The biggest Amazon fraud ever discovered in the EU has been uncovered reportedly costing the company €330,000 in lost product.
The scam was simplicity in itself which as to order high value goods such as iPhones from Amazon, weigh the box, remove the retail packaging, fill it with dirt and return it keeping the goods. So successful was the scam that the perpetrators, James and his mate Juan, even set up a limited company to sell their stolen goods… all of which were sold without the retail packaging.
This isn’t a fraud that will be new to marketplace sellers – it’s so routine it’s almost common place to have a new product switched for a broken product, a totally different item, an empty box, a brick or other worthless material such as dirt. What’s astounding is that even with €1,000 euro items the total number of returns must have been staggering!
The scam worked because Amazon apparently don’t check returns before processing a refund. They simply weigh the incoming goods and if the weight matches the outgoing weight it triggers a refund immediately. The goods eventually end up on a shelf in the warehouse to be resold or are sent for disposal. With Amazon Prime, the fraudsters didn’t even have to pay carriage.
The biggest Amazon fraud in the EU was eventually discovered as Amazon started to crack down on serial returners and investigated why they were getting so many returns from the account in question. Amazon’s Barcelona warehouse discovered a returned item was missing and the packaging was filled with dirt and that sparked an investigation with the Police being called.
The two scammers have been to court with bail set at €3,000 a piece, but it is likely that they will be facing lengthy prison sentences.
Biggest Amazon fraud ever worldwide
This €330,000 scam isn’t even Amazon’s biggest fraud worldwide, that dubious award goes to Erin and Leah Finan who claimed for returns never sent back to Amazon, instead selling them to Danijel Glumac who acted as a fence reselling items below market price. This scam cost Amazon around $1.2 million in merchandise before the trio were eventually rumbled not by Amazon, but by the US Internal Revenue Service, the United States Postal Inspection Service, and the Indiana State Police.
The lesson is that you can scam for a while but once caught, it’s easy to roll back the entire operation. When (not if) you are caught you’ll be going to jail.