From Phishing Attacks to Return Fraud: The Complete Guide to Amazon Refund Scam Prevention
Refund Scams on Amazon Target Both Buyers and Sellers
As long as there have been people, there have been other people trying to work scams on them. And, every human advancement seems to come with a new way of reaching into peoples’ pockets.
Take Amazon, for example. Whether you’re a consumer shopper or a merchant on Amazon, refund scams are an ever-present threat. As a buyer, you’re in the crosshairs of phishing or remote access scams. Fraudsters dangle the false promise of fast and free returns, and impatient customers end up clicking on malicious links.
If you’re an Amazon merchant, on the other hand, those same customers can turn into friendly fraudsters: buyers abuse Amazon’s refund policy, secure refunds they’re not entitled to, and leave you holding the bag.
While I’ll talk briefly about threats facing buyers, this article focuses primarily on the merchant side of things. I’ll discuss how Amazon refund scams impact sellers on the platform, including fraud methods and ways to protect your revenue.
Learn more about return fraud
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What Does Return Fraud on Amazon Look Like?
Return fraud on Amazon occurs when buyers exploit merchant policies to obtain illegitimate refunds, costing sellers billions in lost revenue and unsellable inventory. Roughly 15% of returns are fraudulent, and Amazon’s pro-buyer A-to-Z Guarantee shifts much of the financial burden onto sellers.
An Amazon return scam is when a buyer manipulates the platform’s return policy to obtain a fraudulent refund from an Amazon merchant.
For sellers, no return is ideal. But fraudulent returns are especially harmful, since they often involve inventory that can’t be resold. That directly results in lost revenue and higher operating costs.
Return abuse is a big problem for merchants: of the $685 billion in returns in 2024, an estimated 15% were fraudulent. This cost retailers like you over $100 billion to abusive returns – a number that isn’t even adjusted to account for indirect costs.
Obviously, not all returns are fraudulent. Return requests that are in line with a platform or seller’s return policy should always be honored.
For sellers on Amazon, return fraud is an even thornier issue. The threat is exacerbated by the platform’s pro-buyer A-to-Z guarantee, which passes the burden of returns, legitimate or not, onto sellers.
Even Amazon itself acknowledges that it has a return abuse problem. In December 2023, the eCommerce giant filed a lawsuit against a Lithuanian fraud ring called REKK. The suit accused the fraudsters of conspiring with ex-Amazon employees to systematically carry out fraudulent returns of expensive items like electronics and gold.
Refund abuse of this sort threatens the entire eCommerce ecosystem. Dishonest returns – whether they’re intentionally dishonest or not – ends up raising costs for both you and your customers.
Common Amazon Refund Scam Tactics Targeting Sellers
Return scammers use a range of tactics, such as: sending back empty or swapped boxes; stripping items for parts; using items before returning them; disputing late returns; or falsely claiming non-delivery. For sellers, this equals lost revenue, damaged inventory, and little recourse without strong proof.
So, now you know the motivation behind most Amazon refund scams. How exactly do they work, though?
Here are a few ways your business might be targeted by return scammers:
The Empty Box
The Switcheroo
‘It Came Like That.’
Wardrobing
The Slowpoke
‘It Never Arrived’
Why Do People Engage in Amazon Refund Scams?
Amazon refund scams typically happen for four main reasons: deliberate fraud for profit, opportunistic “victimless crime” thinking, competitive sabotage by rival sellers, and genuine buyer mistakes. Regardless of intent, however, the financial impact ultimately falls on sellers.
Understanding your customers’ reasoning and motivation is a big part of discouraging this activity.
Scammers who engage in refund fraud assume there’s very little likelihood of it even being noticed. This is bolstered by the fact that Amazon is such a massive company. Many consumers see illicit returns as a “victimless crime,” assuming that the company won’t be impacted.
What the average consumer doesn't realize is that products listed on the site are not always sold by Amazon. While small businesses contribute many of these products through Amazon, consumers fail to make the distinction.
Here are just a few of the leading reasons why consumers might carry out an Amazon refund scam:
Most return requests are not malicious. It’s best to be wary of potential Amazon refund scams but always keep an open mind. Also, don’t forget to practice excellent customer service at all times. It can save you a lot of headaches later on.
Why Amazon’s Policies Favor Buyers (& What That Means for Sellers)
Amazon’s buyer-first policies (A-to-Z Guarantee, Refund at First Scan) prioritize customer convenience while shifting financial risk to sellers, often issuing refunds before returns are inspected. Regardless of who handles fulfillment, sellers have limited control over returns, making refund fraud difficult to prevent or contest.
Amazon’s big on its core values, one of which is “customer obsession.” The flip side, however, is that the platform goes light seller protections, a philosophy that inadvertently creates loopholes for bad actors.
Amazon’s heavily pro-shopper stance is probably most visible in its “A-to-Z Guarantee,” which gives buyers up to 30 days to return items purchased from third-party sellers. This guarantee covers the cost of the product as well as both the price of original and return shipping.
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Amazon, however, isn’t the one footing the bill: you are. So not only does this policy cater to buyers, it also heavily incentivises you to provide superior customer service… at least in theory. Remember, we talking about dishonest customers here; the best service in the world is unlikely to thwart them.
Making matters worse for sellers is Amazon’s Refund at First Scan (RFS) policy, in which the platform automatically issues a refund as soon as the carrier scans the return label. That forces you to work without either the cash or the merchandise, at least while the package is in transit.
And, if the buyer returns a box of rocks or a swapped-out broken unit, the money is already gone before you can inspect the damage. Under RFS, there’s no opportunity for you to inspect the merchandise before it’s returned. Needless to say, that makes it almost impossible to identify return fraud attempts until after the fact.
To minimize buyer friction, Amazon seldom requires carriers to inspect merchandise as part of a return. For items under $25, Amazon even issues “
How Amazon’s return policies impact you specifically depends on which fulfillment method you use:
Regardless of which method you’re using, you’re still stuck with the same problem: you (or your staff) can’t physically inspect the merchandise when it’s being scanned for return. Your choice of fulfillment option can alter how the refund is handled, but neither on gives you much power to prevent refund fraud.
Examples of Amazon Refund Fraud
Bad actors siphon millions of dollars away from honest Amazon users every year. Some act alone; many more are co-conspirators in highly organized fraud rings. Here are a few of the most notorious examples of return fraud on Amazon:
REKK: The Lithuanian Crime Ring
Two years after filing a lawsuit against REKK, Lithuanian authorities arrested Domantas Radeckas, the alleged ringleader of the criminal enterprise, along with two other associates. Radeckas was charged with fraud and money laundering for his role in systematically abusing Amazon’s refund policy to the tune of more than €2.5M.
As part of his arrest, Lithuanian authorities also seized “€5M worth of cryptocurrency and more than €700K in cash from the suspect and his alleged associates.” If convicted, he could face up to 8 years in Lithuanian prison.
Tampa Woman Charged in $100,000 Amazon Return Fraud Scam
In October 2020, the Hillsborough County Sheriff’s Office in Tampa, Florida arrested a Hoai Tibma, a 32-year-old woman charged with one count of grand theft for her role in spearheading a $100,000 return fraud scheme against Amazon.
Between March 2015 and August 2020, Tibma “reused prepaid shipping labels generated for canceled orders, and then applied them on other returns.” To evade detection, Tibma used 31 different Amazon accounts and “completed 42,000 individual returns” over the 5-½ year period, all of which were linked to her Tampa address.
As a result of the scheme, Tibma secured “more than $100,000” in fraudulent returns from Amazon. If convicted, she faces up to 15 years in prison.
Manassas, Virginia Man Pleads Guilty to $300,000 Amazon “Switcheroo” Scam
In December 2021, a 34-year-old Manassas man named Farhaad Riyaz pleaded guilty to one count of mail fraud for his role in a years-long refund fraud scheme.
According to a press release from the US Attorney’s Office, Riyaz defrauded Amazon merchants out of more than $300,000 between 2017 and 2020 by “operating a mail fraud scheme to buy high-end products, claim a refund, then return a similar item of significantly lesser value.”
As an example, the memo stated how, in June 2019, Riyaz bought a rare Fender Telecaster electric guitar from Amazon for approximately $2,600. He then returned a Squier Telecaster electric guitar of the same color that had cost him approximately $400.
As part of his guilty plea, Riyaz agreed to pay $312,964.38 in court-ordered restitution. He faces up to 20 years in prison for his crimes.
How Amazon Fulfillment Could Affect Returns
Using FBA means Amazon controls return inspections and resale decisions, which can lead to missed defects, misclassified items, and limited visibility for sellers. While convenient, this lack of hands-on review can increase complaints, storage or disposal costs, and exposure to return fraud.
Do you fulfill orders through Amazon using their Fulfillment by Amazon (FBA) service? If so, this means you’re depending on Amazon to not just process returns for you, but also detect when there might be irregularities and determine whether or not items are fit for resale.
The Fulfillment By Amazon process usually handles returns in the following way:
- A return is initiated by the customer
- Items are received by FBA services
- Items are inspected by FBA staff
- Items are sorted as “sellable” or “unsellable”
- Sellable items are added back to inventory and relisted
- Unsellable items are stored until seller removes or asks for it to be recycled
FBA is a great service, but as you might imagine, Amazon workers aren’t brand experts. Things you may have noticed about your products can be easily overlooked by a third party. This is especially true when you consider that the FBA crew is under pressure to review and process returns as quickly as possible.
A customer that buys a resold item is bound to notice if the item doesn’t match the description, or if the item is damaged or broken in some way the FBA crew missed. Customers who identify these mistakes are bound to complain. And, without having the returned item in your hand to verify those claims, you’re unable to accurately diagnose the issue or pinpoint illegitimate returns.
Marking every return as non-resellable presents its own problems. Remember: every returned item must be stored in the Amazon warehouse until it is sent back to you or destroyed at your expense. In the latter case, you’ll end up destroying a lot of perfectly good merchandise… especially if those refund requests are invalid (i.e. refund scams).
While fulfilling your own orders is ideal, not every company is capable of fulfillment at scale without help. This is why it’s important to recognize potential weaknesses in your order and delivery process to prevent issues later on.
How to Document Transactions to Protect Yourself
Thorough documentation is a seller’s strongest defense against Amazon return fraud. This should include record product condition, serial numbers, weights, and packaging details before shipment. Preserve delivery proof and tracking details after delivery to dispute fraudulent claims effectively.
Since you don’t have the luxury of face-to-face interactions with your buyers, extensive documentation is the only leverage you have against Amazon return fraud. To protect yourself, you should be documenting every step before shipping, during the transaction, and following delivery.
Before Shipping
Make it a point to document the product’s condition by photographing or video-recording the packing process. Make sure the shipping label and customer address are clearly visible in the frame. For electronics, log the serial number; this can help you combat “switcheroo” scams, in which buyers return old units in your new box. Also record the package weight down to the ounce — documented discrepancies in weight can help you fight empty-box scams.
During the Transaction
Limit all communication to Amazon’s Buyer-Seller Messaging Service. Communicating on-platform ensures Amazon support has access to the full context in case a dispute arises. That said, you should also be on the lookout for refund fraud red flags, such as buyers fishing for partial refunds due to vague defects or shoppers who refuse to provide photos of damaged goods.
After Delivery
Continue your documentation: things can go wrong in the after delivery. For example, tracking numbers that show a package is in transit may not be enough to prove that it arrived in the buyer’s hands. Particularly for items over a certain dollar threshold, signature confirmation can help you prevent “Did Not Arrive” claims. If a buyer does submit a dispute, capture screenshots of the tracking history. Do this immediately, since carrier links can expire.
How to Respond When You’re Targeted by a Refund Scam
When hit with a refund scam, merchants shouldn’t automatically issue a refund before inspecting the return. Review the buyer’s history, use a professional tone when communicating, and document everything. Use Amazon’s tools to report abuse or file a SAFE-T claim, backing disputes with policy-based evidence. In extreme cases, law enforcement may need to be alerted.
Sell for long enough on Amazon, and you’re bound to encounter a refund scam. If you find yourself ensnared in one, here’s what you can do:
Immediate Actions
If you detect a fraudulent return, pause. Don’t issue a refund before receiving and inspecting the return, no matter what the buyer says.
Instead, reach out to the buyer immediately using a professional, neutral tone. Often, a polite, scripted message like, “We’re initiating an internal investigation with the carrier and checking serial numbers against our shipping logs,” is enough to make an opportunistic scammer back down.
This is also a good time to check the buyer’s history, which can reveal whether this was an isolated incident or a systematic attempt to abuse Amazon’s refund policy.
Amazon-Specific Steps
Afterwards, see if you can use Amazon’s systems to your advantage. If a buyer is clearly violating policies, you can report them via Seller Central or by emailing reportascam@amazon.com. While this probably won’t resolve the issue, it does flag the account, which can help prevent further losses.
For FBA or RFS orders where Amazon has already refunded the customer, you can file a Seller Assurance for e-Commerce Transactions (SAFE-T) claim. This lets you appeal (and potentially get reimbursed) for orders that the buyer already received a refund for. When filing a SAFE-T claim, provide as much evidence as possible. You’ll need proof that you were impacted by return fraud, either because you were returned a different item, no item at all, or an item outside the return window.
When disputing a refund, use concise, unemotional language. Provide hard evidence in the form of annotated, high-resolution photos, carrier weight certificates, and serial number mismatches. Reference specific Amazon Standard Identification Number (ASINs), and mention the Amazon policies that the buyer violated.
An automated reply system may not understand a nuanced situation. If the first level of support sends a canned rejection, don’t give up. Rather, see if you can escalate the issue to a (human) supervisor.
External Reporting
If the loss is significant or part of a larger pattern, take the fight off-platform. Report the incident to the FTC at ReportFraud.ftc.gov or file a complaint with the FBI’s Internet Crime Complaint Center (IC3).
Like reporting a buyer on Seller Central, escalating your case to a federal agency is unlikely to result in immediate restitution. However, it will create an official government record of the complaint. This is the equivalent of a police report. It can sometimes be the tie-breaker evidence needed to win a refund fraud case with Amazon or your eCommerce fraud insurance provider.
While you may want to consider legal action in extreme cases (especially if the issue is pervasive, remember that litigation is expensive and outcomes aren’t guaranteed, so carefully consider your potential return on investment.
When it comes to returns and chargebacks, there's no such thing as a “victimless crime.”
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10 Amazon Fraud Prevention Strategies That Actually Work
As a seller, preventing refund fraud on Amazon is admittedly an uphill battle. Decreasing instances of successful scams, though, is a worthy goal. Let’s look at some tried-and-true ways you can use to keep bad actors at bay:
#1 | Strengthen Your Return Policy
While you must adhere to Amazon’s A-to-Z guidelines, posting your store’s specific refund and restocking policies may help deter casual fraudsters. Add clear, concise requirements to your seller profile and checkout page.
#2 | Implement Restocking Fees
While we’re on the subject, note that Amazon says you can assess a 20% restocking fee for returns made outside the 30-day A-to-Z guarantee window. Apply the maximum allowable restocking fee to offset your losses.
#3 | Require Return Authorization Numbers
Return Merchandise Authorization (RMA) numbers can help you track inbound returns and make sure that returned packages entering your warehouse match an active dispute.
#4 | Use Signature Confirmation
Set a price threshold (e.g. $50+) above which signature confirmation is mandatory. Doing so can help you defend against non-delivery claims.
#5 | Monitor for Repeat Offenders
Keep an internal list that tracks bad actors’ names and addresses. While you cannot easily block problematic buyers on Amazon, you can cancel their orders or document their shipments more aggressively.
#6 | Price in Fraud Costs
Accept that return fraud is, at least to some extent, an unavoidable cost of doing business. You can cover this cost by raising your prices to self-insure against fraud and scam losses.
#7 | Consider Return Restrictions
Amazon doesn’t allow an across-the-board “no returns” policy, but they do permit limited return restrictions in specific categories: personalized items, for example, or certain health, hygiene, or safety-related items. By all means, identify items that qualify and mark them as non-returnable.
#8 | Build Relationships With Honest Customers
While you’re focusing on blocking scammers, don’t neglect to cultivate honest customers. Use positive reviews and feedback to build a strong seller profile rating. That could make buyers more likely to give you the benefit of the doubt during disputes with Amazon support.
#9 | Know When to Walk Away
If a specific product attracts disproportionate fraud, stop selling it. At the very least, analyze how much you’re making on the item overall. In the long run, the revenue may not be worth the return, or the risk of an Amazon account suspension.
#10 | Insurance & Chargebacks911®
For high-volume sellers, consider third-party insurance for shipments. You can also benefit from Chargebacks911®’s end-to-end dispute management platform. This proven solution can help you counter chargebacks and other forms of post-transaction fraud.
A Last Note: Don’t Forget About Chargebacks.
Monitoring performance metrics is a critical aspect of any eCommerce business, particularly when it comes to chargebacks and other post-transactional threats.
Even if you catch a customer in the act of an Amazon refund scam, they could still approach their bank to dispute the transaction when they fail to get what they want. If this happens, you’ll fork over additional funds in the form of chargeback fees… even if you can prove the dispute is illegitimate!
In order to fight back against Amazon refund scammers and prevent the chargebacks that could result from them, you need to combine your fraud detection resources with an effective, comprehensive chargeback management strategy.
Call Chargebacks911 today to find out how fraud management services can benefit your business, or click here for your FREE ROI analysis.
FAQs
Do people abuse Amazon refunds?
Yes. Unfortunately, Amazon refund scams are a frequent occurrence on the platform, despite (or because of) the company’s generous refund policies.
How do Amazon refund scams work?
Scammers approach fake refunds in many ways. Generally speaking, though, scammers will attempt to initiate a refund without returning the item they purchased.
What is considered refund abuse?
Any activity related to illicit refund scams is considered a form of refund or merchant abuse. Essentially, when customers attempt to defraud a merchant in pursuit of a fake refund, then a case of refund fraud has been committed.
What are the most common Amazon scams?
Shady customers use several tactics in the pursuit of refund scams. These include returning empty boxes or boxes full of junk, claiming their items arrived broken, claiming their items never arrived, or just inventing a fake reason to return the item outside of a merchant’s return policy.
Can you go to jail for scamming Amazon?
Actually, yes you can. Amazon refund scams are prosecutable, like any other act of fraud. Responses will depend on the scale of the offense. Most offenders are handed fines and infractions for fraud. But, every once in a while, someone will go to jail for refund scamming.
