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An image of ‘Molly and Peter Smith’ outside a closing down sale, which appears on the Molly-Smith online store. The website says the company has a store in Sydney but no such store exists. | Source: The Guardian

‘Scam shops’ target Aussie consumers, damage local retailers

Posted May 05, 2025 | By Samuel Ord

A special investigation has uncovered an alarming trend that targets Australian consumers with misleading and deceptive advertising.

The Guardian recently published an investigation into what are described as ‘ghost stores’, bricks-and-mortar retail outlets promoted by online retailers that do not exist. Jeweller describes this practice as ‘scam shops’.

These scam shops are elaborate online operations that go to great lengths to create websites promoting supposed family-owned businesses that are, for one reason or another, conducting Closing Down Sales.

The investigation highlighted a small high-street store in Byron Bay that promotes heavily discounted products because its owners are retiring.

The problem is that not only do the owners photographed in front of the business not exist, but neither does the actual store. It’s a scam!

The Guardian’s investigation found more than 140 ghost stores, with businesses falsely marketing themselves as Australian. The Australian Competition and Consumer Commission (ACCC) is investigating this concerning trend after a spike in complaints.

“Guardian Australia, aided by consumer experts, has tracked more than 140 online ghost stores, all of which pretend to be local businesses and are often accompanied by a fictitious story telling consumers they are closing down and must get rid of stock,” writes Catie McLeod.

"The analysis shows that the number of misleading sites, and threats to Australian consumers, is far more prevalent than previously known."

“The analysis shows that the number of misleading sites, and threats to Australian consumers, is far more prevalent than previously known.”

The report continues: “The majority of the identified ghost stores – based on analysis by Guardian Australia, evidence from customers, and a running list of sites compiled by the Scam Alerts Australia Facebook group – have been built using the Shopify e-commerce platform.”

Consumer Policy Research Centre’s Erin Turner said online platforms must do more to prevent these businesses from reaching Australian consumers.

“Platforms like Shopify and Instagram are making money as these ghost stores pay for advertising and support,” she said.

“We should call this what it is: digital retail fraud. Without coordinated action from digital platforms and regulators, these fraudsters will keep gaming the system.”

Jeweller’s 2024 State of the Industry Report noted the increasing influence of retailers operating without a traditional storefront, which included ‘showroom’ jewellers.