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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Alleged Case of Returns Fraud Cost Amazon Half a Million
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