Return Fraud ExamplesFraudulent Returns Are a Real-Life Threat
Return Fraud Examples: Real High-Profile Cases to Help Illustrate the Problem
Tactics and statistics tell part of the story, but things probably still feel a bit abstract. So, what does return fraud actually look like on a day-to-day basis?
Well, one case that gained a little bit of attention in 2024 involved TikTok user Cedaz (real name Eben Fox), a prominent figure in the bootleg merchandise space (often called the “rep” community, short for “replica”). Fox broadcasted himself engaging in return fraud to his tens of thousands of followers... and was promptly sued by Nike as a result:
That’s just one case, though. There are countless examples of people getting busted for running return fraud schemes of varying levels of sophistication.
In this chapter, we’ll walk through a couple of other real-world examples of return fraud to show you exactly how these schemes unfold, and how much they can cost merchants.
University of Miami Student Convicted in Multi-Million Dollar Return Fraud Scheme
In August 2024, a federal judge in Tampa, Florida ordered Matthew Bergwal to forfeit more than $224,000 in fraudulently obtained funds from a return fraud scheme that he had been conducting since December 2021.
To carry out the scam, Bergwal and his co-conspirators took over the accounts of five employees at a supply chain management company. Doing so allowed the scammers to gain access to the company’s “proprietary shipping and tracking application,” which the fraudsters then used to enter “fraudulent tracking scans for goods shipped by the company on behalf of retailers.”
These “faked scans allowed the defendants to claim refunds on the goods, while they kept the merchandise.” Bergwal offered his fraudulent services for sale at a profit, and also kept the stolen goods — like a $41,000 Rolex Presidents Day watch and a $600 electric skateboard — for himself.
For his role in the return fraud ring, Bergwal pleaded guilty to one count of mail fraud conspiracy as part of an April 2024 plea deal.
Five Seattle-Area Sisters Indicted in $1 Million Return Fraud Scheme
In June 2024, a grand jury indicted five sisters on “conspiracy to commit mail fraud and 24 counts of mail fraud” for their attempts to exploit a major clothing retailer’s “Fast-Track Returns” policy.
To carry out the scam, the sisters would scan a return label at a local post office. Afterwards, they would receive “a gift card with the refund amount via email.” However, the conspirators would not return the merchandise at all.
Rather, the scammers would visit brick-and-mortar establishments around the country and present the merchandise for an in-store refund. In doing so, they intentionally and fraudulently secured double refunds; once via email, and again in-person.
The scheme ultimately cost the retailer more than $1 million, which motivated them to revise their return policies once the scheme was uncovered.
Conspiracy to commit mail fraud and mail fraud are punishable by up to 20 years in prison and a $250,000 fine.
