According to the FTC (Federal Trade Commission), recent data shows social media-based business scams have accounted for $2.7 billion in losses since 2021.
That's why it's super important to know the proper steps needed BEFORE YOU MAKE A PURCHASE to take to determine if a business you found on social media is legit and reputable.
1) Strong online presence:
Take a look at their social media profiles (all of them), official website, and Google Business Profile (if they have one) to make sure the platforms they use look professional and actively maintained. A Google Business Profile is usually a good indicator alone because it requires business address verification and Google suspends/disables profiles who don't meet strict standards.
You can also do a simple Google search to see if there are any other digital platforms they're on, or to see what others are saying about the business.
RED FLAG TO AVOID:
If they are doing a social media ad but don't have an active social media presence or profile.
2) Professional website:
A legit, reputable business will often have a professional website that shows detailed info about their products or services, including but not limited to product descriptions, pricing, contact information, informative About page, and user-friendly home page with detailed info.
Especially for ecommerce businesses, you also want to make sure they have a clear and detailed Refund & Return policy.
Speaking of contact information, the business should be EASILY reachable — whether clear it's clear info based on need (i.e. general support, refunds or returns, etc), U.S.-based phone numbers (or 1-800 lines), a physical address, or solid contact form. Be wary of businesses that solely rely on a social media account for communication.
RED FLAGS TO AVOID:
If the website looks outdated, poorly designed, or the content has poor English grammar.
If they have no contact info listed or way of getting support.
3) Real customer reviews and testimonials:
Don't rely on reviews shown on the business’s website! Always check 3rd party or independent review sites, such as Google Business Profile, Yelp, Facebook, Angi, etc. or even a simple Google search to find other independent platforms that have real customer reviews.
What's a real customer review look like? They usually provide insights into the quality of the product/service or their overall experience. Sometimes it's hard to tell if a "customer" was paid or obligated to leave a review based on incentive of some kind. For example, some brand new ecommerce brands will send out their products to a limited amount of customers for them to leave a 5-star review in return.
But there are some red flags that are clear indicators of non-legit reviews.
RED FLAGS TO AVOID:
If there are NO reviews on reputable or independent sites for the business' services or products (and you only see reviews on their website).
If the reviews are excessively positive or appear to be fake.
If the reviews are mostly from people's names that appear to be from another country (including reviews in another language).
4) Business registration:
You can do an online search for corporate records, the county clerk’s office for assumed names or sole proprietors, or the state's business taxable entities search page. For example, here is the Texas Tax Entity Search.
RED FLAG TO AVOID:
If you can't find any information on tax records for a business.
5) Payment methods:
Legit ecommerce businesses should have secure payment options, such as credit cards or reputable online payment platforms with buyer protection features. If a business requires you to pay via non-traceable methods, it could be a sign of fraudulent activity.
RED FLAGS TO AVOID:
If they accept cash or check only
If they accept Cash App / Venmo / etc. only
See something suspicious?
If a business seems to be hitting the mark on some of these RED FLAG features mentioned, which may be a sign of illegitimate, fraudulent or illegal activities, report your concerns to consumer protection agencies like the FTC.
Are you an ecommerce business?
It's things like this that a marketing partner like The Digital Perch can help you overcome to ensure your social media and online presence not only looks legit, but also is legit. Contact us today for marketing consulting or ecommerce marketing services, or fill out our form for a quick quote.
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