Pallet liquidation scams target people looking to purchase pallets of supposedly discounted merchandise, often from major retailers like Amazon.

Groups that engage in pallet liquidation sales are rampant on social media and it’s hard to discern the scammers from the legitimate ones (to be honest, I’ve always thought they were all scams, until someone told me there are legitimate ones), let alone the grey area in between.

The scams are based on the fact that many products are returned and can not be sold again for various reasons. But companies also offer overstock and out-of-season apparel for sale. Most of these companies have the first buyers sign non-disclosure agreements (NDAs) so when you scroll through different legitimate liquidation websites and marketplaces the origin of the pallet is almost never stated.

Depending on the reason of sale and the origin, the pallets may include a large quantity of one product or a mix of products, such as overstock or discontinued items, customer returns, or refurbished goods.

Given that the pallet liquidation market is a billion-dollar industry, it inevitably attracts scammers seeking to grab a piece of the action without putting in the work or risk.

In social media groups that specialize in pallet liquidation, you’ll find advertisements that promise valuable merchandise at significantly discounted prices, such as electronics, tools, or other high-demand items.

You’ll also see sponsored ads on social media about pallet sales (note: these are almost always fake).

The risk of not receiving what you have paid for is an obvious one, but some of these scammers will go the extra mile and set up fake websites where they will try and harvest payment details.

How to steer clear of pallet liquidation scams

If you’re really looking to try your luck at this, there are a few tips that can help you get your money’s worth.

The first thing to keep in mind is the higher up you are in the chain, the better your chances of making a profit are. It usually also means buying large quantities (I’m talking about truckloads) and larger investments. And most sellers do not have a return policy. I realize the large shipments are not for everyone, so here are some things to remember:

Red flags:

Unbelievable prices. The people you’re buying from are not stupid. If they are offering goods for unbelievable prices, don’t take their word for it.

Payment methods. Sellers who insist on payment methods that do not offer buyer protection are likely scammers.

Lack of manifest. Sellers that are unwilling to disclose any information about the content of a pallet shouldn’t be trusted. There is definitely a higher risk of damaged items.

Time pressure. Slogans like “Act now!” or “Only 3 left” are often used to create a false sense of urgency, hoping victims will purchase without applying the research below.

Research the seller:

Find contact information and check the validity. Legitimate liquidation sites provide clear and easily accessible contact details, including physical address, phone number, and email address. Be wary of sites that lack this information or provide vague or unreliable contact details.

Verify the physical address of the liquidation site through online maps or directories. A legitimate company is more likely to have a verifiable physical presence. After all, you can hardly receive these pallets in a PO box.

For a website you can use online tools to find the domain age and registration. Legitimate domains have a longer history so they are easier to research. New domains should be regarded as suspicious, since scammers have the habit of moving on to the next domain leaving bad reviews behind.

Check if the website is listed on the Better Business Bureau (BBB) website and review their rating and any associated complaints. It also allows you to check how long they’ve been in business.

Do an online search for the name of the company and combine it with terms like “scam” or “complaint” to help you find problems others may have run into in dealing with this company.

Don’t trust sponsored ads. We have heard of scammers that can afford to pay millions to advertise on Meta, Google, and other platforms and still make a handsome profit.

Use web protection like Malwarebytes Browser Guard. It flags malicious websites and credit card skimmers that steal your information.

Too late?

If you suspect that your payment card details have been stolen, these are the recommended actions:

• Regularly check account and card statements and notify your bank about any suspicious activity.
• Where possible, set up fraud alerts with your bank or payment card provider.
• Change the password and enable multi-factor authentication if you haven’t already.
• Freeze your credit so nobody can open any new accounts in your name.

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