Amazon allegedly scammed out of $370K by 22-year-old's return shipments of dirt
foxbusiness.com
foxbusiness.com
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.
When it arrived, it was clear the packaging had been opened (which I expected), but:
- the toilet seat had signs of handling
- it didn't work when installed
- the previous purchasers return note was in the box. IIRC they said the reason for return was that they changed their mind about wanting it
My guess is that they bought a replacement on Amazon, and fraudulently sent back their old non-functioning one in the new packaging.
Amazon gave me a refund without fuss.
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.
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.
I thought the money I saved for so many months was lost. But alas, I was finally playing Quake deathmatch in glorious 3D after some heartache.
He would go out and buy a new card, gently open the wrapper so that it could be melted back on with a heat gun, remove the card, replace it with something of similar weight, and reseal the package with a heat gun.
One time I ruined the wrapper on him and he had to take the item to Blockbuster. He made up some BS about it being a birthday gift that the wrong child opened and he needed to use the cellophane machine. It didn't work, and Best Buy wouldn't accept his return. That was one of the last times I saw him use that trick.
I also saw him sign up for a store credit card using someone else's social security information. His plan was to get approved, buy a TV, and then shred the card. Luckily for whoever SSN that was; their credit got denied on the application and he was unable to steal a TV.
Sorry to hear your Best Buy horror story, or to think that I saw that stuff go down. On the bright side my family member no longer engages in those types of transactions and mostly flies straight these days.
No judgement here. Pretty much everyone has done or is related to someone who does some sort of crappy thing(s).
“Swappy swaps” LOL
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.
I think Amazon has a data loss problem in their returns processing, and this guy accidentally stumbled upon a way to trigger it repeatedly. And he only got caught when someone opened a box, got mad, and went out of their way to track down who mailed it to them.
I don't really mind, though.
But then, where do the Amazon Warehouse deals come from?
To be fair Amazon actually sells bags of dirt, so if there is just a bar code and a bag of dirt then the person opening the box might not think anything of it.
Amazon sell literal dirt? Why? What does anyone buy that for?
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.
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.
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.
Some of the investors were old and they were just happy to have a relatively attractive woman founder.
The idea is great, everyone wants a lab on a chip. MEMS is coming, etc. Someone will eventually make it.
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.)
The in-depth investigation following the Challenger disaster [0] actually reached a slightly different conclusion: engineers tended to estimate ~1/100 launches would end in failure, while management estimates were about 3-6 orders of magnitude lower. The engineers did think it through; it was management that failed utterly and completely in their assigned task.
Anyway, I think your point is correct, but in this case it was management who learned that they could keep ignoring engineering expertise and get away with it until it literally blew up in their faces. Anyone who's had their boss urge them to rush bad code out the door (only to get chewed out when it fails as catastrophically as they knew it would) is familiar with this.
But I'm not sure I agree with your diagnosis. I suppose it depends on how one thinks of engineers and software developers. Are we professionals, like doctors, with a bedrock responsibility to society and our users? Or are we just very well-paid gofers, who do whatever the bosses say?
In my view, responsibility isn't a zero-sum game. Sure, the managers failed. But the engineers also failed, and in the same way the Amazon thief did: they had reason to suspect consequences were coming, but they hung around because it was rewarding.
I think this is partially a fault of engineers, and/or the development/project model. They were not able to clearly state that no, it's a no-go, or yes, it's a go, they had "concerns". But that is probably useless. Therefore the problem is they lacked the conceptualization framework, a risk model, to state the severity of their concern, what is it based on, and someone should have been able to aggregate it and determine how this estimated risk influences the mission's overall risk.
That said, it is entirely the management's fault that they lacked this critical expertise/competence to manage risk and the project, and the engineers. (And naturally some of those managers themselves were engineers.)
The typical reliable car fails to about as frequently as 1 in 10,000.
However, I don't entirely want to blame the workers. US business culture very strongly leans towards a sort of neo-feudalism, where the CEO is always right, where one's allegiance is to the company, and where there are many techniques for silencing people. E.g., when I got laid off from Twitter they gave me zero notice, and made any severance conditional on signing a nondisclosure and nondisparagement agreement that went much further than the one I signed when I joined.
I had good savings and no family, so I turned them down. But a lot of people can't do that. Personally, I think we should make that illegal, and have every NDA specifically exempt reporting malfeasance.
After all, nobody is claiming that the Amazon dirt scam had a positive effect on society. The question in this thread was whether the dirt scammer's decisions were individually personally rational.
Your bringing up Theranos does not seem to me (and probably does not seem to grandparent) to shed any light on this question because it might have been individually personally rational for someone to take a job at Theranos: none of Theranos's non-management employees were required to give back their salary after Theranos was discovered to have been a fraud.
And "individually personally rational" is a weird way to say "greedy sociopath who only cares about how much money was pocketed".
Amazon bans you very fast for high return rates like this.
>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...
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.
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.
I guess YMMV, but I feel like I’d spend much more time if I shopped around for alternatives.
I do. Been ordering from Amazon since the 90's - my total purchases have exceeded 5 figures USD for many years - and I don't think I need more than one hand worth of fingers to count the mistaken items I've received.
While for these scammers, it's a super lucrative business, their whole cost is no more than 1 dollar, that means they can make money as long as not every single order was refunded.
* 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.
Watch out for this one though, some delivery companies are just terrible at locating the real address and will send the parcel anywhere.
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?
In the OP case the product packaging was filled with dirt, which is not as easily discoverable without opening product packaging.
That’s one way to get seed funding I guess...
When I had an ecom company, a line worker used to check the package content and appearance (dents/scratches) and then he would measure it on a scale and check with the package's recorded weight before it was dispatched and algorithm would flag the orders where weight varied more than some specific ratio.
It was pretty rudimentary but worked at scale just fine.
Now, Amazon must also be using something like this.
Except now we have radar and 3D imaging.
Is Amazon actually involved in technology?
E.g. Being a petty armed bank robber isn't brilliant until you get caught.
I think it depends on how predictable the consequences are (it may be brilliant, or at least smart, to act in a way that offers a small possibility of an undesireable consequence in return for a large possibility of a highly desireable one), and on how long the time horizon is (it may be brilliant, or at least smart, to act in a way that offers certain undesireable consequences much later in return for certain desireable consequences for a long time before that). To overstate the objection, all actions eventually result in death, which is presumably undesireable.
https://en.wikipedia.org/wiki/Carlo_M._Cipolla
https://en.wikipedia.org/wiki/Carlo_M._Cipolla#/media/File:C...
Exactly, so the expectation value is net desirable. I wouldn't consider that stupid.