Return Fraud / Refund Abuse

Return fraud was documented by US retailers throughout the 20th century; the organised online 'refund-as-a-service' form first appeared on Telegram and Discord around 2019, with Artemis Refund Group operating from April 2019.

Return fraud is as old as the money-back guarantee; retailers were reporting 'wardrobing' (wearing and returning clothes) and receipt fraud in the 20th century, and the US National Retail Federation began surveying return fraud in the early 2000s. The modern, organised form appeared around 2019-2021 when 'refund-as-a-service' groups on Telegram and Discord began selling scripts, fake tracking numbers and social-engineering of retailer support desks so customers could get refunds without returning goods. Amazon, Walmart and Target were the main targets; groups such as Artemis Refund Group, Ressu Refunds, Simple Refunds and REKK were prosecuted in 2023-2025.

In the retail version, a shopper returns stolen, used or counterfeit goods, or uses a fake receipt, to get a refund or store credit. In the online 'refund-as-a-service' version, a customer pays a refunder (often 10-30% of the order value) who contacts the retailer's support desk pretending to be the customer and claims the package was empty, damaged or never arrived, or ships back a box of junk, or uses 'FTID' methods to manipulate the return label so the retailer's scanner accepts a fake return. The retailer refunds, and the customer keeps the goods. Some refunders bribe or recruit retailer employees to approve refunds internally.

It needs no technical skill - a refund service charges the customer a slice of the order value and does the talking - and retailers' generous, low-friction return policies mean most claims are paid automatically. Appriss puts one in seven US returns as fraudulent, yet prosecutions are rare and target only the organisers of subscription refund services, not their thousands of clients.

Fraudulent returns and claims cost US retailers $103 billion in 2024 (Appriss Retail, Dec 2024), the best published figure; the largest prosecuted online rings each caused single-digit millions (Ressu Refunds about $6 million). Non-money harm: retailers respond with shorter return windows, restocking fees and account bans that fall on honest customers, and retailer employees have been bribed into the schemes.