Misleading 'ghost stores' trick Australian consumers

SBS Australia

2 days ago

Australians have been warned to stay alert for "ghost stores" as shoppers who fall victim have few avenues for recourse. At least four such stores have been noted by the Australian consumer watchdog for misleading shoppers into buying low-quality items. They often claim to be local Australian businesses that are closing down and selling off high-quality goods, when they are actually based overseas and sell poor-quality, drop-shipped clothes and footwear.
"This conduct preys on the empathy of consumers who have a genuine desire to support local businesses," Australian Competition and Consumer Commission deputy chair Catriona Lowe said.
The commission specifically issued public warning notices about everly-melbourne.com, willowandgrace-adelaide.com, sophie-claire.com and doublebayboutique.com. However, the issue appears to be more widespread, with the watchdog receiving at least 360 reports about 60 online retailers since the start of 2025. Many complaints alleged ghost stores were refusing to provide refunds, were offering only partial refunds, or were not responding to complaints at all. Normally, Australians could pursue their consumer rights and go to a local store.
But because so many of the shops operate overseas, the usual consumer guarantees would not apply, Consumer Action Law Centre legal director Stephen Nowicki said.
"There's very little you can do," he added. The commission has urged consumers to contact their bank to see if they can reverse the charge or stop the transaction. While this can be done when Australians fall victim to scams, the situation with ghost stores is less clear because shoppers still receive a product. "It becomes harder in these kinds of situations, compared to an outright scam, to know what is a genuine discount versus what someone is presenting as a discount but is something not worth what they are promoting it as," Mr Nowicki said. But there are some potential areas for reform.
Though governments could not pass laws that would give consumers jurisdiction against an overseas business, they could try to block and prevent advertising in the first place.
How to spot a 'ghost store' Operators generally target Australians through social media ads on platforms like Facebook and Instagram. They make themselves appear local by closing and then rebranding under new names that use different Australian suburbs, towns or cities. The competition and consumer commission has written to Meta, which owns both platforms, and e-commerce giant Shopify, which can be used to host and operate ghost web stores. It has also tried to educate shoppers. Ghost store domains often end with ".com" and not ".com.au", and many use AI-generated images. They also generally do not provide a physical address or a means of contact beyond an email address, while their Privacy Policy or Terms of Service sometimes refers to international regulations rather than Australian laws.