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It is learned that on August 29, the U.S. Attorney's Office released a message that a 40-year-old Chinese man from Los Angeles, Ting Hong Yeung, was sentenced to 18 months in federal prison and paid millions of dollars in compensation on the same day . The charge was that he repeatedly used the online payment system to commit fraud on the Amazon platform . ▲ The picture comes from the official website of the U.S. Department of Justice It is reported that Yeung's fraudulent behavior began in 2015, and he made more than 1.3 million US dollars in seven years . Even after Amazon discovered his illegal behavior and banned his store, he still refused to change his ways, which eventually attracted the attention of the FBI. Exploiting platform loopholes to defraud compensation Sellers are probably very familiar with the rules of the Amazon platform: when consumers purchase goods from FBM sellers, Amazon will credit the purchase amount to the seller's internal platform account, and every two weeks Amazon will pay the seller's bank account. As long as the seller can provide the shipping tracking number, the sales of this part of the order can be recorded. However, Yeung provided Amazon with a false tracking number , but did not actually ship the goods. When buyers complained that they had not received the goods and initiated a refund, Yeung began to implement a "delay tactic" until Amazon transferred the sales amount to his bank account. Sometimes, he would send cheap crystal jewelry instead to generate a tracking number and prevent buyers from complaining midway. According to reports, Yeung used three business names on Amazon, "Speedy Checkout", "Special SaleS" and "California Red Trading Inc", mainly selling furniture and household goods. In the early stage, Yeung would carefully operate the store for a period of time. After accumulating a certain reputation for the store, Yeung would sell the goods at a reduced price, thereby greatly increasing sales and running away with the money . In the end, Amazon had to refund the consumers on behalf of Yeung because of the A-to-z refund policy. Not only that, Yeung also often stole other people's credit card information, used fictitious identities to buy expensive products in other stores, and then forwarded similar cheap products to buyers who placed orders in his own store . He then applied for a refund and compensation from other stores on the grounds of poor quality and mismatch of the goods. In the end, he received both the refund and the sales money, earning twice the illegal profit. This type of fraud, which involves forging shipping numbers or getting goods for free, was prevalent in the past. As Amazon began to take it seriously and contacted local police, the fraud gangs were arrested one by one. Multiple e-commerce fraud gangs around the world arrested It has to be said that no matter whether it is legitimate business or taking crooked paths, Chinese people have endless tricks. In China, a self-directed and self-acted refund scam also revealed the truth. 1. A domestic gang defrauded the Australian site of 5 million yuan in refunds At the beginning of this year, according to the prosecution of the Xiamen Siming Court, a man named Zhou and his accomplices took advantage of loopholes in the Amazon Australia site and defrauded a total of 4.95 million yuan in refunds paid by the Amazon platform from 2019 to 2020 . It is reported that Zhou uploaded low-priced goods through merchant users, and other people manipulated buyer users to buy these low-priced goods in large quantities. After the order was successfully placed, a false express delivery number was uploaded to forge a successful transaction record. Then, through the buyer's account, a request for return was made for reasons such as product quality problems , and a maximum refund amount of 1,000 Australian dollars was applied for each item. While applying for a return, Zhou reported the bank card bound to the seller's account lost, making it impossible for Amazon to ask for a refund from the seller's account. Because the platform rules only allow sellers to advance refunds to buyers, little did they know that the transaction between the buyer and seller was actually a "double act" by a group of people. 2. Spanish gang resells Amazon products and makes 500,000 euros It is learned that according to foreign media reports, on July 21 this year, the Spanish National Police cracked the country’s largest Amazon fraud case, and the mastermind Carlos and 24 accomplices were arrested. The Carlos gang's routine is relatively simple: after placing an order on the Amazon platform, they demand compensation from the platform on the grounds that the product is defective. However, in fact, these products are not defective, and the scammers did not return these products, but put them on the second-hand trading platform for sale. It is reported that the gang registered nearly 500 false profiles and 400 virtual credit cards to purchase electronic products such as smart computers, and the final amount involved exceeded 500,000 euros . The police also revealed that the main culprit Carlos had no criminal record and had degrees in law and business administration. It is not difficult to see that the frauds that have occurred repeatedly in the past often exploit loopholes in Amazon's return policy. The return rules that were originally formulated to provide better services to buyers have become a boost for criminals. However, Amazon did not cancel the non-return and refund policy, but instead strongly promoted it. What is the reason? What are the advantages of non-return refunds? As early as 2017, when Amazon added the concept of non-return refunds to its refund policy, it was criticized by many sellers who accused it of encouraging buyers to "get free stuff". Years later, although the policy is still controversial, some sellers' views have changed. Non-return refunds are not just a policy that serves buyers, but in some cases are also very beneficial to sellers: For some sellers of products with low average order value, the labor, warehousing and logistics costs of cross-border returns far exceed the value of the product . In addition, some categories still need to undergo quality inspection before they can be resold. In many cases, sellers would rather customers keep the products than process returns . 2. Improve customer relationships In the case of normal returns, printing shipping labels, sending the items, and waiting for customers to return the items will take several days, which may give customers a negative impression of the store and lead to bad reviews. Refunding without returns can fundamentally solve customer dissatisfaction. 3. Establish brand image Word of mouth is a very effective way to gain brand awareness. Non-return and refund will make more consumers pay attention to the brand's services . Although there will be certain cost losses, it can also encourage more people to buy brand products. Editor's note: Amazon's no-return and no-refund policy is a double-edged sword. On the one hand, it opens the door to fraud, but on the other hand, it also solves the problem of return costs for most sellers. Sellers can choose whether to use this feature based on actual conditions.
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