Florida Woman Arrested In Amazon Scam Involving 42,000 Returns

A Florida woman was arrested on a charge of Grand Theft after allegedly collecting $165,000 in fraudulent shipping charge reimbursements from Amazon.

In the arrest affidavit filed by the Hillsborough County Sheriff’s Office, it is alleged the woman used a loophole in Amazon’s shipping policy that made it appear she paid to return packages when she actually used old prepaid shipping labels from Amazon.

The affidavit claims the woman received $3.99 each in shipping reimbursements on 42,000 returns over 31 Amazon accounts she controlled. The scheme allegedly took place from March 2015 to August 2020 and was detected by Amazon systems.

Amazon referred its evidence to local authorities in Tampa Bay, Florida. On Tuesday, October 27, 2020, the Hillsborough County Sheriff’s Department arrested Hoai Thu Nguyen (aka Hoai Tibma) for Grand Theft.

“We thank the Hillsborough County Sheriff’s Office for their swift work on this case. We work hard to build a great experience for our customers and sellers and while we were able to identify and stop this scheme in our store, the support from the sheriff’s office helps ensure this fraudster is truly held accountable.” Amazon Statement

Remarkable Amazon Scam

While Amazon prides itself that its systems identified this fraud, this is still a remarkable number of returns before the fraud was detected.

In rough numbers (if averaged), this is still 1,300 returns per Amazon account over a five-year span. Or about 250 returns per year per account, just shy of about one return per business day per year.

While it appears Amazon always received the merchandise, it still boggles the mind on the sheer number of returns Amazon accepted, regardless of the alleged return shipping charges scam.

This begs the question, what defines a habitual returner at Amazon?

Supposedly in 2018, Amazon instituted a policy that the online retailer would ban habitual or serial returners.

Amazon does not disclose how it identifies serial returners, but by any metric, percentage of orders, or the total number of returns, one would think it should take thousands of returns before the company would take a look at what is going on with a buyer.

Amazon Fraud Detection Failure

If it took five years and over a thousand returns per account for Amazon to trigger a review, there are a variety of potential fraud issues that could easily remain undetected that could impact small business sellers on Amazon.

This alleged scheme seems to have had no or little impact on small business sellers, but hopefully will it trigger a review within Amazon why it took so long to identify such a problem.

While the company spun this news into a positive, it is ultimately a black eye for them and could potentially undermine seller confidence in the online marketplace to detect fraudulent returns.

Resource: Link to Hillsborough County Sheriff’s Office Press Release

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