Amazon Buyer Fraud Prevention: 10 Common Scams and How Sellers Can Stop Them

Are you worried you might become a victim of Amazon buyer fraud? Then read on to learn how you can avoid them!

Amazon buyer fraud has long been a significant issue for sellers on the platform, but recently, it has become an even greater challenge. While Amazon does provide guidelines and support to help sellers address these scams, these measures often aren’t enough to fully protect against the many fraudulent tactics used by scammers.

This is why Amazon sellers have to be aware of the different types of buyer scams they might encounter. In this guide, we’ll cover the most common Amazon buyer scams and share practical ways to avoid them. 

Together, we can help prevent these scams from disrupting your business and ensure a safer selling experience on Amazon.

What is Amazon Buyer Fraud and How Does It Impact Sellers?

Amazon buyer fraud involves deceptive practices by buyers to gain unfair advantages, often at the expense of honest sellers. These tactics range from abusing return policies to manipulating reviews, leading to significant financial losses and operational challenges for sellers.

A notable example of such fraudulent activity is the case of the group REKK, which defrauded Amazon of millions by purchasing high-value items, requesting refunds without returning them, and leveraging insiders to approve these fake refunds. This scheme not only impacted Amazon but also highlighted the severe consequences for sellers caught in the crossfire of these types of scams.

How Amazon Fraud Impacts Amazon Sellers

  • Account Health Damage
    Frequent fraud issues, like high return rates or negative feedback manipulation, can lead to warnings, and suspensions. This also harms a seller’s reputation, reducing product visibility and sales.
  • Decrease in Earnings and Profit Margins
    Fraudulent activities result in lost revenue from refunded amounts and unrecovered products, cutting deeply into Amazon sellers’ profits.
  • Inventory Management Hassles
    Fraudulent returns create inventory management disruptions, forcing sellers to make space for unsellable items, which affects their ability to stock new products.
  • Increased Operational Costs
    Combatting fraud requires additional resources, such as handling disputes and investing in detection tools, which raises overall operating expenses.

10 Types of Amazon Buyer Frauds and How Sellers Can Prevent Them

Despite Amazon’s significant investment in combating fraud—spending over $1.2 billion annually and employing thousands to protect its platform—buyer fraud remains a persistent issue.

For sellers, this means the next best line of defense is being vigilant. By understanding the various types of buyer fraud, sellers can take proactive steps to protect their business from potential scams.

Here are the ten most common types of Amazon buyer fraud and the strategies you can use to combat them effectively.

1. Return Scam

In this type of scam, fraudulent buyers exploit Amazon’s lenient return policies by purchasing products, using them, and then returning them for a full refund, often with a different or damaged item. This not only results in lost revenue but also poses significant challenges for maintaining inventory and account health.

A recent example involved a client whose business suffered from a damaging return fraud. A buyer returned a visibly stained diaper, exploiting Amazon’s lenient return policy.

The item was mistakenly relisted as “new” and resold, leading to a customer receiving the used diaper and posting a damaging review. Efforts to remove the review were challenging, further harming the seller’s reputation and sales.

This incident highlights how easily buyers can manipulate Amazon’s return system, leaving sellers on Amazon to bear the financial and reputational consequences.

How to prevent return scams:

    • Implement Clear Return Policies
      Communicate your return policies, including conditions for acceptable returns.
    • Thoroughly Inspect Returns
      Carefully check all returned items to ensure they match the original product and are in resalable condition.
    • Utilize Restocking Fees
      For high-value items, consider implementing restocking fees to discourage fraudulent returns.

2. Feedback Manipulation

Feedback manipulation is another common form of Amazon buyer fraud where buyers use threats or false claims to gain advantages, such as discounts, refunds, or free products. In some cases, buyers may threaten to leave negative reviews unless the seller complies with their demands, while others may leave false negative reviews or claim the item was “not as described” to harm the seller’s reputation.

This tactic can severely impact a seller’s account health, decrease sales, and damage product rankings, especially if negative feedback is not addressed promptly.

How to prevent feedback manipulation:

    • Maintain Clear Communication
      Politely refuse any buyer requests that violate Amazon’s policies, such as refunds in exchange for removing negative feedback.
    • Report Abuse
      Use Amazon’s “Report Abuse” tool to report buyers who attempt feedback manipulation or make threats.
    • Encourage Positive Reviews
      Focus on delivering excellent customer service to generate genuine positive feedback, which can offset any potential negative reviews.

3. Fake Refund Requests

Fake refund requests are a prevalent scam where buyers falsely claim that an item never arrived, arrived damaged, or did not match the description to receive a refund or a replacement without returning the original product. This type of fraud can be particularly frustrating for sellers, as it results in direct financial losses and potential inventory shortages.

How to prevent fake refund requests:

    • Use Tracked and Insured Shipping
      Always provide tracking information and consider requiring a signature for high-value items to prove delivery.
    • Keep Detailed Records
      Maintain comprehensive records of all transactions, including shipping confirmations and communications with buyers, to support disputes.
    • Use Fulfillment by Amazon (FBA)
      FBA can handle shipping and customer service, reducing the risk of fake refund claims.

4. Switch Fraud

Switch fraud occurs when a buyer purchases an authentic item and then returns a counterfeit or damaged version for a refund. This scam allows the buyer to keep the genuine product while the seller is left with a fake or unsellable item, resulting in financial loss and potential inventory issues.

How to prevent switch fraud:

    • Inspect Returns Carefully
      Verify that returned items match the original by checking serial numbers, unique identifiers, or other distinguishing features.
    • Use Tamper-Proof Packaging
      Packaging with security seals can deter buyers from switching items, making it easier to identify tampering.
    • Report Suspicious Returns
      If you suspect switch fraud, report the incident to Amazon Seller Support and provide evidence to support your case.

5. Coupon Fraud

Coupon fraud involves buyers exploiting promotional codes or discounts beyond their intended use. Scammers may use multiple accounts to repeatedly use a coupon or share discount codes publicly, resulting in significant financial losses for sellers and making marketing efforts counterproductive.

How to prevent coupon fraud:

    • Set Clear Terms and Conditions
      Clearly define the usage limits for promotions, such as one use per customer or one-time offers.
    • Monitor for Unusual Activity
      Keep an eye on your sales patterns during promotions to detect any suspicious or high-frequency purchases.
    • Use Unique Coupon Codes
      Distribute unique codes that are difficult to share or abuse, limiting exposure to fraud.

6. Unauthorized Reselling

Unauthorized reselling happens when fraudulent buyers purchase products from legitimate sellers and then resell them on Amazon without authorization, often at lower prices. These resellers may use deceptive tactics, such as selling counterfeit or tampered goods under the original brand name, exploiting the seller’s reputation and pricing, and ultimately deceiving customers.

A similar case happened to one of our clients, who struggled to remove unauthorized resellers that undercut their prices and used similar images, causing a significant drop in sales. Lacking distinct branding, the client faced challenges in getting Amazon to remove these hijackers from their listings.

How to prevent unauthorized reselling:

    • Leverage Branded Packaging
      Update your main product images to include branded packaging that prominently displays your brand name. This discourages hijackers who can’t replicate the packaging and makes it easier to report them to Amazon.
    • Monitor Listings Regularly
      Keep a close eye on your product listings to spot unauthorized sellers quickly and take action.
    • Report Unauthorized Sellers
      Use Amazon’s tools to file complaints against unauthorized resellers and provide evidence, such as order screenshots, showing differences between the listing and the received product.

7. Gift Card Fraud

Gift card fraud is a scheme where buyers use stolen credit cards to purchase Amazon gift cards, which they then use to buy products or resell for cash. This type of fraud leaves sellers vulnerable to chargebacks, where they lose both the product and the sales revenue, causing significant financial damage.

How to prevent gift card fraud:

    • Use Payment Verification Tools
      Employ tools and services that flag suspicious transactions or require additional verification for high-value purchases.
    • Set Purchase Limits
      Limit the number of gift cards or high-value items that can be purchased in a single transaction.
    • Monitor Transaction Patterns
      Regularly review sales reports to identify unusual purchasing behaviors that could indicate fraudulent activity.

8. Multiple Account Abuse

Multiple account abuse occurs when a single buyer creates multiple Amazon accounts to exploit promotions, discounts, or return policies. This fraud tactic allows the buyer to circumvent restrictions meant to limit benefits to one per customer, leading to skewed sales data and increased costs for sellers.

How to prevent multiple account abuse:

    • Monitor Unusual Buying Patterns
      Use analytics tools to detect multiple purchases of the same item or promotions coming from similar IP addresses or shipping addresses.
    • Set Limits on Promotions
      Clearly define and enforce limits for promotions and discounts to prevent repeated abuse.
    • Require Verification
      Consider requiring additional verification for high-value orders or promotional use, like two-factor authentication, to ensure genuine buyers.

9. Credit Card Chargeback Fraud

Credit card chargeback fraud, also known as “friendly fraud,” occurs when a buyer makes a legitimate purchase but later disputes the charge with their credit card company, falsely claiming that the transaction was unauthorized or that the product never arrived. This results in a chargeback, where the seller loses both the product and the payment, along with incurring additional fees.

How to prevent credit card chargeback fraud:

    • Maintain Detailed Transaction Records
      Keep comprehensive records of all orders, including shipping confirmations and communications with buyers, to provide evidence in case of disputes.
    • Use Secure Payment Processing
      Choose payment processors that offer robust fraud protection and regularly review chargeback cases for patterns.
    • Respond Quickly to Disputes
      Act promptly when a chargeback is filed, providing all necessary documentation to challenge the claim.

10. Fake Product Reviews

Fake product reviews are a form of buyer fraud where competitors or malicious actors post false reviews—often negative—to harm a seller’s reputation, decrease their product rankings, and ultimately drive down sales. These reviews may come from accounts that systematically leave poor ratings or from services that offer “review bombing” for hire, targeting primarily U.S. and U.K. sellers who may be less likely to know how to counteract them.

How to prevent fake product reviews:

    • Identify Suspicious Review Patterns
      Look for reviewers with numerous one-star reviews or accounts with a history of leaving only negative feedback. These are often signs of bad actors.
    • Report to Amazon
      File a report through Seller Central by providing specific details, such as review links, buyer profile links, and any other relevant information. Use the “Report Abuse” tool and select “Another seller account is attempting to harm my business”.
    • Send a Cease and Desist Notice
      Contact the suspected fake reviewer through Amazon, and if possible, send a formal cease and desist notice to deter further actions.

Frequently Asked Questions About Amazon Buyer Fraud

How to Deal with Customer Fraud?

If you suspect customer fraud, especially with FBM orders, it’s crucial to follow these steps:

  • Request the Return: Instruct the customer to return the item to a designated address, and provide a pre-paid shipping label with tracking for expensive items.
  • Document Everything: Keep records of all communications, shipping labels, and any items received. If the customer returns an incorrect or damaged item, provide a partial refund and document the evidence.
  • Handle A-to-Z Claims and SAFE-T Claims: If the customer files an A-to-Z claim with Amazon, prepare to submit a SAFE-T claim by providing all documentation that proves the item was not returned or was returned incorrectly. Clearly state the problem and the resolution you seek to Amazon.
  • Be Persistent: Amazon often sides with buyers, so maintain thorough documentation, be proactive, and follow up regularly to ensure your case gets the attention it deserves.

These steps can help you contest fraudulent claims and improve your chances of a favorable outcome.

How Do I Report Buyer Fraud on Amazon?

Go to Amazon Seller Central and navigate to the "Report Abuse" section. Provide all necessary details, such as the buyer's profile link, order IDs, and specific evidence of fraudulent activity. You can also file a case with Seller Support to escalate the issue and seek further assistance from Amazon's team.

How Can I Prevent the Unauthorized Reselling of My Products?

Start by adding your brand name or logo to your main product images to discourage hijackers. If unauthorized sellers persist, contact them directly through Amazon's messaging system with a cease and desist notice.

Additionally, purchase their products to collect evidence of counterfeit goods, and file a report with Amazon through the Brand Registry portal, providing the ASIN, URLs, and seller information. Regular monitoring and proactive measures can help you maintain control over your listings and protect your brand. 

Protect Yourself Against Scams on Amazon: Combatting Amazon Buyer Scams

Amazon buyer fraud continues to be a significant challenge for sellers, affecting everything from profit margins to account health. Despite Amazon’s efforts to combat these scams, sellers must remain vigilant and proactive in protecting their businesses.

By understanding the most common types of buyer fraud, sellers can better prepare themselves to identify and prevent these tactics. Implementing the right strategies can help minimize the impact of fraudulent activities.

Staying informed and taking swift action when scams occur is key to safeguarding your business and ensuring a successful and sustainable presence on Amazon. Remember, awareness and proactive measures are your best defenses against buyer fraud.

Do you need help to protect your Amazon business? Get expert help from our Amazon agency today!

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Ken Zhou - Amazon Strategist

Ken Zhou, Chief Operating Officer

Hi I’m Ken, COO at My Amazon Guy, a high-performing operations team driving business growth through strategic leadership, sales excellence, and process optimization. We scale companies, streamline processes, and deliver significant revenue growth through innovative marketing strategies and scalable solutions.

Reach us at +1 470-623-1951 Monday to Friday, from 9:00am to 5:00pm EST.