A Sellers Way To Fight Amazon and eBay Return Fraud Problem.
If you’ve ever sold on Amazon, eBay, or any third-party marketplace platform, then you know product return fraud is out of hand. Ninety-nine percent of the time, the marketplace platform will side with the consumers to protect the consumer’s best interest. Whether online or brick-and-mortar, the return fraud problem needs a real solution to fix all the chaos.
How do you fix a problem as big as the product return policy system without creating more trouble than it fixes?
When customers shop online, most expect a more lenient return policy. Customers expect free shipping to them, so why not have a no-return fee back. Buyers now are asking for the return shipping to be waved, especially if it’s not their fault. This leaves a double shipping cost associate with an online return to a consumer and back to the merchant. Now, more business are looking for new ways to address this issue, like Amazon allows you to drop off at a Kohl’s or UPS Store
Besides, the criminal activity of product return fraud can be on both sides of the fence. A seller expect higher return rates.
As the pandemic forced more consumers to turn to online buying for the first time, more consumers feel comfortable with it now, and it’s here to stay. Online sales will grow tremendously over the next few years, and so will the problem of fraudulent product returns unless something is done quickly.
As online sales grow, more entrepreneurs will take advantage of the marketplace platform, and trust me; there is no shortage of merchandise to sell from online auction sites.
Auction Swapping The Never-Ending Store Return
Criminals will always find a way, and here is one scenario like a never-ending story using auction swapping to grow their business.
In our scenario, recently, a couple purchased a truckload of product return goods from an auction website at pennies on the dollar, and there’s absolutely nothing wrong with this.
Product return goods are where consumers ships or bring back a product to the store for whatever reason for an exchange or refund. Let’s face it, who wants to purchase something that doesn’t work.
Did you know retailers are losing ten percent of their sales during the holiday season, and this has not improved over the last few years and will get worse?
In most cases, the store can’t resell the merchandise, and according to Gartner Research, less than half are resold at full-price and must send the product to a warehouse for auction. A seller on Amazon must pay for the product to be shipped back to them or destroyed.
The couple realizes the truckload they purchase is that of product returns and may need parts and work before selling. But this is okay because they only give pennies on the dollar and can easily make a profit.
Oh, but this couple has a better ideal for generating a higher profit with less work and expense, not to mention that the merchandise packaging isn’t in the best shape.
The couples scheme is pretty simple, go purchases the exact product, get a receipt, switch the two items, return the non-working item, give a reason it did not work, and repeat.
The product they returned will go back to the warehouse to start the process over again.
In this scenario, our couple has purchased a truckload of brand new merchandise for only pennies on the dollar with very little work and tremendous profits.
The more lenient Amazon’s return policy gets, the more frustrating it gets for sellers. Amazon offers free return shipping back to the buyers on some products, and in some situations, a buyer can keep the merchandise with a full refund. Amazon makes money from these practices off of the seller’s back.
If a buyer’s reason for return as ” arrived damaged, doesn’t match the listing description or is the wrong item,” you will have to accept the return even if your returns policy says you don’t accept returns with most marketplace policy rules.
Still, at the same time, this is a loophole for criminals to exploit return fraud with most return policy system.
Return fraud for retailers can be a nightmare, and it will worsen before a real solution gets implemented. It is very frustrating that most marketplace platform lets buyers return items with missing parts and no packaging or instructions, ninety percent of the time.
Most sellers have had buyers return an item they suspect was fraudulent more often than not.
Could you imagine having a system that warns you of a consumer’s likelihood to make a fraudulent return, allowing you to decline an order? A system like this would be a game-changer for all online marketplace sellers.
If you were able to see if a consumer had ever abused a product return policy to other merchants before, would you? Could this save your business from future return abuse? Of course, and would you be willing to add a return of your own to the system? I think you would.
Suppose a consumer had a choice to use an affordable system that identifies a fraudulent serial returner, would they? We think the answer would be an overwhelming yes. A system that identifies fraudulent returns would be a system to help stop it. What would you have to lose? To address the fraudulent return problem, we all have a responsibility to do our part by sharing information. How long do you think a fraudulent serial returner career would last if their dirty deeds wherein a system for all to check? A system would need crafting very carefully to avoid lash back from the privacy groups.
Who Are Fraudulent Serial Returners
From a marketplace seller to sweet little old grandmothers, it’s anyone that takes advantage of a store’s return policy system. Most often than non, it usually is a person who has justified it in one’s mind as nothing wrong. If you’re returning a dress worn for a day or a tool needed for a quick job, you’ve committed return fraud no matter how you see it. Marketplace sellers are in more danger from other marketplace sellers than consumers because they need to be on the lookout for dropshipping Scam.
Amazon Returns vs. eBay On Product Returns.
It may not be as simple as you may think to answer that question. But from all the research we have conducted, we are going to do our best.
According to seller central on amazon forums
Sellers who sell the same basic items on Amazon and eBay, from selling a few thousand items per month to only a few on both sites, had this to say.
“Our Amazon return rate is about 300% higher than the same products that we sell on eBay.”
“We are selling around 1200 items a month on Amazon compared to 400 items a month on eBay with a return rate of 8.12% on Amazon and 0.02% return rate on eBay. The reason for the returns given is less than 1% due to “damaged items,” “buyers remorse,” and “item not as described,” with the rest suspect as return fraud.”
“Product returns are much higher on Amazon than on eBay, because Amazon is too friendly with the product return policy, which is excellent for the buyers but terrible for the sellers. Amazon needs to only allow returns for valid reasons. On eBay, you can’t return an item missing all packaging or broken by the customer.”
