SCAMMING AMAZON: It’s no secret that people aren’t exactly
fans of big tech.
They don’t like Facebook, they don’t like Google, and they especially don’t like Amazon.
Usually, the primary critique against Amazon is the way they run their business.
Amazon has become infamous for cutthroat rules and miserable working conditions.
Their drivers often have to pee in bottles while their warehouse workers are often left
with chronic pain.
This is why many Amazon warehouses have turnovers rates that are over 100%.
Amazon has never really worried too much about this as they’ve found that high turnover
is actually a good thing at warehouses.
It turns out that people are usually more motivated and productive when they get a new
warehouse job than they are a few months in.
So, it’s actually in Amazon’s best interest to keep things churning as long as there’s
enough people to churn through of course.
Hearing all this, I’m sure most of you have some level of distaste for the meat grinder
that is Amazon.
But, many of our peers have actually been taking this distaste to the next level.
They’re not just complaining about it on the internet or advocating for unions.
Instead, they’re actually stealing from and defrauding Amazon.
The worst offenders rack up stolen merchandise in the hundreds of thousands of dollars and
even over a million dollars.
While these are the people who make the news, there are tens of thousands and maybe even
hundreds of thousands of everyday people who pulling off the same scam on a much smaller
basis.
These guys usually have $500 or a $1000 worth of stolen merchandise.
So, here’s exactly how people have been stealing from one of the largest companies
in the world.
RETURN SCAM EXPLAINED: Getting straight into it, the overview of
the scam isn’t all that hard to understand.
Essentially, people have been abusing Amazon’s generous return policy to get unjustified
refunds on products.
While simple in nature, there’s actually a bunch of nuances that are involved in making
this scam work because Amazon is of course not stupid.
They’re well aware of this scam and they’re constantly tightening their procedures and
protocols to minimize its occurrence.
Nonetheless, many everyday people are still benefiting from this scam thanks to the existence
of full on scam businesses.
I’m sure you’ve heard about the classic gift card scammers that will email you or
call you pretending to be Apple, Amazon, or Microsoft.
They’ll usually tell you that your computer has some sort of virus, and that you need
to pay them in the form of gift cards to fix it.
If you’re interested in the innerworkings of these scams, I would recommend that you
check out Jim Browning’s videos on them.
But, anyway, some of these scammers have switched strategies.
Instead of scamming everyday people, they’ve pivoted to helping everyday people scam Amazon.
Usually, they’ll set up a discord community that’s filled with a couple of scammers.
Then, they’ll go out and discretely promote their servers online.
Really, they don’t need that much attention, they just need 5 or 10 people to join up.
From there, the servers usually grow through word of mouth.
Once these 5 or 10 people get products for a super low price, they often tell their friends
about it, and within no time, these servers end up boasting thousands of users.
All these users have to do is tell the scammers what product they want and the scammers will
get it for them for a 70 or 80% discount.
Usually, the scammers will start off by creating a fake amazon account on your behalf.
From there, they’ll use gift cards or stolen credit cards to order a bunch of merchandise
to an AirBnB or some sort of temporary address.
Nowadays, almost all the couriers take pictures of the delivered product, so these scammers
often meet the delivery drivers outside the AirBnB to prevent them from taking a picture.
This makes it especially easy for them to turn around and convince Amazon that the product
was never delivered and get a refund.
From there, they’ll ship it to the discord member who requested the product and the scammers
will keep the 20 or 30% that the member did pay for the product.
This strategy generally only works on cheaper products though.
When it comes to more expensive products, the scammers have to turn to a different strategy.
The first part of the scam works exactly the same.
They’ll use a fake account and fake credentials to order a product, but this time, they wont
try to convince Amazon that the product wasn’t delivered.
Instead, they’ll take the product, replace it with a fake counterfeit and return it.
This scheme is especially common with Apple’s AirPods Max.
The stickerprice of the headphones is $550, but you can buy an extremely convincing replica
for just a $120 on Alibaba which is about 22% of the price.
This gives the scammers plenty of margin to give the discord member a 60 or 70% discount.
And that’s exactly how they pull off this scam.
THIS IS MESSED UP: Throughout the pandemic, this scam has exploded
in popularity especially amongst college students and broke young adults.
But, for obvious reasons, engaging in this scam is a horrible idea.
First of all, there’s the whole moral dilemma.
You’re essentially stealing products from Amazon and/or Amazon sellers.
Given that most people go to discord scammers and get them to do the dirty work, this is
obviously not something that they’re willing to do themselves.
And if you can tell that something is unethical to do yourself, you probably shouldn’t be
getting someone else to do it for you.
Some of these people like to argue that they’re just getting back at the evil trillion dollar
corporation that is Amazon, but this is just an excuse to justify their actions.
Really, they’re not getting back at Amazon at all.
If anything, they’re making the lives of Amazon employees even worse.
Here’s the thing, what do you think Amazon is going to do if a delivery driver racks
up a record of quote on quote “lost deliveries”.
They’re obviously going to fire them.
Not to mention, the cost of stolen products usually end up coming out of the paychecks
of Amazon employees.
While Amazon gets a lot of slack for not paying employees enough, the truth isn’t that Amazon
doesn’t want to pay employees more, it’s that they simply cannot afford to pay more.
Yes, Jeff Bezos is one of the richest people in the world, but all of that is stock value.
When it comes to actual cashflow, Amazon literally has negative cash flow.
For decades, they’ve been using AWS to subsidize their retail business which has basically
never been profitable.
With that being said though, Amazon has never really strived for profitability either.
They’d rather just maintain a breakeven income statement and reinvest everything into
new warehouses, logistics channels, and of course employees.
And the people who are stealing from Amazon are directly preventing this from happening.
Now, you may not think that this would make that big of a difference, but that’s completely
false.
In 2021, a record $761 billion worth of merchandise was returned.
And out of this, a whopping 10.3% of returns were fraudulent.
That translates to $78.3 billion every single year, and that’s just the ones that are
caught.
The good scams go completely undetected, so the percentage of fraudulent returns is probably
closer to 15 or 20%.
But, even if we assume 10%, this works out to billions of dollars per year for Amazon
alone.
The average Amazon return rate stands at 5 to 15% depending on the category and season.
We can just estimate in the middle and call it 10%.
If 10% of Amazon orders are returned and 10% of those returns are fraudulent, Amazon is
being defrauded on roughly 1% of their top line revenue.
In 2021, Amazon had net sales of $279 billion in North America and $127 billion internationally
which adds up to a total of $406 billion.
Now, that’s net sales meaning that it already accounts for the revenue loss due to returns.
This means that their top line number was roughly $450 billion.
Using our fraud estimate of 1%, Amazon lost approximately $4.5 billion last year due to
return frauds and stolen goods.
And there’s only two ways that Amazon can pay for this.
They can either increase prices or decrease salaries.
And given their history, we know that they’d rather decrease salaries than increase prices.
Currently, Amazon has a total of 1.6 million employees.
If this money had gone towards their paychecks, each and every one of them could have earned
an extra $2800 last year.
It’s not just Amazon employees that are being hurt either.
Random customers and sellers are also feeling the pain.
First of all, some random person is going to become a victim of credit card fraud.
After that, once the douchebag scammer returns the fake pair of AirPods Max, it’s more
than likely that some other Amazon customer is going to end up with that junk even though
they paid the full $550.
When they realize this, they’re gonna have to call Amazon and explain the situation,
and Amazon is probably going to turn around and flag the sellers account and the customer
will probably go leave a terrible review.
And if this happens a few times, Amazon will probably ban the seller thinking that they're
a counterfeit product seller.
So, in the end, you’re left with Amazon employees who are getting the short end of
the stick, you have victims of credit card fraud, you have customers with fake products
and a nightmare buying experience, and you have a seller who just lost their small business.
And all of this is just so that some broke losers across the country can flex to their
friends with products that they can’t afford.
When you think about it, it’s really quite messed up.
A SPREADING PARASITE: The worst part of all of this is that this
scam is no longer unique to Amazon.
Virutally every retailer has gotten into the online game and they’re all dealing with
the same issue whether it be Best Buy or Gucci.
This scam is even starting to spread into other industries as well such as food and
grocery delivery.
This server, for example is offering 80% off on grocery delivery and 55% off on food delivery.
To accomplish this, the scammers just charge the entire amount onto a stolen credit card
number.
And, it’s up to the fraud victim to file for credit card fraud and get a refund.
Usually, the refund is issued by the credit card company or the food delivery app.
Fortunately, the delivery driver still gets paid for the delivery even if the order is
refunded in most cases.
But, once again, someone has to pay for this.
Usually, this just leads to higher prices across food delivery apps and the apps taking
a larger portion of the revenue from both the restaurant and the driver.
If the credit card company fronts the cost, you have a similar conundrum.
They’re gonna try to make this money back by raising their 23% interest rates to 25%.
And given that the average American has nearly $6000 in credit card debt, these scammers
aren’t doing the country any favors.
The worst part about all this is that this scam is only possible because of us.
Traditional scams just require a scammer and a victim.
But, this scam requires, a scammer, a victim, and a customer.
Without a customer, it cannot operate.
And these customers aren’t random people in third world countries.
These customers are our neighbors, our classmates, our friends, and it might even be you.
Also, it’s not like these people are stealing for survival either.
After all, they’re not stealing a loaf of bread or eggs.
Instead they’re stealing high value tech products like computers, laptops, and phones.
Or they’re stealing convenience services that they don’t want to pay for like food
and grocery delivery.
And in the end, how can we honestly criticize these big tech companies and evil businesses
when many of our peers are engaging in the same activities when given the opportunity.
Now, I’m not suggesting that we should let the big companies off the hook.
I’m just suggesting that we should try to clean up our side as well, but that’s just
what I think.
Were you familiar with this scam?
Comment that down below.
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