Warning to people who buy and sell used goods online

Online second-hand stores have been identified as a major contributor to South Africa’s e-commerce industry. However, this trend has also given rise to numerous scams posing as legitimate businesses.

This is according to Realm Digital’s head of business consulting, Imtiyaz Mohamed, who told Newzroom Africa that because online thrifting has taken off in South Africa, shoppers must be on the lookout for scams.

“There are a lot of scams coming up where people are mimicking specific sites,” Mohamed said.

“When you are looking to buy something from one of these websites, just make sure it is legitimate. You can do so by checking the URL or looking for online reviews.”

He points out that while these sites remain a threat, online shopping is becoming more secure thanks to virtual card options.

This is because the threat that fraudulent sites pose to online shoppers is not taking money to the value of the purchase but harvesting their banking details when they attempt to make the payment.

Once the scammers have access to this information, they can make multiple purchases using the victim’s card, as they have direct access to their account.

However, a virtual card requires users to load money onto the card, so if the information does land in the wrong hands, the victim can only lose as much as has been loaded.

While falling victim to online scams may have acquired the stigma that it only happens to those acting out of stupidity, Brian Pinnock, VP of sales engineering at Mimecast South Africa, said this is false.

“If you do fall for a scam, it’s got nothing to do with stupidity. It actually has to do with how our brains work,” Pinnock said.

“Unfortunately, retailers exploit the same part of your brain as fraudsters do.”

Pinnock explained that this is the impulsive part of the brain that thinks very quickly and is very intuitive, causing people to act on a decision without giving it much thought.

Millions in online second-hand clothes sales

Due to the ever-increasing price of clothes, many South Africans have turned to the second-hand clothing market to go shopping and flip old garments into cash.

One online platform that has enabled South Africans to do this is Yaga, which says that it has helped sellers generate close to R500 million in revenue.

Since its launch in 2020, it has facilitated the sale of over 1.5 million garments between its roughly 800,000 buyers and sellers.

And the market is only getting bigger. According to ThredUp’s 2024 Resale Report, the global second-hand clothes market will be worth over R6 trillion by 2028. As of 2023, it was valued at just over R3.5 trillion.

Realm Digital CEO Simon Bestbier says that a change in consumer demands is driving the industry’s appeal.

The report also notes that the market grew 15 times faster than the broader retail market and that two in five apparel items purchased in 2023 were second-hand.

“Second-hand fashion is going mainstream, driven by sustainability-conscious consumers and the affordability of pre-loved items,” he said in a blog post.

“However, sustainability can be challenging for smaller businesses due to cost constraints.”

According to Yaga, people only tend to wear 20% to 30% of their entire wardrobe, resulting in a lot of waste — not only in unused clothes but also in the opportunity cost of not selling them.

ThredUp found that two-thirds of people who sold second-hand clothes in 2023 did so to make extra money, and just under half used the money to cover essential costs.