RWRetailWire
Back to Discussions
DISCUSSION

As AI-Backed Fake Retailers Pollute the Internet, What Are the Solutions?

Written by Nicholas Morine

Fraudulent business practices and the scam artists behind them may be nothing new in the world of commerce, but a new trend brought about by the advance of technology is: AI-created fake retailers and brands are proliferating across the web and social media, often leveraging consumers’ empathy and emotion to rope unsuspecting victims into a purchase.

Facebook and other similar social media platforms are rife with these sorts of fake retail operations, with Meta’s own late 2024 data suggesting that 10% of its total revenue was derived from scam ads (and Wall Street Journal data suggesting, as of mid-2025, that 70% of new ads on Meta platforms either promoted “scams, poor quality products or illicit goods,” per FOX 59).

In a more recent report issued by Forbes contributor Catherine Erdly, the latest iteration of dishonest retail practices spreading across the internet are so-called “ghost stores,” or e-comm businesses which use AI-created imagery, reviews, testimonials, and websites to misrepresent themselves as small businesses, often local. Erdly set the scene:

“Ready to focus on their new roles as grandparents, a couple shared a heartfelt message with customers as they close their boutique doors with one final sale: ‘It’s with a heavy heart that we share this message with you. After years of love and care poured into this little shop, it’s time for us to close,'” she began.

“At first glance, everything looks genuine. The emotional farewell. The photo of the owners. But on second glance, things don’t add up. Despite the title referencing a local town, the shipping details note that orders are dispatched from their warehouse in Central Asia. A closer look at the photo suggests the smoothness and uniformity of an AI-generated image,” she added.

Fake Retail Scams Powered by AI on Social Media: A Problem Beyond Enforcement?

Other stats and leading perspectives pulled from Erdly’s report:

  • Retailers and shoppers are involved in a “trust recession”: Data from Bazaarvoice indicates that ~97% of shoppers now check multiple sources before purchasing, with 60% needing between 2-3 sources before being satisfied and 37% requiring four or more.
  • Prevalent or pervasive may be too weak of words to describe the scale: Chris Emmins of KwikChex suggested that such scams are “part of the world we live in now. [They are] absolutely everywhere.” Further, the technological environment — a combination of easy and free AI tools and some shoppers lacking advanced experience in detecting the use thereof — leads to exacerbation of these schemes and their impacts. “It’s just so darned easy and cheap to do these things. They now have AI on their side, which means that a website can go up within an hour,” Emmins said.
  • Enforcement is difficult, if it’s possible at all: Curtailing ghost stores or AI-driven retail scams via legal means may be off the table, according to Emmins, who suggests that enforcement is similar to playing “a never-ending game of whack-a-mole.” “The scale is just too large. You have problems with jurisdiction because so many of these stores are based in China, and there are all sorts of issues like that as well,” he added.

This sort of disingenuous play on empathy or other emotions to drum up sales is a common tactic across the board, as ABC News reported.

“ABC News has identified dozens of videos on platforms like YouTube and TikTok where retailers used AI to generate videos showing fake craftspeople making their products. Expert analysis — paired with online detection tools — confirmed they were created with AI technology, and their websites were linked to generic holding companies or companies oversees,” the outlet wrote.

“Many of the videos prey on customers’ emotions by showing interactions that try to create sympathy by showing creators being picked on in public,” ABC News added.

Discussion Thread0