December 17th 2024.
Meet Rachael Donnellan, a savvy entrepreneur who has been using her own wardrobe to make some extra cash since 2016. But unfortunately, her income recently took a hit when she fell victim to a scam that cost her $200 a week.
Rachael is just one of many Australians who have turned to side hustles to supplement their income during these tough times of rising living costs. In fact, a recent study by Fiverr revealed that nearly 70% of employed Australians are either considering or already engaged in side hustles. And contrary to popular belief, it's not just young people getting in on the action. The study found that almost half of those aged over 55 are also actively participating in side hustles, compared to 81% of 16 to 24-year-olds.
A separate survey by Small Business Loans Australia showed that 55% of Aussies hope to start a side hustle or small business in the next five years, with the goal of boosting their income. This was precisely what inspired Rachael to start her own clothing hire business, Hire Melbourne, which she co-owns. With over 150 outfits available for hire at affordable prices ranging from $25 to $200, Hire Melbourne has become a significant source of income for Rachael.
However, her income took a major hit when a recent customer stole a vintage Herve Leger gown worth $2000. "The loss of income was the biggest hit for me, as the dress was being rented out almost every week at $200," Rachael shared with 9news.com.au. Unfortunately, this kind of scam is not uncommon in the dress hire business, where customers often contact the owners through social media. In this particular case, the customer reached out to Rachael via Instagram, providing a fake phone number and paying a hire fee and security bond to secure the dress. But when the customer stopped responding and the dress was never returned, Rachael knew something was wrong.
She tried to track down the customer through Facebook, only to find out that the ID they had provided was actually stolen. The person whose ID it belonged to had even reported it to the police. In the end, Rachael had to cancel weeks of bookings for the stolen dress, resulting in a significant loss of income. She chose not to report the theft to the police, as she knew from experience that it's rare for lenders to get their stolen items back. This is a reality that Nicole Shiraz, another dress rental business owner, knows all too well.
Nicole had a dress worth $1600 stolen from her earlier this year. The customer had contacted her through Instagram, paid the hire fee and bond upfront, and then disappeared without returning the dress. "We take ID as well, but when you're so used to trusting everyone, you don't think twice about it," Nicole shared with 9news. Like Rachael, Nicole realized that she had been scammed when the customer suddenly stopped responding to messages and even removed their ID photo from the chat history. She reported the theft to the police in both New South Wales and Western Australia, but unfortunately, the dress was never recovered. This resulted in Nicole losing out on thousands of dollars of income.
Both Rachael and Nicole believe that these types of scams, where customers use fake details to rent items and then refuse to return them, have become more common in recent years. This unfortunate reality inspired Nicole to launch Air Closet, an app that allows Australians to lend and hire clothes, with built-in insurance of up to $5000 for theft or damage. "I'm trying to build trust in the community and create a more sustainable fashion economy where we can share our wardrobes safely," Nicole explained.
Aside from being popular side hustles, dress hire businesses also offer a more affordable and sustainable way for Australians to access the clothes they want. According to The Australia Institute, Australians contribute approximately 300,000 tonnes of fashion waste every year, and hiring clothes can help reduce that number. However, Rachael fears that scammers will continue to take advantage of lenders, which is why she and her business partner have become more cautious and now collect additional details from customers to report any future thefts to the police. After all, another loss could seriously impact their income.
For those running side hustles, it's essential to take precautions to protect themselves from scammers. This includes verifying customer identities, checking for any inconsistencies in their profiles, and only completing transactions through trusted platforms like PayPal. We reached out to NSW Police and the Australian Competition & Consumer Commission for comment, but they did not respond.
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