According to the Federal Trade Commission (FTC), online shopping scams were the second-most common type of fraud reported in 2024.

During the holidays, people rush to make many quick purchases. As a result, their chances of falling for an online shopping scam tend to increase. And that can put a damper on your holiday budget, to say the least.

The FBI warns that the following four scams are most common — here’s what to look out for and how to avoid them:

1. Nondelivery scams

With nondelivery scams, the victim pays for a product online but then never receives the order. These scams often begin with a fraudster setting up a fake online store. They list products for sale that don’t exist. The prices are often significantly lower than those offered by real retailers.

As the buyer, you might get hooked by ads that seem legitimate. You could be duped by logos and web addresses that replicate the real thing from a retailer you already know. Earlier this year, many people saw fake ads for JOANN’s bankruptcy sales. They fell for them because they believed the chain was going out of business.

Nondelivery scams cost you money. They also put you at risk of a fraudster using your payment information for their own purchases. Plus, some scammers will use your login credentials to try to access your other online accounts.

2. Gift card fraud

One of the biggest tip-offs for fraud is the method of payment being requested. If the vendor only accepts gift cards or other prepaid cards, they’re likely attempting gift card fraud.

Why gift cards? Unlike debit or credit cards, there’s no way to trace the recipient of a gift card. You cannot reverse the payment after the transaction has been made. Of course, gift cards aren’t the only untraceable form of payment — if a seller or vendor requests any of the following, that’s your sign to take your business elsewhere:

• Gift cards
• Prepaid cards
• Cryptocurrency
• Money orders
• Wire transfers

3. Auction fraud

Auction fraud is the act of misrepresenting or failing to deliver items that are sold at auction. Online auction fraud can occur in several ways. You might get drawn in by a fake ad for property that’s been seized by the government. Alternatively, you might click on a livestream where someone claims they’re auctioning off valuable items.

With auction fraud, the seller always misleads you about the details of the sale. For example, they might exclusively post photos that are copied from another website. This can be done to hide product damage. They might also sell counterfeits or pretend they own the item.

In addition to the risk of getting defrauded, online auctions put you at risk of overpaying. The excitement and fast pace of bidding can influence buyers. They may drive up the price of goods without even being able to inspect the property. Additionally, buyers who fail to conduct thorough research up front may incur unexpected fees, such as international shipping charges.

4. Nonpayment scams

Another common online shopping scam involves buyers targeting sellers. With nonpayment scams, the buyer will collect the seller’s goods or services and then refuse to send payment.

To perform this scam, the buyer typically asks you to complete the transaction offline. Then, they might give an excuse for not showing up in person. For example, they might claim they’re a service member who’s been stationed overseas. To complete the transaction, the buyer may ask you to put the product in a P.O. box or hand it over to their family member, claiming that payment is on the way.