Rachael Donnellan has been renting out clothes from her own wardrobe to make extra cash since 2016 but a recent scam slashed her income by $200 per week.
She’s one of thousands of Australians who have relied on side hustles to boost their income as the nation struggles through a cost of living crisis.
Almost 70 per cent of employed Aussies are considering or already engaged in side hustles, according to research by Fiverr — and it’s not just young people.
Almost half (45 per cent) of over-55s actively participate in side hustles compared to 81 per cent of 16 to 24-year-olds.
A survey from Small Business Loans Australia (SBLA) also found that 55 per cent of Aussies hope to start a side hustle or small business within the next five years, many hoping to supplement their income.
That’s what Donnellan wanted when she started renting out Kookai dresses as a hobby and turned it into Hire Melbourne, a thriving clothing hire business she co-owns.
With over 150 outfits available to hire at prices ranging from $25 to $200, Hire Melbourne makes up a significant portion of Donnellan’s income.
But it was slashed when a recent customer stole a $2000 vintage Herve Leger gown.
“The loss of income was the biggest hit […] because it was renting most weeks at $200 a week,” she told 9news.com.au.
Like many dress hire businesses, customers contacted Donnellan and hire outfits through social media. The customer who stole from her first reached out via Instagram.
They provided an ID, phone number and paid a $200 hire fee and $150 security bond to secure the dress, which Donnellan posted to an address they provided.
Donnellan realised something was wrong when the customer cut contact and the dress was never posted back.
“The person provided a fake number so when I’ve gone to contact them, it’s not a valid number,” she said.
She tried to track the customer down on Facebook only to learn the ID they provided had been stolen. The person it actually belonged to alerted police.
Donnellan had to cancel weeks of bookings for the Herve Leger gown and missed out on hundreds of dollars of income.
She chose not to report the stolen dress to police and fellow dress rental business owner Nicole Shiraz understands why, as few lenders get their items back.
NSW-based Shiraz had a $1,600 dress stolen from her earlier this year and went straight to police but was unable to recover it.
The customer who stole it contacted her through Instagram DMs and paid a $340 hire fee and bond upfront.
“I haven’t had anything stolen in the last year or so I thought, ‘OK, this is fine’. We take ID as well … you’re so used to trusting everyone,” Shiraz told 9news.
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Like Donnellan, Shiraz realised she’d been scammed when the customer never sent the dress back and they stopped answering messages.
The customer also wiped their Instagram account and removed the photo of their ID from the chat history, so Shiraz went to police in NSW and WA (where the customer claimed to be based).
Police were unable to recover the dress so Shiraz accepted the loss and cancelled months of bookings, losing thousands of dollars of income.
She and Donnellan claim these scams where customers use fake details to hire items then refuse to return them have become more common in the last few years.
It inspired Shiraz to launch Air Closet, an app that allows Aussies to lend and hire clothes with built-in insurance of up to $5000 for theft or damage.
“I’m trying to instil that faith in the community that we can have a recycled, shared fashion economy and we can share our wardrobe in a safe environment,” she said.
As well as being popular side hustles, dress hire businesses offer Aussies a cheaper and more sustainable way to access the clothes they want.
Aussies contribute about 300,000 tonnes of fashion waste annually according to The Australia Institute and hiring clothes could help reduce that number, but Donnellan fears scammers will continue to take advantage of lenders.
She and her business partner are more cautious today and take additional details from customers so they can report any future thefts to police, as another loss could seriously impact their income.
Aussies running side hustles can protect themselves by verifying customer identities, checking customer profiles for inconsistencies, and only completing transactions through trusted platforms like PayPal.
NSW Police and Australian Competition & Consumer Commission (ACCC) did not comment.
