Swedish consumer complaints against dropshipping surge amidst fraudulent claims

Between January 1 and July 23, 2023, the Swedish Consumer Agency received 146 complaints against dropshipping companies. By the same time this year, the number surged to 728. The National Board for Consumer Complaints (ARN) also reports a significant increase. “The past year has seen a drastic rise in the number of cases involving dropshipping. We’re talking about several thousand cases,” said Marcus Isgren, ARN’s chairman.

These complaints primarily concern online shops that present themselves as Swedish but engage in dropshipping, which means they do not hold stock or manufacture their goods. Instead, online retailers directly order items from suppliers, often located outside of Europe, who then ship products straight to the customer. While this business model is not illegal, it has attracted many unscrupulous companies.

Often, these businesses craft a professional image on social media, claiming their products are made in Sweden and hand-crafted, sometimes even fabricating stories about the artisans involved. However, the products are frequently sourced directly from factories in China, with profits going to the business owner, according to Emily Dahl, a fashion expert.

Consumers frequently report issues such as delayed deliveries, missing items, or products that do not match their descriptions. Isgren notes that many consumers struggle to contact these companies to process returns or cancellations.

One consumer, Kristina Zengin, shared her experience after ordering two sweaters from an ad on social media, only to receive what she described as “essentially dish rags.” After returning the items, she has yet to receive a refund.

Overall, dropshipping remains a cost-effective method for e-commerce, gaining popularity particularly on platforms like YouTube, where courses teach individuals how to start dropshipping businesses. It is essential for companies targeting Swedish consumers to adhere to local consumer protection laws, including providing accurate return information, which can extend consumer rights to up to a year if not properly communicated.