A Sellers Way To Fight Amazon and eBay Return Fraud Problem.

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 product return fraud without creating more trouble than it sets? 

When customers shop online, most expect a more lenient return policy. Customers expect free shipping, so why not have a no-return fee when it’s shipped back to them? Buyers are now asking for the return shipping waived, especially if it’s not their fault. If a customer gets charged with return shipping, it will leave them with a double shipping cost associated with an online order. Now, more businesses 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 quickly gets done.


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, which has not improved over the last few years and will worsen?

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:

  • Purchase the exact product.
  • Get a receipt.
  • Switch the two items.
  • Return the non-working item.
  • Give a reason as simple as “it did not work.”
  • Repeat. 

The returned product 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; 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 gives the reason ” 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 commit return fraud with most return policy systems.

Return fraud for retailers can be a nightmare, and it will worsen before an actual solution gets implemented. It is very frustrating that most marketplace platforms let buyers return items with missing parts and no packaging or instructions. 

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 of making a fraudulent return, allowing you to decline an order? A design like this would be a game-changer for all online marketplace sellers.  

If you could see if a consumer intended to abuse a product return policy beforehand, would you? Could this save your business from future return abuse? Of course, would you be willing to add a return of your own to the system? I think you would.   

Give a consumer a choice to use an affordable technique that identifies a fraudulent serial returner. The question is, would they use it? We think the answer would be an overwhelming yes. A system that identifies fraudulent returns would be a method to help stop or at least slowdown product return fraud. What would you have to lose? How long do you think a fraudulent serial returner career would last if their dirty deeds wherein a system for all to check? 

 To address the fraudulent return problem, we all have a responsibility to do our part by sharing information.

Who Are Fraudulent Serial Returners

From a marketplace seller to sweet little old grandmothers, anyone who takes advantage of a store’s return policy system. More often than non, it 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 Scams

Amazon Returns vs. eBay On Product Returns.

It may not be as simple as you think to answer that question. But from all our research, we will do our best.

According to seller central on amazon forums 

Sellers who sell the same essential 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 300% higher than the same products 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.”

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