The Sunday Times May 22, 2022 7
NEWS
£
Price of an online guide explaining
how best to get an instant refundRefund racket hitting online retailers
sending back a package that weighs the
same as the original but without the
expensive item inside. In some cases,
warehouses scan the barcode on the out-
side of the box and a refund is issued
before it is actually opened, by which
point the criminals will have received the
money and disappeared.
The author of one ebook guide to
return fraud claimed they had carried out
8,000 returns, including 500 for them-
selves and 7,500 as an agent for clients.
“Refunding has huge potential. There are
so many people making a living doing
refunds,” they said.
Describing the crime as a “long-term
business”, it provides detailed informa-
tion on several methods of fraud, such as
tampering with tracking labels, using
fraudulent details and exploiting auto-
mated customer service systems.
The crime is putting pressure on shops
at a time when a third of fashion items
bought online are returned. Each return
costs about £20 in shipping, storage,
repackaging and discounting, accordingto the returns management company
NShift. Last week, Zara announced it
would charge buyers for some returns,
joining others Next, Uniqlo and others.
Online guides sold for up to £
instruct customers on how best to navi-
gate each retailer’s return procedure,
including entering certain key phrases
when talking to shops’ automated chat-
bots to prompt an instant refund.Customers can even hire refunders to
advise them on what to buy from where
and then call customer service on their
behalf to secure the refund. They receive
a percentage of the refund, sometimes as
much as 20 per cent. The fraudsters have
spreadsheets listing store return policies,
the carriers and types of tracking they
use and which kinds of requests work
best. One retailer said it was working with
police to tackle professional refunders
and putting “robust checks” in place to
deal with the problem.
Dr Regina Frei, an associate professor
of operations and supply chain manage-
ment at Southampton Business School,
who works with retailers and police to
study return fraud, said: “Organised
crime has taken return fraud to a new
level. The pandemic seems to have given
those fraudsters time to get organised
and develop this [technique].
“It can involve fake receipts and track-
ing ID numbers, for example, and people
who keep changing their addresses and
phone numbers to avoid being identified.Retailers are facing a barrage of fraudu-
lent returns from “professional refund-
ers” who sell guides on the internet,
including a list of easy targets.
Gangs are using a variety of techniques
to manipulate retailers into giving them a
refund, a replacement or both. A practice
that was once merely a minor nuisance
from an occasional cheating customer is
being used by organised criminals who
have gained detailed knowledge of each
merchant’s systems and procedures,
according to academics.
The most common technique involves
claiming the goods were not delivered by
the courier or that they arrived but at
least one item was missing. However, the
increase in cameras and monitoring used
in packing factories and by couriers is
making this harder. A new and more
elaborate ruse involves claiming a refund
and pretending to return the goods in the
post while keeping hold of them to sell.
This technique sometimes involves
Louise Eccles Consumer Affairs Editor
Organised criminals are offering guides on how to rip off shopping websites that allow goods to be returned free of charge
It is shocking. Some retailers are starting
to realise that they need to find ways to
work with law enforcement agencies, as
organised crime has grown a lot during
the pandemic.” Frei said this kind of
crime had implications for all shoppers.
“The more people return, the more we
have to pay for it,” she said.
A video on YouTube advertising one
e-book guide on how to commit refund
fraud boasted: “Want the PlayStation 5,
the newest MacBook Pro or even a Rolex,
but you don’t have the money to buy one?
[This] refunding ebook will teach you
how to get all the items for free.”
Claiming that the guide could help
users “make huge profit within a very
short time frame”, it added: “Refunding
is technically illegal, so you have to play it
safe. Companies are aware of refunding,
but there is nothing they can do to stop it.
They have to provide good support to
every customer, and bad word of mouth
can ruin their profits. So it is better to
have every customer happy.”
Another website published a list of 50stores’ “safe limits” — the point at which it
said an investigation into a suspicious
refund was unlikely — as well as the num-
ber of times you could claim for a refund
without being flagged as a suspect.
Dr Adrian Beck, emeritus professor of
criminology at Leicester University, who
is conducting research into shop losses,
said: “The challenge retailers like Ama-
zon have is they will be getting thousands
of items coming back every day and there
is probably a lag between when it gets
processed and somebody physically
unpacking it and, in the meantime, the
refund payment has happened.
“Some returns centres are starting to
use the equivalent of body scanning tech-
nology or x-ray technology to try and
identify what’s in a package that’s been
returned to see whether it is a brick when
it should be an iPhone, for example. So
they’ve clearly got concerns about this.
“It has become much harder to do card
fraud and, as such, criminals are trying to
find other ways to get the goods for free.”
@Louise_EcclesCadets celebrate their
graduation from the US
Military Academy in West
Point, New York, by tossing
their army caps high into
the air — and forgetting
about them. By tradition,
the young soldiers leave
cash, notes and pictures
inside the caps for children
waiting to grab them after
the ceremony.AND TO CAP
IT ALL...EDUARDO MUNOZ ALVAREZ/AP