Online Retailers Use Generative AI to Portray Themselves as Small Businesses

An ABC News visual investigation has identified dozens of online retailers that use generative AI to create images and videos portraying themselves as struggling small businesses or retiring craftsmen. The retailers sell items including clothing, jewelry and lamps while claiming to offer handmade goods or inventory from long-running workshops at discounted prices.

ABC News reported that the sites take advantage of consumer interest in supporting small businesses. One such ad featured a purported craftsman stating he had made 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 and even added a tip. Svehla said he became suspicious when shipping information showed the items came from mainland China, and he was disappointed by the quality upon receipt.

At least three similar sites — George's Caps, Henry's Caps, and Walter's Caps — used comparable pitches about retiring after decades in business. A representative of George's Caps, contacted by ABC News, did not address whether the owner is a real person or if the retirement claims were fabricated.

The representative said the company was aware of poor operators in the space and challenged the assumption that foreign-made goods are automatically inferior. Other sites employed different emotional appeals. One purported New York clothing retailer posted an image of a damaged storefront with shattered glass and police tape to announce a big sale after claimed years of struggle against larger competitors.

Detection tools indicated the image was AI-generated, the store listed no physical address, and the site was later removed. A separate New York lamp company site claimed to be closing after two decades and showed an AI-generated image of a couple selling lamps on a sidewalk.

No trace of the business was found at the listed high-end address.

She noted that such sites can be put up and taken down quickly and often appear on social media platforms where users may make quick purchases. ABC News identified dozens of videos on YouTube and TikTok in which retailers used AI to show fake craftspeople making products.

Expert analysis and detection tools confirmed the videos were AI-generated, and the linked websites connected to generic holding companies or overseas entities. Four nearly identical videos featured different middle-aged men in the same garage setting reciting the same script responding to negative comments about selling resin lamps.

None of the retailers contacted by ABC News, other than the George's Caps representative, responded to requests for comment. Chetty said even experts sometimes struggle to distinguish real from fake content, particularly when users are distracted.

“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.”