There are many ways in which online sellers encounter return fraud.
At one end of the scale is "closet fraud," where clothes are bought to be worn once and then returned for returns. At the other end are career criminals who systematically make money from Amazon and eBay's generous return policies.
Some kinds of return scams use brazen tactics to get free merchandise, such as returning a box filled with dirt so there are no alarm bells when they are weighed. Others quietly undermine the return process to hurt competitors and may never be detected at all.
All of these actions waste money, take time, and cause frustration and anger among salespeople. Is there anything sellers can do to counteract this? Regardless of which sites you sell on, the key factor is how you fulfill orders and handle returns - in-house or outsourced.
In-house order fulfillment and returns fraud
If you sell on eBay or fulfill your own orders on Amazon, every return will come back directly to you and you can see it for yourself.
Here's how you can run into fraudulent returns as a seller who fulfills your own orders:
1.) The box is empty. The buyer can use pre-paid labels and shipping service to avoid registering low weight in the postal system. The package contains dirt, debris, or even potatoes. The goal here is to make the return look genuine when it is processed or weighed.
It's a different product. Customers have been known to send older models or cheaper versions of smartphones and other electronics.
2.) The returned merchandise is a counterfeit. This is dangerous. Not only can the buyer get the genuine product for free, but if you challenge him, you can claim that you sold him a fake. Will you be able to prove that this is not the case?
3.) The product is damaged. Buyers have been known to accidentally bend or cut the product when unwrapping it, and then intentionally aggravate the damage to cover up their mistake and claim that the product was received in this manner.
4.) The merchandise was used. This is sometimes called "free rental" or "closet." This is so common that companies are now trying to create online clothing rentals as a new business model. You get late returns. Customers can return items within the allowed return period to put more pressure on the retailer to process the return quickly.
5.) The package doesn't arrive. Amazon and eBay often process returns before the seller receives a refund, and buyers can take advantage of this and not ship the item at all.
The buyer chose the wrong reason for the return. It's common for buyers to avoid paying postage on returns by choosing a reason that places the blame on the seller, such as "doesn't fit the description."
If you outsource fulfillment to a third-party logistics company (3PL), you'll be relying on them to verify your returns and take appropriate action. Some 3PLs provide a wide range of return processing services, while others will simply send the return back to you.
read more here*.
At one end of the scale is "closet fraud," where clothes are bought to be worn once and then returned for returns. At the other end are career criminals who systematically make money from Amazon and eBay's generous return policies.
Some kinds of return scams use brazen tactics to get free merchandise, such as returning a box filled with dirt so there are no alarm bells when they are weighed. Others quietly undermine the return process to hurt competitors and may never be detected at all.
All of these actions waste money, take time, and cause frustration and anger among salespeople. Is there anything sellers can do to counteract this? Regardless of which sites you sell on, the key factor is how you fulfill orders and handle returns - in-house or outsourced.
In-house order fulfillment and returns fraud
If you sell on eBay or fulfill your own orders on Amazon, every return will come back directly to you and you can see it for yourself.
Here's how you can run into fraudulent returns as a seller who fulfills your own orders:
1.) The box is empty. The buyer can use pre-paid labels and shipping service to avoid registering low weight in the postal system. The package contains dirt, debris, or even potatoes. The goal here is to make the return look genuine when it is processed or weighed.
It's a different product. Customers have been known to send older models or cheaper versions of smartphones and other electronics.
2.) The returned merchandise is a counterfeit. This is dangerous. Not only can the buyer get the genuine product for free, but if you challenge him, you can claim that you sold him a fake. Will you be able to prove that this is not the case?
3.) The product is damaged. Buyers have been known to accidentally bend or cut the product when unwrapping it, and then intentionally aggravate the damage to cover up their mistake and claim that the product was received in this manner.
4.) The merchandise was used. This is sometimes called "free rental" or "closet." This is so common that companies are now trying to create online clothing rentals as a new business model. You get late returns. Customers can return items within the allowed return period to put more pressure on the retailer to process the return quickly.
5.) The package doesn't arrive. Amazon and eBay often process returns before the seller receives a refund, and buyers can take advantage of this and not ship the item at all.
The buyer chose the wrong reason for the return. It's common for buyers to avoid paying postage on returns by choosing a reason that places the blame on the seller, such as "doesn't fit the description."
If you outsource fulfillment to a third-party logistics company (3PL), you'll be relying on them to verify your returns and take appropriate action. Some 3PLs provide a wide range of return processing services, while others will simply send the return back to you.
read more here*.