Let's say I told you that I had an amazing dropshipping strategy to turn you into a millionaire in a year or two. All you had to do was send me a couple thousand bucks to learn my trade secrets. You send the money and I send you a message that says get to work tonight and do it every day. I quote you week by week.
Well, technically it doesn't look like a scam, but that's how dropshipping scams work, at least the most deceptive ones. And more. Somehow I can take something very complicated and make it simple and keep stringing you along for the ride until you lose out all your money and you get just enough results to get convinced that I am not scamming you but it's taking a bit of work on your end.
Do you understand how the typical dropshipping scam works? Well this is just the start. If you are curious about how these real dropshipping scams work, keep reading. We will tell you everything you want to know in this guide.
The Top Dropshipping Scams You Should Know (And How They Work!)
Keep an eye out for these scams and understand how they work. This info can save you from a lot of trouble.
1. The “Not Knowing Hidden Fees” Scam
This one comes from the wholesaler's end and it may not be so obvious. When you read the fine print and go through all the terms and conditions, you may miss them. Some additional charges, such as service charges and processing fees, may be vague and not be so obvious.
Even though these terms are mentioned, they don't go into the details of how much exactly you would have to pay up when issues do arise. So after when you place an order with your dropshipping supplier, you may experience hidden fees and have to handle things.
2. Unlicensed Products and Chargeback Scams
Unlicensed goods can look like a shortcut to higher profit margins—until the trouble hits. Some suppliers sell replicas or branded items without proper authorization. The issue doesn’t come up until the products arrive, and customers start complaining. Some will report it to the payment provider or platform. Others may file chargebacks, and if enough of those pile up, you’re flagged or banned.
Chargebacks are often used by buyers who claim they didn’t receive their item or received something significantly different. If you can’t produce airtight tracking proof, your account takes the hit. A few disputed transactions won’t just cost you money—they can block your access to processors like PayPal or Stripe entirely. Some buyers know this and exploit it, deliberately triggering chargebacks after receiving the product.
To protect yourself, skip suppliers who can’t provide documentation for branded items. If they won’t share proof of licensing, they aren’t legitimate. Avoid any supplier offering designer watches, perfumes, electronics, or luxury apparel at extremely low rates. There’s a strong chance those goods are unauthorized. Stick with original items or private-label products when you can verify their origin.
You should also log every transaction and use shipment methods that provide traceable tracking. While no method will stop a scammer from trying to exploit chargebacks, the better your records, the better your chances of winning those disputes.
3. Out of Stock Scam
This scam tends to catch new sellers off guard. You find a supplier, import their product listings, and go live with your store. Everything looks good until a customer places an order and you try to fulfill it—only to find out the item isn’t available. Sometimes the supplier delays telling you. Other times, they never inform you at all. Meanwhile, your customer waits longer than expected, starts sending you emails, and eventually demands a refund.
These situations lead to lost time and lost trust. Even if you issue a refund promptly, your store reputation can suffer. One or two delays might be forgiven, but if they happen often, you risk complaints and disputes. You also might have to refund out of your own pocket while your payment processor investigates.
Some dishonest suppliers use the out-of-stock excuse as a stalling tactic. They may continue accepting orders and hold your funds longer before eventually returning the money or trying to offer a substitute product you didn’t agree to list. In either case, it’s your business that suffers—not theirs.
To guard against this, test every new supplier with small orders before trusting them with high volumes. Use order tracking software if available, and avoid listing every product from a supplier’s catalog unless you’ve confirmed stock levels directly. It’s better to manage a smaller, reliable inventory than to chase quantity and get burned by delays or deception.
4. Customer Data Theft Scam
Some dropshipping scams don’t target you directly—they target your customers. In these cases, shady suppliers collect personal data like names, addresses, emails, and even phone numbers. What happens next isn’t pretty. That data might be resold, misused, or used for phishing campaigns. The fallout lands on your business because you’re the one who passed it to them.
Some platforms may appear legitimate at first. They have a slick website and chat support. They respond quickly—until they’ve harvested enough data. Then they disappear, or worse, keep operating while abusing your customer info in the background. It’s only when customers begin receiving strange emails or their details end up elsewhere that the red flags become visible.
If you’ve given a supplier direct access to your store via API or app integrations, the risk becomes even higher. Some unauthorized tools extract more data than they need and pass it to third parties. If you don’t audit your apps and permissions regularly, you might not know until the damage is done.
You should always read privacy policies and terms of service—even when they’re boring. Look for signs of data-sharing clauses. Limit the supplier’s access to only what they need to fulfill an order. Any app or plugin that requires more access than necessary is suspect. Protecting your customers’ data protects your store’s long-term reputation.
5. Receiving a Different Order Scam
This one plays out like a cruel trick on both you and your customer. The buyer orders a black hoodie in size large. What shows up? A neon pink t-shirt marked “extra small.” It sounds ridiculous, but it happens more often than you'd expect. Some suppliers pull bait-and-switch tactics, sending cheaper goods to cut costs or mask their low-quality inventory. When the customer complains, the supplier blames a warehouse mix-up or denies fault altogether.
You’re left in the middle, trying to make it right. You issue a refund or resend the item, but either way, your profit margin disappears. The trust you worked to build with that customer? Gone. Worse, they might leave a public review detailing what happened, discouraging future buyers.
Some suppliers rely on sellers being too overwhelmed or new to argue. Others send incorrect items as a tactic to avoid returns. When the return process is slow, buyers give up, and the scammer keeps the money. The impact on your store can stretch far beyond one transaction.
To avoid this trap, test the supplier with a few trial orders under different names and addresses. Keep photo records of what arrives. If the items don’t match the product listing, stop working with that source. You can’t build a serious business on unreliable fulfillment.
How to Avoid Dropshipping Scams (10 Ways)
Here are 10 ways to avoid most dropshipping scams:
Tip 1: Research Every Supplier Before Listing Products
Before working with any supplier, research their background. Search for reviews from real store owners. Use online communities and forums where other sellers talk about their experiences. A legitimate supplier will have a visible track record. Scammers often operate under different names, so check for duplicate websites or addresses. Don’t rely only on fancy branding or professional-looking templates. You should always look deeper. Check the Alidrop marketplace to find the best deals.
Tip 2: Never Pay for Access or “Exclusive” Membership
Some sites ask for payment just to access their supplier list or catalog. Legitimate wholesalers won’t charge upfront fees. If someone demands money before you’ve seen a product list or prices, treat that as a red flag. Scammers use urgency tactics to pressure you. Step back. Any real vendor should be willing to show what they offer before asking you to invest. You’re not buying a lottery ticket—you’re building a business.
Tip 3: Test Orders Are Your Friend
Before adding a product to your store, place a test order. Send it to yourself or a friend. Examine the packaging, shipping time, and product quality. If something looks off, don’t list it. One test order can save you from dozens of customer complaints later. It’s also a good way to check if your supplier is reliable or just pretending. You will want proof before trusting them with your customers.
Tip 4: Watch for Fake Tracking Numbers
Some bad suppliers send fake tracking numbers to make it look like they’ve fulfilled an order. These codes might point to unrelated deliveries or inactive entries. When a customer asks why their package isn’t moving, you’re stuck. Use track-and-confirm services, and check every tracking code before marking an item as shipped. If a pattern shows up, stop working with that supplier immediately.
Tip 5: Keep All Communications in Writing
Phone calls and live chats may seem fast, but they don’t leave a trail. You should keep all business conversations in writing—emails, chat logs, platform messages. If an issue comes up later, written proof is your best friend. It helps you deal with disputes, chargebacks, and platform complaints. Scammers don’t like leaving records. Real suppliers don’t mind answering your questions in writing.
Tip 6: Avoid Product Categories That Attract Fraud
Some categories are riskier than others. Electronics, luxury fashion, supplements, and brand-name goods often come with higher fraud rates. Buyers expect a lot from these items, and scammers target them because of their resale value. If you're just starting out, consider avoiding high-risk niches. Focus instead on everyday items with simpler logistics and fewer chargeback issues.
Tip 7: Don’t Blindly Trust Product Photos
A slick photo doesn’t mean the real item looks the same. Many scammers steal images from other sellers or use stock photography that doesn't match what they ship. If a supplier sends you sample photos, ask if they took the images themselves. Do a reverse image search. If you find the same photo on multiple sites, be cautious. Photos should match the actual product.
Tip 8: Audit Every App You Install
Many store owners use third-party apps to handle orders and sync with suppliers. These apps often ask for permissions. Check what data they access. Remove any tool that asks for more than it needs. Some shady apps will collect your customer info or modify listings without your knowledge. You will need to control who touches your data and why.
Tip 9: Track Refund Patterns
If one supplier constantly triggers refunds, something’s wrong. They might be misrepresenting shipping times, sending low-quality items, or just failing to fulfill properly. Track every return or complaint, and look for patterns by product or source. Drop the worst performers quickly. Your store’s reputation depends on delivering what you promise. There’s no room for repeat offenders.
Tip 10: Use Secure Payment Channels
Always pay suppliers through secure, traceable methods. Avoid wire transfers or untraceable crypto deals. Use credit cards, PayPal (in business mode), or escrow services when available. That way, if something goes wrong, you have a way to dispute the charge. Scam suppliers will often push for off-platform deals. Don’t fall for it. If they can’t do business transparently, they’re not worth your time.
Conclusion
Dropshipping opens doors for new businesses, but it also attracts dishonest actors looking to take advantage. Scams come in many forms—from bogus suppliers and fake products to theft of customer data. Each scam brings different risks, but most can be avoided with due diligence. Take time to verify every supplier, double-check shipping claims, and protect your customer data. Mistakes are costly, not just in money but in reputation. A cautious approach wins in the long run. Build your store on real products, trustworthy vendors, and solid practices, and you'll reduce the risks that sink so many first-time sellers.
Avoid Dropshipping Scams FAQs
What’s the safest way to find a real supplier?
You should use sourcing platforms with verified vendor lists and avoid anyone who asks for upfront fees. Start by reading user reviews from independent forums. Always place a small test order before committing. If a supplier is unwilling to answer questions or refuses to provide business information, walk away. A real supplier will be transparent from the start.
How do I handle chargebacks in dropshipping?
Keep detailed records for every transaction. Save screenshots, receipts, and tracking numbers. Use trackable shipping services and upload proof of delivery as soon as possible. If a buyer claims non-delivery, you’ll need to show that the item was sent to the correct address. Too many chargebacks will affect your standing with payment processors, so avoid risky suppliers from the beginning.
Can I protect customer data from supplier abuse?
Yes. Never give unnecessary access to supplier tools or apps. Limit what data is shared—only pass along what’s needed for fulfillment. Read app permissions carefully before installation. Regularly audit any platform integrations. If anything seems suspicious or excessive in its access level, remove it immediately. Protecting your customer’s privacy is also protecting your own business from long-term damage.
Are all dropshipping suppliers risky?
No, but some are. There are many reputable suppliers with long histories and clear policies. The trouble comes when new sellers trust random websites or middlemen without checking backgrounds. Always verify licensing, check order quality through test purchases, and avoid deals that seem too convenient. Good suppliers communicate clearly and care about long-term partnerships—not just one-time orders.
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