Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of Technology
The offer pops up in your social media feed. The website is professional and the imagery illustrates an Australian coastal region, or chic inner-CBD scene.
The brand name indicates this exclusive fashion retailer is based in Melbourne, Sydney, Adelaide, or an exclusive enclave such as Double Bay or Byron Bay.
The businesses have history, having apparently been “established” 30–40 years ago, and a story. The owners have reluctantly decided to close or relocate, resulting in significant discounts.
However, behind the illusion of prestige and luxury, is cheap, poorly manufactured clothing from Chinese factories.
The recent growth of these online “ghost stores” has led the Australian Consumer and Competition Commission to issue public warning notices about four websites.
Everly-melbourne.com, willowandgrace-adelaide.com, sophie-claire.com and doublebayboutique.com are the four named.
A new type of scam
The ACCC’s Targeting Scams report estimated Australians lost A$2.74 billion in 2023. Most losses were from investment scams ($1.3 billion), remote access scams ($256 million), and romance scams ($201.1 million).
Read more: 3.5 million Australians experienced fraud last year. This could be avoided through 6 simple steps
However, online ghost store scams are so new, researchers and government agencies have not yet had time to measure the financial impact these businesses are having on consumers or legitimate fashion businesses.
It is possible a consumer, once stung by a ghost store scam, will be less likely to shop with a legitimate online fashion retailer.
This type of emerging scam was touched on in a 2015 report called Framework for a Taxonomy of Fraud. The report noted there were businesses selling “worthless or non-existent products”. Their sites made:
misleading claims about products that are exaggerated, undervalued, or non-existent.
Since the beginning of 2025, the ACCC reports it has received at least 360 complaints about 60 online ghost retailers. It says many more may be operating across several social media sites.
Tricky tactics
Ghost stores use a variety of tactics to attract unsuspecting customers.
Price: Customers regularly assume higher prices mean higher quality. Most customers seeing a “leather” jacket for $19.74 on Temu would expect low quality. However, a silk maxi-dress from Everly Melbourne reduced from $209.95 to $82.95 – a 60% saving – seems reasonable and reflective of normal mid-season clearance pricing. That fact it’s still priced at more than $80 also implies good quality.
Cosmopolitan localism: Researchers have reported that so-called cosmopolitan localism fosters meaningful consumer relationships with brands. Consumers are more likely to trust a business based in Melbourne or Byron Bay over one based internationally.
Adding images of a physical store front creates credibility and “realness”. Customers feel confident to buy from a little business based in Melbourne, Sydney or somewhere well known to them.
Storytelling: Storytelling can influence shoppers’ emotions and affect purchasing. It helps stimulate deeper emotional connections to a brand. Ghost stores will regularly create a narrative around “going out of business” to justify price discounts and pull on heart-strings.
Layout: A professionally developed website, with high-quality images, detailed product information, online payment methods and order tracking, creates the illusion of authenticity. Researchers have found luxury brand website designs can create a strong sense of luxury. This increases a willingness to buy.
How to spot a “ghost”
When the post indicates “closing today” or “closing down sale ends tonight”, it is very easy to impulsively jump in to take advantage of the savings. However, before you click, check for these red flags:
The website does not provide a contact phone number or physical address for the store. There might just be an email address or web form. Simply entering the suspected store into google maps will indicate no physical location.
The website domain is “.com” rather than “.com.au”. This indicates the store is not an Australian-based business.
Is the business registered? ABN Lookup is the free public view of the Australian Business Register – a quick search will identify that the Double Bay designer isn’t registered locally.
Review platforms, including Trustpilot, often have negative reviews for the business, whereas the business’ website only features very positive reviews.
The images of products or even the owner may be AI generated. For example, Harry – Melbourne, is apparently an artisan watchmaker. However, simply right-clicking on the image reveals Harry is an AI-generated image.
A cautionary note
Online shopping is risky. You can’t physically touch or interact with the product to determine its quality. Three types of risks are common when shopping online. These are performance risk (it doesn’t work, doesn’t fit well, or the quality is poor), financial risk (losing your money on a poor-quality product), and time-loss risk (refund processing takes weeks).
As such, customers must trust the online retailer to act honestly and describe products accurately. When trust is breached, consumers will naturally become cautious even about legitimate online retailers.
As ghost stores scams increasingly populate social media feeds, unsuspecting consumers will continue to get caught out. This will leave legitimate retailers exposed to scepticism and mistrust.
Gary Mortimer receives funding from the Building Employer Confidence and Inclusion in Disability Grant, AusIndustry Entrepreneurs' Program, National Clothing Textiles Stewardship Scheme, National Retail Association and Australian Retailers Association.
