will be difficult to penalize them if they are run from abroad.
Latest Offenders
Another shop guilty of this “ghost-store” practice is the company Molly-Smith, which claims to be a family-owned retailer in Australia. According to the store’s Facebook page, the company is facing financial difficulties and the impact leftover from Covid.
Cooper & Ellis is the latest example of an online store claiming to be a local brand, says Byron Bay Chamber of Commerce president, Matt Williamson.
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