AG and BBB warn of drop-shipping before holidays; here's what it is

Posted at 11:17 AM, Nov 25, 2019
and last updated 2019-11-25 15:14:36-05

LANSING, Mich. (WXYZ) — The Michigan Attorney General's Office and the Better Business Bureau are warning Michiganders of drop-shipping scams ahead of the holiday season.

If you're not sure what that is, drop-shipping is a where self-proclaimed entrepreneurs skim off the top of holiday must-haves and other goods throughout the year.

They then set up websites to sell products they don't keep in stock and send orders placed through those sites to third parties to fulfill and ship the product directly to the customer – all while marking up prices up to $50 or more.

“As we approach the holiday season, it is imperative we arm Michigan consumers with the information they need to shop wisely and avoid being victims of holiday scams,” Nessel said. “While not always illegal, drop-shipping is a tactic that can increase the out-the-door price for consumers who could have purchased products cheaper elsewhere.”

The AG's office and the BBB said these are ways that people can protect themselves from the year-round scheme.

  • Research the product and the seller of the product you want to purchase before you buy it;
  • Complete an online image search of the product and other images the seller has posted to their site to see where the product is coming from, how much it really costs, and who else is selling it; and
  • Compare prices for the same or similar products from other sellers.

"The Better Business Bureau wants people to be informed consumers,” said BBB CEOs serving Eastern and Western Michigan Melanie Duquesnel and Phil Catlett. "The BBB receives a number of complaints every year from customers who didn't know the website they purchased from involved drop-shipping. Complaints include customers who never receive the item ordered or, if it is received, it comes much later than expected. Often consumers receive their product several months after it was anticipated to arrive. When done transparently, drop-shipping can connect consumers with products they may have otherwise overlooked. However, many drop-shipping websites misrepresent the real price of the item and delivery times, leaving gift givers with nothing but an empty promise on Christmas morning."