Buy-back and multi-platform product "moving" are popular! Fraud teams resell goods and "earn" hundreds of millions a year...

"These people can make hundreds of millions of dollars a year without any effort. The cross-border industry is going to be ruined!"

As we all know, the return policy of cross-border e-commerce platforms has created a perfect shopping experience for consumers. If the purchased products are not to their satisfaction or there are quality problems, buyers can return or exchange the products without any reason. It is understandable that such objective reasons lead to a certain return rate for sellers.

Under normal circumstances, the product return rate of Hangzhou seller Xiao Zhang (pseudonym) is basically within a controllable range. However, during the sales process, they gradually discovered that the return rate of certain products was seriously higher than the normal value, and the return rate of one product was even close to 50%.

The increase in return rate caused by many abnormal external factors has become uncontrollable.

In recent years, some fraudulent sellers have taken advantage of the "loopholes" in the platform's refund service. After purchasing products from regular sellers, they applied for a refund but did not return the products. They then moved the free products to major platforms such as Amazon, eBay, Walmart, and independent sites for resale, making a fortune out of nothing!

As the most direct victim, Xiao Zhang roughly estimated that his losses were as high as tens of millions ...

"Only two brands were resold by more than 100 eBay stores"

Xiao Zhang currently has stores on Walmart, Amazon, Homedepot, Rakuten and other platforms, with Walmart being the key platform for his business, and he is a DSV seller. Faced with the abnormally high return rate of certain products, he did not find the crux of the problem at first.

It will not be until 2021 that we receive after-sales demands from consumers.

"At that time, a buyer wanted to do after-sales service, but the order number was not ours. After asking, we learned that the other party purchased the product on the Amazon platform. After observing the order screenshots and store links, we found that the product prices of this Amazon store were much lower than ours. There was an obvious logical problem." Xiao Zhang immediately realized the problem. If the Amazon seller bought their products at a high price and then sold them on the Amazon platform at a low price, they would lose money instead of making a profit, which violated the most basic business logic.

Later, Xiao Zhang and his team discovered that many order numbers of buyers who wanted after-sales service had similar problems. In addition to e-commerce platforms, there were actually buyers who purchased their products offline.

The abnormal order number, combined with the unusually high return rate, made Xiao Zhang realize that he had inexplicably become a " cash machine " for some fraudulent sellers .

Some fraudulent sellers adopt the method of moving products across multiple platforms, opening stores on e-commerce platforms such as Amazon, Wal - Mart , Homedepot , Wayfair, Lowes, Target, Overstock, and eBay, and directly copying Xiao Zhang's product listings. There is no change in product information such as pictures, product descriptions, and titles, but the product prices are much lower than theirs. For example, a product originally sold for US$100, but the fraudulent seller may sell it for only US$80 or even lower on the eBay platform , thereby gaining a price advantage.

After receiving the orders, the platform stores of these fraudulent sellers would use their fake Walmart buyer accounts to place orders with Xiao Zhang to "purchase" the products. After Xiao Zhang sent out the goods, the fake buyer accounts would start applying for refunds with various reasons, such as poor product quality or not wanting the products anymore. Basically, all the applications were successful, but they would not return the products after receiving the refunds. Each buyer account would only place two or three orders before being abandoned in order to evade platform supervision.

On the one hand, refunds are given but no returns are given. On the other hand, these people will return counterfeit goods in order to get the products for free .

In detail, after fraudulent sellers apply for a refund, it is often not a real return. For example, after applying for a refund using a Walmart buyer number, the platform will generate a return label, and the buyer needs to print it out and stick it on the return package. These people will not send the purchased goods back, but will just find something worthless to replace them. The after-sales service of Walmart DSV sellers is mainly provided by platform staff . The sellers cannot personally check whether the returned products are consistent with the sold products. After receiving the products, the platform after-sales department often does not deliberately check them , which gives criminals the opportunity to do evil.

Fraudulent sellers repeat this operation over and over again, saving on various expenses such as product procurement fees, first-leg logistics transportation fees, and directly eliminating the risk of stockpiling. In this way, the operating cost is almost zero!

Xiao Zhang was easily fleeced by a fraudulent seller. Not only did he lose his product , but he also had to bear various additional expenses such as return shipping charges, and was also fined by the platform for problems such as excessively high return rates.

It is understood that the return rate of many products in Xiao Zhang's store has soared, especially large products. The return rate of bicycles is about 30%-50%, and the return rate of a certain outdoor product is over 40%. " The stocking cost of large products is very high. In order to save costs, this group of people is equivalent to directly robbing the products of regular sellers. "

According to rough estimates, Xiao Zhang's total losses in recent years have been as high as about two to three million US dollars, which is as high as tens of millions of RMB. The losses in 2021 were particularly severe. "On the eBay platform alone, more than 100 eBay stores were found to be reselling goods from our two brands."

In fact, in addition to the problem of product transfers between multiple platforms, fraud is also prevalent on the Walmart platform. Fraudulent sellers mainly take orders by selling at low prices or copying normal sellers' listings. In this way, they can also open a store and sell goods directly on the platform without stocking goods .

By copying the seller at a low price, one can directly grab the buybox of the real seller. After grabbing the order, one will find the real seller to place an order for purchase and shipment. After the real seller ships the goods, the buyer's number of the fraudulent seller will be refunded, but they do not actually return the goods. The return shipping label is randomly attached to a product and returned to the warehouse. In many cases, the Walmart return warehouse will not carefully check whether the fraudulent buyer has returned the same product. They may have purchased a bicycle but only returned a mobile phone case.

In recent years, Walmart has stepped up its crackdown on low-price copycats and dealt with many fraudulent sellers who copied other people's listings. In order to avoid the crackdown by the platform, many people have switched to copying other people's listings to continue to cheat. Currently, more and more fraudulent sellers use this method. The price of copy listings is often lower than the normal price, so that more orders can be received. After receiving the order, the fraudulent seller uses the fraudulent buyer account to find a normal seller to place an order. After the normal seller delivers the goods, the fraudulent buyer account refunds the money but does not return the goods. The shipping label of the return is randomly affixed to a package or even an envelope and sent to the return warehouse.

In summary, sellers who commit fraud on a single platform often have the following three characteristics:

First, the stores are generally new, with few store reviews, and most of them are new stores registered by Chinese companies.

Second, the store has created a large number of listings, and adopted the method of following or copying other stores’ listings. The listing prices are lower than those of normal sellers, and the unit price of the products sold is generally above US$50.

Third, the store does not issue WFS and does all self-delivery. Fraudulent sellers generally want to make quick money and will not issue WFS for long-term products, nor do they run advertisements for promotion.

"Relatively speaking, product moving within the same platform is easier to regulate, and the platforms have been cracking down on related violations. The regulation of product moving across multiple platforms will be a bit difficult to advance, as it involves information sharing among buyers on different e-commerce platforms. Perhaps each platform has confidentiality requirements for its own consumer data, and it is often very difficult for platforms to cooperate in investigations. These are not something the merchants can control. " From the time the problem was discovered until now, Xiao Zhang is still plagued by fraudulent orders.

The multi-platform product relocation operation has formed a mature business chain, and some people "earn" hundreds of millions a year

Like Xiao Zhang, there are a large number of cross-border sellers on different platforms who have been fleeced.

"Nowadays, more and more sellers are engaging in this kind of fraudulent operation! They are making money crazily by moving Amazon products to eBay; moving Walmart products to Amazon; moving Homedepot, Lowes, and Target products to Walmart; moving eBay products to independent sites... It can be said that they are making a lot of money." Xiao Zhang said that although these people sell originally high-priced products at lower prices, they do not need to stock up, thus saving on procurement costs. The listings can also be directly copied from regular sellers, saving a lot of manpower costs. Even after deducting a certain commission fee from the platform , they can still make a lot of net money on one order.

Some fraud teams consisting of only a few people can make illegal profits of hundreds of millions of yuan every year .

The operation of moving products across multiple platforms has become a medium- to long-term fraudulent business, which is spread across major e-commerce platforms and major sales markets. Some people estimate that the amount involved is as high as tens of billions of US dollars each year. Driven by profit, service providers specializing in multi-platform product moving operations have emerged, and the related black industry chain is becoming more and more mature.

The multi-platform product moving operation requires the use of a buyer's number to place an order. Investigations have found that fraudulent sellers often use two methods to solve the buyer's number problem.

The first type is to register a real buyer account on the platform, but their consumption behavior is abnormal and the refund rate is high, especially the refund rate of high-priced orders is super high. By refunding but not returning the goods, they can possess high-value products at zero cost.

The second type is that fraudulent sellers register fake buyer accounts themselves . The entire registration process involves some resource issues, such as how to obtain credit card, email and other information. Yien.com learned that fraudulent sellers will register or purchase a large number of email addresses, mobile phone numbers, virtual credit cards or black cards (stealing other people's credit cards), VPS or IP to register a large number of buyer accounts. These buyer accounts execute purchase orders and refund but not real returns. Some fraudulent sellers often register tens of thousands or even hundreds of thousands of buyer accounts to engage in fraudulent order placement.

The payment method can be said to be the most important part of the buyer's account. Fraudulent sellers often use credit cards to "make a fuss", either stealing other people's credit cards or using virtual credit cards, both of which are very low cost. "The prosecution period for credit card fraud is 6 months. Many credit card holders only found out that their credit cards were stolen after a long time. At this time, there will be many uncertainties when tracing for refunds; and the funds in virtual credit cards can be used indefinitely ..."

Xiao Zhang and sellers with similar experiences are well aware of the operations and characteristics of fraudulent sellers. In summary, the fraudulent buyer numbers they use have certain characteristics: the credit card number segment is relatively single (the first few digits of the credit card number are relatively fixed); there are very few orders after registration, only 1-3 purchases, but the refund rate of the buyer number is extremely high, often exceeding 50%, and the buyer number is no longer used after the refund; and the refunded orders are often at a higher unit price, with the purchase unit price being more than US$100.

"These people are very cautious, and many sellers are still kept in the dark, often not knowing that they have been targeted by fraudulent sellers. " It is understood that even if sellers find that their product return rate is abnormal, they are often powerless and simply give up "resistance", allowing fraudulent sellers to run rampant and resell their goods ...

Rampant fraudulent sellers: This is inseparable from the complexity of human nature and also exposes the shortcomings of platform supervision

Since discovering this problem, Xiao Zhang has been trying to solve it and has provided feedback to Walmart, Amazon and other platforms.

The account manager of the Amazon platform has not responded yet , and there is no feedback channel on platforms such as Homedepot, but these platforms are not the focus of sales. Therefore, Xiao Zhang focused his main energy on the Walmart platform. Walmart responded that it would take action, but no substantial progress has been made so far. The Chinese Walmart team has limited say. Since 2022, Xiao Zhang has been communicating with the official Walmart in the United States. "The foreign side said that it needs time to make a final decision and investigate, and the progress of the whole thing can be said to be very slow."

Cross-border e-commerce is a place where interests gather, mixed with various commercial struggles. Many people walk on the edge of the law, ignoring the legitimate interests of regular sellers and illegally making money. This is inseparable from the complexity of human nature and also exposes the defects in platform supervision.

"Platforms such as Walmart and Amazon are too partial to consumers, and relevant policies are also tilted towards them, which gives some fraudulent sellers an opportunity to take advantage of. At the same time, the platforms do not verify the returned packages after receiving them. Fraudulent sellers see the bugs and the fraudulent operations become more rampant." In Xiao Zhang's view, there is still a lot of room for improvement in the platform in handling refunds and returns, protecting the legitimate rights and interests of regular sellers, and reviewing the buyer registration process.

1. After the shipping label of the return order is scanned by FedEx, UPS or USPS, the system should match the weight of the product. If the weight difference is large, the refund will be suspended. In this case, the return should be checked to see if it is consistent with the original sales product. At the same time, the return warehouse will unpack and check the returned products with high unit prices (over $100) to see if they match the sales products. If the product is delivered and checked to match, a refund will be made.

2. Allow regular sellers on the platform to pay to retrieve products from the return warehouse, so that regular sellers can promptly discover that their products have been fraudulently returned and provide fraud information and evidence to the platform; Walmart DSV can change the contract terms based on actual conditions , allowing DSV sellers to set up their own return warehouses, monitor whether the returned products are consistent with the products sold, or take other measures to promptly discover fraudulent returns.

3. The technical teams of major e-commerce platforms should strengthen the review of the buyer registration process, strengthen the review of the buyer's registered IP environment, browser environment, payment credit card information, etc., and establish a false information blacklist. If the information provided by the buyer during the registration stage is related to the blacklist, the buyer should submit verification information: credit card bills, utility bills, etc. for review. Timely close the buyer account with a high refund rate, especially the high unit price refund rate, and ask the buyer to provide a credit card bill to verify the authenticity of the buyer account.

4. You should work with the collection company to investigate and confirm the flow of funds from the fraudulent seller, see who the final withdrawal party of the funds is, and identify the final beneficiary of the fraud.

The platform reported the case to the Chinese police, and a joint investigation team was set up under the leadership of the police department. The team, including the third-party payment collection company, Walmart, and the police department, investigated the ultimate beneficiaries of the fraud and filed criminal charges in China to deter fraudulent sellers.

5. Major e-commerce platforms can collect evidence of platform fraud information through their official websites and forums in China, and then feedback to the Fraud Joint Investigation Team after collecting more evidence.

A fraud team was arrested, involving hundreds of millions of dollars

After careful understanding, we will find that the operating logic of multi-platform fraud is actually not complicated. If we are determined to stop it, the fraudulent sellers will be hit hard. However, the arrogance of fraudulent sellers and low-quality buyers seems to be constantly rising. Xiao Zhang is still "besieged" by the high return rate , and more and more Xiao Zhangs are facing fraud dilemmas. Which link went wrong?

It seems difficult to simply define who is right and who is wrong. As the industry moves forward rapidly, new situations emerge one after another. The standardization of the cross-border e-commerce industry has been in a state of continuous improvement . Fraudulent operations and other non-compliant phenomena are inevitable products of industry development. Have relevant supervision and crackdown measures kept up? As Xiao Zhang believes, the platform cannot be immune to the whole thing.

As the rule maker, the platform can indeed attract more buyers based on service policies that benefit consumers. Obviously, this also gives fraudulent sellers an opportunity to take advantage. We cannot unilaterally say that the path of benefiting consumers is completely wrong. On one side are buyers and on the other side are sellers. The e-commerce platform needs to strike the right balance.

The prevalence of fraudulent operations will also harm the interests of the platform in the long run.

The platform needs high-quality sellers to provide high-quality goods to supplement the platform product line, attract buyers to buy, and accumulate high-quality buyers who place orders on the cross-border e-commerce platform for a long time to lock in and ensure the continuous growth of platform traffic. Therefore, the platform needs a healthy ecosystem, which not only guarantees a good shopping environment for high-quality buyers, but also guarantees the legitimate rights and interests of high-quality sellers. It is undeniable that the platform has been dealing with fraudulent sellers and buyers through policies and technical means. From the actual situation, the efforts are far from enough. In terms of building a good and fair online shopping order, many cross-border e-commerce platforms still have a long way to go.

Fortunately, everything is moving in the right direction.

"American lawyers said that they have handled many similar cases. As the direct victim, we will definitely be able to recover our losses in the end, and we are now going through the procedures." Now, Xiao Zhang is communicating closely with the platform while also spending money to find a relevant lawyer to handle the whole matter. The matter has not been resolved yet, but the lawyer's words gave him hope.

Another person familiar with the matter said that some platforms have already paid attention to this matter and have taken some actions. In addition, a buy-back fraud team was arrested in March, involving a sum of several hundred million yuan, and a group of people were also arrested in April.

" Those who disregard business order and step on the red line in the cross-border circle will eventually face greater backlash. It is only a matter of time, " said Xiao Zhang.