Online Retailers Use Generative AI to Portray Themselves as Small Businesses

An ABC News visual investigation published on May 8, 2026 found that scores of online retailers are using generative AI to create images and videos portraying themselves as mom-and-pop stores or retiring craftsmen. The retailers sell items including clothing, jewelry and lamps while charging premium prices for products that are often lower quality and shipped from overseas, the investigation reported.

The sites take advantage of consumer interest in supporting small businesses by presenting narratives about financial hardship or impending closure. One advertisement featured a purported craftsman stating he had been making flat caps by hand since 1973 and needed to sell remaining inventory before closing his workshop.

Denny Svehla, a musician from Rockford, Illinois, purchased a cap after seeing the ad but later received items shipped from mainland China that he described as lower quality than advertised. Svehla told ABC News he felt the story was personal because he and his wife also run a small business.

"I'm sitting there thinking I'm trying to help someone," Svehla said. "He's going to end up going out of business after 52 years. " ABC News identified at least three similar hat-selling sites using comparable retirement narratives: George's Caps, Henry's Caps and Walter's Caps.

A representative of George's Caps did not address questions about whether the owner is a real person or if the retirement claims are accurate. The representative stated that the company maintains quality standards and challenged the assumption that foreign-made goods are automatically inferior.

Other sites have used AI-generated images of damaged storefronts or closing businesses to appeal to sympathy. One purported New York clothing retailer posted an image of a shattered storefront with police tape, claiming the business had been destroyed and could no longer compete with larger companies.

Online detection tools indicated the image was AI-generated, and the site did not list a physical address in New York. A lamp retailer called Aluné claimed to be closing a New York boutique after two decades and offered large discounts on remaining inventory.

The site showed an AI-generated image of a couple displaying lamps on a sidewalk. When ABC News visited the listed address on a high-end Manhattan street between Chanel and Versace retailers, no trace of the company was found. The site has since been taken down.

Marshini Chetty, an associate professor of computer science at the University of Chicago, said advances in AI technology allow for rapid creation of realistic media including photos, videos, reviews and testimonials. "You can use AI to create very realistic media, right?

So you can take and create photos of people who look like someone who might be making handmade goods," Chetty said. Chetty noted that such sites can be created and removed quickly, thriving on social media platforms where users may make rapid purchase decisions.

ABC News identified dozens of AI-generated videos on YouTube and TikTok showing fake craftspeople making products, with websites linked to generic holding companies or overseas entities. Four nearly identical videos used the same script and background to sell resin lamps while mimicking responses to negative comments.

Experts said these operations often disappear or switch products before customers can leave substantial reviews or complaints. None of the retailers contacted by ABC News except George's Caps responded to requests for comment.

The investigation found that AI tools have made it easier to produce convincing content at scale. Detection tools and expert analysis confirmed that many of the images, videos and websites relied on artificial intelligence. Chetty said even experts sometimes struggle to distinguish real from fake content when distracted.

Many of the advertisements seek to create emotional connections by showing creators facing hardship or negative comments. Svehla's experience of receiving an unexpected shipping origin and lower-quality product reflects complaints reported in the investigation. The sites frequently avoid providing verifiable physical addresses or owner information.