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Wed June 17 2020 21:00:40

Alleged Case of Returns Fraud Cost Amazon Half a Million

By: Ina Steiner

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A buyer allegedly cost Amazon over half a million dollars in returns fraud, according to the Department of Justice.

The government alleges the man executed a scheme to defraud Amazon through fraudulent transactions and theft of inventory through falsely represented returns. 

He ordered thousands of products from Amazon and replaced the original products with lesser value replacements, often items different than the ones he originally ordered, before returning the packages to Amazon for refunds, according to the DOJ press release.

Sellers have long complained about returns fraud on major marketplaces including not only Amazon, but on eBay as well.

On Amazon, the problem of returns fraud can be compounded. Today's press release states, "Many of the returned items were sent back in the original packaging in an attempt to deceive Amazon's incoming inspection process."

Not only might an FBA seller lose out on the original transaction, but if the returned inventory was placed back on the shelf by Amazon staff, the lower-quality item could be sold again, potentially netting the seller a complaint and harming their performance metrics.

The government alleges the Rhode Island man had about 30 Amazon customer accounts under various names and email addresses and received concessions or refunds on approximately 7,450 orders.

"Amazon's standard inspection process flagged approximately 149 of the returned items as potentially fraudulent," the government wrote in its press release on the Justice.gov website, noting, "A federal criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty."

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Perminate Link for Alleged Case of Returns Fraud Cost Amazon Half a Million   Alleged Case of Returns Fraud Cost Amazon Half a Million

by: Tiffee Jasso This user has validated their user name.

Thu Jun 18 00:43:15 2020

Until Amazon and other markets address their generous Return Policy, and ignore buyers who make more lots of returns this is going to happen.  These buyers are RED INK buyers. They cost everyone that has to deal with them money. Amazon has no problem with this amount of fraud. Why should they? It is the sellers who took the hit. Amazon got their fees for the item, and more fees by selling the wrong items again and again. Sellers are the big losers here!

Perminate Link for Alleged Case of Returns Fraud Cost Amazon Half a Million   Alleged Case of Returns Fraud Cost Amazon Half a Million

by: SellerGirl This user has validated their user name.

Thu Jun 18 05:52:04 2020

I think I dealt with that fraudster on Etsy, too.  A nightmare customer with an eastern Connecticut PO box that ordered a ooak item, then kept the item and got a full refund, too. "She" sent "it" back, but the package only had an empty lump of bubble wrap inside, but since tracking showed she sent something back, Etsy forced a full refund.  

Perminate Link for Alleged Case of Returns Fraud Cost Amazon Half a Million   Alleged Case of Returns Fraud Cost Amazon Half a Million

by: COVID-19 This user has validated their user name.

Thu Jun 18 06:17:01 2020

Amazon so dumb, they breed this kind of scams by buyers with their stupid, unquestioning return policy.  This in turn ruins ALL ecommerce on all platforms because these scumbag buyers feel emboldened and entitled.

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This user has validated their user name. by: The End

Thu Jun 18 06:19:09 2020

Etsy returns fraud is HUGE.
Usually only happens when PayPal is used for the purchase.
NEVER EVER USE PayPal.

Perminate Link for Alleged Case of Returns Fraud Cost Amazon Half a Million   Alleged Case of Returns Fraud Cost Amazon Half a Million

by: FeelingFroggy This user has validated their user name.

Thu Jun 18 07:40:28 2020

Amazon should do what they tell everyone else to do. SUCK IT UP AS THE COST OF DOING BUSINESS.

Personally if you can't afford to lose it you shouldn't sell it. This can't happen to more deserving companies.

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by: Disgusted This user has validated their user name.

Thu Jun 18 10:10:36 2020

Amazon can afford to suck it up.  But tell me which sellers a worth billions.  If they were do you think they would be selling online???

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by: ShortSeller This user has validated their user name.

Thu Jun 18 19:33:30 2020

All this demonstrates is Amazon is completely inept. Just taking averages from the numbers provided, that is close to 250 returns per account. Like at what point does Amazon flag the account, return 201? Return 237?  Perhaps they only care when the item is shipped and sold by Amazon and not a FBA seller?



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