Scam or No Scam? Examining Common Work-at-Home Schemes

For the following six common work-at-home opportunities, this is not as straightforward a question as you might think. I would love to be able to say: ”No scams here, folks. Dive right in.” or “Always avoid these scams!” But, of course, it’s not that simple. There's a fine line between a scam and a bad moneymaking opportunity, but we all want to avoid both.

Read on to find out which of the six are real WAH jobs and how you can tell if you’re being scammed.

Data Entry

Woman doing data entry at home with her dog in her lap.

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There are definitely legitimate online data entry jobs. However, there really aren’t very many online data entry jobs that actually pay decently, and this is an industry that has been rife with scams. You really have to do your homework.

One problem is the way data entry jobs pay. Even jobs that aren’t scams, per se, are really not good ways to make money. Typically these jobs pay based on your output, or on a per-piece basis, but it can be very hard to tell upfront how much time the data entry will take.

And some of these jobs are definitely scams. They aren’t very different from many typical work at home scams, such as pyramid schemes, fake classes, and certifications or payment for resources available for free online.

Mystery Shopping

Woman mystery shopping in a mall

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While I would say mystery shopping falls into the “no scam” category, I would only place it there with a couple of caveats: Don’t ever pay for opportunities to mystery shop and/or cash checks, wire money, etc. You should not need to pay for lists of companies seeking mystery shoppers or for application fees or anything. And never ever cash a check or wire money for anyone. Fake check scams are very common. They take all sorts of forms and mystery shopping is just one of many.

Micro Jobs or Short Tasks

Woman sitting on couch with laptop doing micro jobs.

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Micro jobs or short tasks can be quick ways to earn some cash. However, whether or not a micro job is a scam really depends on who is offering the job. And when I say "who" I don't mean the website where the job is listed (though some are far more likely to contain scams and others), I mean the person or organization contracting individuals for these small jobs for small pay. The anonymity of these websites makes them a good venue for scammers.

The concept behind these online gigs--as they are often called--is rather new, and the definition is loose. For the most part, it is defined as a small task that earns a small fee. On most online micro job sites the poster of the job can reject the work and not pay for any reason; however, the protection for the worker is found in a rating system for posters in which workers can post feedback. A site that does not have a robust rating system for its posters and workers is more likely to be rife with scams.

In addition to the possibility of these being outright scams, you may find that they are just not a good way to make money because the pay is too small. Another potential pitfall of these gigs is that it usually takes a certain amount of earnings before some companies pay out, and so you may lose interest and never collect that money earned.

Affiliate Marketing

Computer keyboard with a green dollar sign button representing affiliate marketing.

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Affiliate marketing is a perfectly legit work-at-home business; however, any opportunity that tries to sell you an “affiliate marketing business” is likely a scam.

First let’s go over exactly what affiliate marketing is: Affiliate marketing is selling products or services by hosting links or banners on a website or blog, for which you are paid a commission for each sale resulting from clicks on those links. In order to get clicks on those links and subsequently sales, you must have traffic to the website. And so, the real business here is the website, which might generate revenue from other means such as advertising, as well.

No one can sell you a ready-made affiliate marketing business because a website that generates sufficient traffic is not ready-made. Most likely they are selling you useless information that could be had for free elsewhere.

Multilevel Marketing or Direct Sales

Women drinking wine together at a direct sales event in a home.

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This is a tricky one in that multi-level marketing (MLM) taken to an extreme is essentially a pyramid scam.

However, MLM is also the same form of business used in direct selling, which is not necessarily a scam at all. Legitimate companies, like Avon and Mary Kay, use multi-level marketing. Other less reputable direct sales companies sell questionable products, focus too much on recruitment or demand to large an initial investment, making them essentially pyramid schemes. You need to do a lot of research before you invest time and money into multi-level marketing.

Envelope Stuffing or Home Assembly

Woman licking an envelope.

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Yup, these two are always a scam. Avoid envelope stuffing, craft assembly and the like. Think about it, mailing work to be stuffed or assembled is just not cost-effective, especially since machines can do this.

Typically the way these work is that you pay for an opportunity but when you complete your work, no matter how careful you are, it is rejected for quality reasons.