Dropshipping Fraud

Dropshipping is a legitimate fulfilment model where a retailer sells products they do not hold in stock, ordering directly from a supplier who ships to the customer. Fraudsters exploit this model in several ways: they create storefronts advertising products they will never ship, collecting payment before disappearing; they use stolen payment credentials to place dropship orders at real suppliers; or they deliberately misrepresent goods — advertising premium items but shipping cheap counterfeits.

Because the fraudulent seller never handles the goods, they are difficult to trace and can scale deception quickly. Chargebacks fall on the supplier or payment processor, not the fake storefront. Marketplaces are a common venue because their built-in trust signals lend credibility to new, unvetted sellers.

Signs of fraudulent dropshipping include extremely long stated shipping times, prices significantly below market rate, no customer service contact, stock images rather than original product photos, and refusal to provide tracking information.