
Amazon allegedly scammed out of $370K by 22-year-old's return shipments of dirt - Vaslo
https://www.foxbusiness.com/retail/amazon-dirt-scam-22-year-old
======
eco
I just ordered a MyQ garage door hub from Amazon Warehouse (listed as missing
or damaged original packaging). When I opened it up it felt a little off. The
protective film on the device had obviously been removed and reattached and
nothing fit very well in the designated slots in the packaging. The device
itself had faint scratches and dust on it.

I decided to check the model number and sure enough, it was the previous
model. Someone had obviously ordered the new model (presumably because the new
one gained support for Apple HomeKit) then stuffed their old one in the box
and done a refund through Amazon.

Amazon handled it fine and I got a replacement that was correct but now I'm
pretty skeptical of how Amazon processes the returned items they place up for
sale again.

~~~
irrational
Similar experience with a sawhorse. It was clearly a used item when I opened
it. I got a replacement no problem, how is it more cost effective to pay
shipping twice than to pay someone to check it once?

~~~
JakeTheAndroid
The people that process the returns make next to nothing and run off a script
of yes/no and anything weird gets escalated.

A Q/A person to validate a range of products for authenticity (or at least
more so than now) likely costs more per hour.

They have their supply chain so efficient, it's likely very cheap for them to
move physical items across the globe.

~~~
ldoughty
It would cost them $20/hr per validator (burdened).

If only 5 items an hour are bad returns, that's $4 per item identified.

It's likely cheaper to have you, the customer, do the valuation because you
might not even realize the issues... And if you do, you might be too lazy to
return it. Which further let's the value of hitting a validator.. so the
employee would now be to probably find twice as many bad returns per hour for
the company to break even.

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hn_throwaway_99
This is so bizarrely stupid, but it does lead to some questions:

1\. What did this man _think_ was going to happen? That Amazon would never
open the boxes he returned? Certainly after 370k worth I'm surprised he didn't
get flagged much earlier.

2\. What normally happens to Amazon returns? The article makes it sound like
they are rarely opened. That seems bizarre to me. I would have thought they'd
have a system for processing returns.

~~~
wpietri
> What did this man think was going to happen?

I think you're giving him too much credit. People try things. They repeat the
things that work. Most thinking happens when the behavior stops working.

That's why long/broken feedback loops in systems are so dangerous. E.g., a big
reason the Challenger disaster happened is NASA ignoring warning signs because
they had gotten away with it before. If a zillion NASA engineers didn't really
think it through when lives were on the line, it's no surprise some 22-year-
old rando just kept doing the thing that worked.

Another good point for comparison is Theranos. How many people with advanced
degrees worked there without ever catching on to how screwed they were?
Without ever really verifying that it was a successful business that actually
produced value for its customers? And that's just the obvious fraud. I've seen
many insider stories here about startups that were only slightly less dubious.

~~~
dmix
> Theranos. How many people with advanced degrees worked there without ever
> catching on to how screwed they were?

Tons of people inside Thernos asked questions and then eventually left when
they realized there was no answer. Especially the smart guys at the top who
knew the most.

The book said the securty guy described an almost constant flow of people
turning in their badges/fobs from getting fired by the Balwani guy. The team
was constantly losing talent and replacing them... but they always had enough
money, reputable backers, and positive PR to fool the rest and attract more.

Any lively business community with plenty of easy money floating around will
attract a scammy subset. That's a human problem, not one unique to startups.
Finance has plenty too, as does fracking, just like biotech did with Theranos.
And it's a problem largely accounted for by established VCs as it's always a
risk.

~~~
wpietri
Sure, but there were also plenty of people who didn't leave.

And honestly, I think VCs are another good example of the problem here. They
are notorious for being herd animals. They celebrate "pattern matching", by
which they mean repeating the behaviors that previously led them to make
money. If investors were all that good at thinking things through, they
wouldn't have burned $1.4 billion dollars on Theranos.

~~~
pas
There was always a chance that they make it. Every startup is just a nice
wish, maybe a few good ideas, plus hopefully lucky and competent folks mixed
with some money.

The idea is great, everyone wants a lab on a chip. MEMS is coming, etc.
Someone will eventually make it.

~~~
wpietri
There was never a chance that Theranos would make it, because, per POSIWID,
the purpose of Theranos was not to make it. Anybody who talked like you did
was fooling themselves because they liked the paychecks. Just like the Amazon
thief.

~~~
pas
What? Just throwing in some "systems thinking buzzword" is not a real
argument.

I'm not aware we have definitive evidence that Theranos was intended to be a
scam all along. So if it wasn't then it was intended to make it, no?
Naturally, you can say that there was a tipping point, when they started to do
the scam more than anything else. But that's not exactly the fault of the
investment model, nor the fact that there's a big push to get microscale labs,
because currently there's no consensus about it's impossibility (quite the
contrary, though it's obviously quite a big challenge), so it makes sens to
invest into a company that tries to do it.

Now, being inside and compromising one's integrity for paychecks is a
different matter. On the one hand there are people in hard situations that
change their thinking - but it's unlikely that qualified people were stuck
there against their better wishes. On the other hand trying to get investors
to choose you when every other company is also doing their very best to
convince the investors leads to the usual fucked up borderline-lies /
overpromises / demos (see also ghettotesting, see also MagicLeap.

I'm not trying to advocate somehow "overlooking" Theranos' misdeeds. I'm
simply stating the obvious, that there was a chance. (After all, they got the
money, the people, the vision. I also don't condone how they got the money,
even if, as I mentioned, it's hard to get money while honesty is not exactly
rewarded.)

------
Jerry2
The first article that reported this [1] has way more info on what he did with
the money and how he fenced it and how he was caught (this is auto-translated
so I have no idea how accurate it is since I don't speak spanish):

> _The scam didn 't end there. So many times they repeated the scam, which
> were made with a huge amount of electronics. They could keep them ... or
> they could further stretch the deception. And that's what they did. James
> set up an online sales company. A kind of Wallapop to which he named
> Kwartech, a fusion of his surname Kwarteng and the word tech (technology in
> English). They founded a Limited Company that served to sell the merchandise
> online. They offered unused products, but without a package (which was back
> in Amazon full of land, a fact that they did not tell their customers) and
> at a very reduced price._

> _The Barcelona police began the investigation, which immediately passed to
> the Group of Technological Crimes of the Upper Balearic Headquarters. Agents
> arrested them both last week. They have passed to judicial disposition and
> have left free with a deposit of 3,000 euros. They are on the street,
> waiting for the final trial ... and with their Amazon accounts closed. And
> is that between James and Juan have hit the biggest stick that has ever been
> given to Amazon in Europe._

[1] [https://www.elespanol.com/reportajes/20190723/estafo-
james-a...](https://www.elespanol.com/reportajes/20190723/estafo-james-amazon-
devolvia-recibia-reembolso-vendia/415709507_0.html)

------
hangonhn
I've encountered another scam regarding Amazon returns where the seller would
ship from overseas. The item I ordered would be nothing like the description.
So I filed for a refund and the seller was like "sure, here's the form and you
can pay for shipping". As you can imagine because of the postage rates
differences, it was a lot more expensive for me to send it back vs. the cost
to them to ship to the US. In fact the shipping cost was almost the cost of
the item.

I contacted Amazon customer service and they issued me the refund without
requiring me to send anything back but I wonder how many people just gave up.
Amazon's customer service is a huge part of the reason I order so much through
them. I feel comfortable buying things off of Amazon and has never had to "eat
the cost" of shady sellers.

~~~
Trias11
>> Amazon's customer service is a huge part of the reason I order so much
through them.

Do i have time to go through multiple cycles of "get crap / return" until i
get item I ordered?

That's why I check more reputable stores first such as B&H first before
succumbing to AMZN hit-n-miss-n-get-refund store.

~~~
ryanlol
This comment would make much more sense if AMZNs fuckup rates were much
higher.

~~~
hcknwscommenter
I don't think the point is about AMZN "fuckup rates" or "mistaken items" it's
about outright fraud. I've received a fairly high percentage of just outright
fake or broken stuff. Maybe I bargain hunt a bit too much . . . .

~~~
ryanlol
I’d estimate that I need to complain about approx 1% of the stuff I order from
amazon.

I guess YMMV, but I feel like I’d spend much more time if I shopped around for
alternatives.

------
bArray
My family run a business that partially operates through eBay and this kind of
crap happens to them quite regularly. They get variations of:

* Returning (literal) rubbish to make up the weight

* Returning the parts when they break them trying to use them

* Returning the old parts they are replacing with the new parts they purchased

* Returning parts they didn't check before purchasing and getting a full refund (including postage), by claiming the item wasn't as described

* Claiming the parcel wasn't delivered, despite the courier company having a signature showing it was (one trick they use is to make sure the parcel is delivered to a neighbour)

The worst part? There is no method to fight this. Neither eBay, the delivery
companies or PayPal will take responsibility for the costs, despite claiming
they do. It doesn't matter what evidence you submit (pictures, videos, third
part testimony, etc), the result is the same. The "funny" part is that some
items they refuse to deliver without insurance (which has to be with them) and
then when you go to claim, it's not possible.

The delivery companies are also great to deal with:

* Parcels arrive broken despite adequate packaging (for example, somebody has run over the item with a fork lift)

* Parcels get lost despite purchasing tracking - you phone them up and they have zero idea where the parcel went

As somebody who gets parcels delivered, occasionally the delivery companies
will deliver the item with some tape showing that it's broken. Their advice is
not to accept the item, which only works when you're actually in - but then if
you are, they refuse to send the item back anyway. This is because the
delivery drivers only get paid for delivered items, so it's the end-courier
that gets screwed.

Anyway, my point is that somebody like Amazon who mostly acts as a trading
platform these days and facilitates this crap that sellers have to put up with
- I really don't feel sorry for them.

~~~
DanBC
> * Claiming the parcel wasn't delivered, despite the courier company having a
> signature showing it was (one trick they use is to make sure the parcel is
> delivered to a neighbour)

Watch out for this one though, some delivery companies are just terrible at
locating the real address and will send the parcel anywhere.

~~~
bArray
For sure. It seems to be particularly bad when the parcels go international
and the courier companies don't communicate particularly well. Trying to keep
things tracked when the parcel goes abroad is difficult (because you also have
to deal with customers asking "where is my parcel now?").

------
WheelsAtLarge
Things must have changed lately. I returned a set of DVDs and forgot to
include the cover and got dinged for over half the cost of the item almost as
soon as it was received by the warehouse. I guess I got lucky since they could
have charged me for the whole price. But now a guy is sending dirt and he gets
full credit. Wow!

~~~
anoncow
Amazon, I believe, checks for the weight of the package to ascertain if the
contents are what they were supposed to be.

~~~
zaroth
A missing DVD cover discovered by a weight discrepancy?

Who’s to say it was returned in the original envelope?

Perhaps more likely the extremely light items weight is hidden in the variance
of the return packaging weight and so those packages have to be opened?

~~~
AnssiH
A missing cover sounds like it would be visible without opening the product
packaging (which would be the cover itself, no?), i.e. they can easily notice
the omission by comparing the returned item against a reference image.

In the OP case the product packaging was filled with dirt, which is not as
easily discoverable without opening product packaging.

~~~
zaroth
Ah, they open the shipping envelope. They don’t open the product box itself.
Of course.

------
carlosdp
“The report states the success of the alleged scam by Kwarteng, who has been
released on bail, enabled him to create his own company.”

That’s one way to get seed funding I guess...

~~~
88j88
This was my favorite part of the article. It honestly reads like somehow what
he did was a brilliant business idea, but incidentally was illegal

------
rahulsom
I'm curious why Amazon didn't investigate what was happening until his returns
totaled $370k.

~~~
gen3
I'm curious how it even totaled 370k. Returning enough items to get that high
should set off alarms!

~~~
quickthrower2
Forget returning that much. Even just spending that much at Amazon to begin
with should set off an alarms, e.g. is this a stolen card? money laundering?

~~~
gingabriska
No way, I've spent that much on Amazon and I buy nearly everything on Amazon.
Pretty sure there are many others who shop at that level or beyond.

~~~
quickthrower2
You could buy a house with what you’ve spent on Amazon!

------
morpheuskafka
This the kind of thing you could probably get away with once or twice... I
don't know why he thought he could get away with it for hundreds of thousands
of dollars.

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taneq
This is why we can’t have nice things.

~~~
dfcmt
Sounds like a shitty platitude but yeah, this is why I fear Amazon will
eventually reconsider their returns policy.

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jpswade
Reminded me of this guy who got rocks instead of a camera...

[https://youtu.be/DXPnOq-XJg8](https://youtu.be/DXPnOq-XJg8)

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qwsxyh
absolute legend tbh

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throwaway3627
Retail is a _dirty_ business.

------
algaeontoast
Wow, this is brilliant.

~~~
i_am_nomad
Presumably you are being sarcastic? There was no way he wasn’t going to get
caught eventually.

~~~
algaeontoast
Found a member of HN who can perceive humor, +1 for you my friend ;)

------
RenRav
Good on this guy. If you don't bother with or are just incapable of verifying
returns, you shouldn't be selling anything. If a normal person tried running
their business that way they would be ruined.

