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The Risks of Buying and Selling on Social Media

by BBB Staff | Apr 2, 2021 12:00:00 PM

There are endless options for buying and selling online. Businesses that don’t utilize the virtual shopping space have far less exposure and, in turn, may not flourish the way tech-savvy businesses might. A business’s presence online is important but there are risks associated with e-commerce on social media platforms for consumers and businesses.

Who Benefits from Social Media Sales?

Most social platforms have marketing capabilities and algorithms that allow businesses to target users who would purchase their product for a relatively low cost. Instagram and Facebook have gone a step further in the last year, adding features like product tagging and purchasing directly through the platform. These features make it easier than ever for consumers to discover and purchase products without having to leave the platform.

Keeping users on their platform is every social media company’s main goal and, ultimately, why the algorithms exist. They want to serve as the primary connection between you and topics you’re interested in, people you want to hear from, and products you’re likely to buy. The longer you stay on the platform, the more opportunities they have to make money.

Businesses Beware

While an incredible marketing tool, e-commerce options on social platforms may introduce risks to businesses utilizing their capabilities. To be clear, Better Business Bureau is not advising against selling on social media platforms. Instead, we suggest not putting all your eggs into one e-commerce basket.

A problem with selling on social sites, like Instagram and Facebook, is that you may not have complete control of your own e-commerce. When selling through social media, you’re likely only a participant. The platform usually holds the reins.

Courtney Green, Better Business Bureau Great West + Pacific’s Digital Communications Specialist said, “Selling through platforms like Instagram is a great option for so many small businesses, but it shouldn’t be the only platform you use. They [Instagram] usually have the option to control a shop’s selling and distribution power, similar to how eBay controls its platform. If the algorithm changes, a business could have far less exposure and lose out on business.”

Risks associated with damaging your brand and making sales mistakes are also something to consider when selling your product online. Due to the viral nature of social media, any marketing missteps could be on blast.

Picture posting a marketing photo of a model wearing an outfit. If your online purchase tag states that the top in the photo is only $14.99, but your website price is $24.99, the price listed on social media is the one honored by Instagram (since you are using them as your e-commerce). This could potentially mean your entire profit margin is lost due to a typo.

If a consumer notices you have made this mistake, they could also share the tagged post on their feed. If that share turns into more shares, then your entire stock could be drained at the mistyped price.

Consumers Be Cautious

Hopefully, this isn’t your first heads-up about the dangers of shopping on social media. The 2019 trend of sharing photos that compare an item ordered to what was actually received says it all. If that doesn’t sound familiar, then know that what you see online isn’t always what you’ll get in the mail.

Recently, Better Business Bureau received a Scam Tracker report from a consumer claiming to have lost several hundred dollars to a cryptocurrency scam they fell for on Instagram.

The victim stated they were contacted by an account claiming to be affiliated with “expertchoicetrade.com.” The company asked for an initial investment of $200, which “grew” to $4,000 in a matter of weeks. The victim was then contacted via email where they were told the account had reached its maximum and their account status would need to be upgraded to continue investing.

“At this point, I started trying to find any information about the company. Doing a search of the address listed on their website took me to apartment complexes. So, after finding out I needed to “upgrade” to be able to withdraw my money, I started to ask more questions [via email], which never received a direct answer.”

How to Protect Yourself from Social Media Scams

  • Do your research. Before making a purchase, do a quick search of the business in question. Do they have valid contact information? Don’t be fooled by professional photography or consumer reviews on their website. These can be lifted from other sites. Check BBB Scam Tracker to see if others have been duped.
  • Search for previous complaints. Do a Google search of the business name followed by “complaints,” “reviews,” or “scam,” then see what pops up. If you find other people have been cheated by this business, steer clear.
  • Use good judgment. Many con artists play on consumers’ desires to help those in need. Keep this in mind and use your head, not just your heart, when supporting charitable causes. Go to org to research organizations before giving.

Online shopping scams ranked as the riskiest type of scam last year, according to the 2020 BBB Scam Tracker Risk Report. And while purchasing products through social media or a website is associated with some uncertainty, there are ways to keep yourself safe.

Both businesses and consumers should be incredibly cautious while selling or buying online. Businesses should remember the responsibility to shop smart online doesn’t solely belong to consumers. Businesses have a duty to represent themselves and their products truthfully, and provide secure ways to shop in an online marketplace.

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