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Comment by 55555 | Hacker News Reader

This basically happens for a good reason. Basically, the potential scam is to sign up to a marketplace and list very popular products at lower prices than everyone else. Then ship empty packages or boxes full of rocks. The marketplace will pay you every few days, and if you are "shipping internationally" they won't figure it out for a few weeks. So trust is gained slowly.

The real takeaway here is that this guy pays $5,000 USD per month to get a support rep on a platform he sells a million dollars a month worth of goods on, of which it already takes a decent percent, and the support rep can't even talk to anyone with any power. This is the dark side of monopolies.

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Surely the scam doesn't last since 2013. Stop making excuses for Amazon, this isn't acceptable given the circumstances.

There's no scam going on here and bringing it up is just a way to take blame away from Amazon and for what end?

I have had XXX,XXX funds locked and a business wrecked in this exact same way but I'm explaining why it happens. If they didn't do this, they would be exploited. The real issue here is that, because they're a monopoly, the customer service sucks, and they don't care at all to let you prove you aren't running a scam. To the sibling commenter: No, what Amazon is doing is not a legal requirement. Yes, they act like PayPal now.

> If they didn't do this, they would be exploited

Amazon are offloading their fraud risk onto random small businesses and the nuance of their platform gives the small business no recourse. In a fair platform, you could resolve something like this pretty easily. I'm sure you agree, but it's worth noting explicitly. It's not a stretch to imagine Amazon are allowing for this "bug" in their support system to remain because it saves them money.

> In a fair platform, you could resolve something like this pretty easily

How? It seems that Amazon could provide better communication, but how would this situation be easily resolved?

A human talks to another human and they discuss the situation, figure out what documents or proofs they could provide and come to an agreement. Make those humans lawyers if you have to. It's not some unknown landscape of grey area in content moderation, it's a marketplace holding onto another businesses money unfairly. We can't treat it like a social network or other ephemeral software platform, this is real transactional commerce and Amazon should behave like it and provide support to resolve things like this quickly.

To argue Amazon's side here, they most likely don't view this as unfair withholding. From Amazon's point of view, this seller moved from FBA to self fulfillment and had a massive increase is sales. The OP said they were averaging $1M per month, and that Amazon had held $4.2M for 15 days, so it looks like they'd had an up to 8x increase in sales while simultaneously moving to a system where Amazon had no oversight.

As I said, while I can feel the pain of getting automated replies from a company that owes you a lot of money, I don't think this situation lends itself to easy solutions without a waiting period, even if you involve lawyers. There are circumstances where payment processors will hang on to the cash for much longer than this. Concert tickets come to mind.

Amazon doesn't even have real oversight in their own FBA program. They comingle fake products all the time and then also punish sellers when customers receive those fake products.

I agree. In order to get access to an API which enables you to proxy web requests through a network of participating consumer computers, I had to do a Zoom meeting a few years ago with the service provider.

Obviously their service could be used nefariously and they asked a few questions, wanted to see my office and validate a few things to ensure I was going to use it for valid purposes. (I used it to scrape publicly accessible data for research purposes).

Sometimes the low tech, manual human process is the best final filter.

Release a small fraction of the fund, let's say 30%, maybe limited to transactions deemed older/safer. It's trivial and it's enough cash flow for the vendor to continue operating until the next release.

Amazon has two days delivery for most orders. They can quickly get customer feedback (product review, refund, shipping issue). They could even directly question customers "have you received product? Yes/No".

They could easily determine that a vendor is legit if they wanted to, they do not need to hold funds for months.

What PayPal does or did (according to stories I read a while back) was freeze the funds and then simultaneously advertise a loan to the customer. So I guess we could subtract the interest rate charged by other lenders for that kind of loan from the rate that PayPal would charge, to get an estimate of the risk that PayPal believes it is mitigating when freezing people's funds.

Sounds odd for PayPal to do that (might be a US thing?). They're the one owing you money but you're the one who has to pay extra fee?

The purpose of delaying was to prevent fraud and this achieves nothing to prevent fraud, the vendor can just take the loan and run away. If PayPal is confident enough to give a loan, they're confident enough to release some of the funds, but they prefer to force a loan on the account holder and get extra fees?

I don't expect that going well in many jurisdictions. Consider the massive power imbalance and usually shorter legal timelines to close SME payments, that give more weight to the case.

Yea that's really the question I have in the other reply I just left.

Does it save them money? Maybe in the short term. Maybe even in the long term if the PR cost doesn't hit them at all.

I think as people this is a reason where we need to hold them accountable by pushing our businesses back to platforms where we have more control, and pushing our selling habits back to those same platforms.

I don't think Shopify is ideal, but I do think it's better for both sellers and buyers than Amazon.

>If they didn't do this, they would be exploited.

You're implying that the way they're currently doing it is the only possible way to deal with the problem.

Exactly, the problem isn’t that they are protecting themselves against fraud, it’s the way they do it. There is so much low hanging fruit they could implement to do better than this, it’s inexcusable.

That's fair.

What makes it so insane is they still get exploited on both the buyer and seller fronts. Really though the crux of the problem if they want to do this type of enforcement is they just need a better internal policy of expedited processing of reviews for accounts > some age && > amount of held funds.

If they ramped up this current type of "enforcement" to deter fraud it's going to come with a PR cost.

>because they're a monopoly

They're not a monopoly.

Yeah, they're not a monopoly. And my business isn't a monopoly either. But, notably, not in quite the same way that they're not a monopoly.

Sure, they are not a monopoly yet when you look at the whole of e-commerce. But Amazon effectively is a monopoly for at least books and probably electronics, depending on where you live.

Quoting from an article published in 2018: https://www.retaildive.com/news/amazon-beats-best-buy-as-top...

> 60% of every incremental dollar being spent online in North America is gong to one company — Amazon. No matter what you sell, Amazon is coming for you

They exercise monopoly power, by the law that makes them a monopoly.

Getting the JD to enforce monopoly laws is a whole other problem

In the same sense a giant Walmart in a 5000 people town is not a monopoly

They will after the COVID crisis eases.

mind you shopify is acting the same way too. i get that they have to protect themselves, but when they hold all the money and power they have little incentive to resolve things quickly.

I'd have though Amazon legal or their rep would have at least got something happening.

But just Fyi, often fraudsters will buy or otherwise gain control of companies with long histories to commit fraud. They do this exactly because you'd assume a company in business since 2013 is legit.

You see the same thing with old ebay accounts, people buy/hack them, suddenly start selling again and when it turns out all they mail is bricks in boxes it's too late, they took the money already.

For tax evasion (and I'm sure also legit purposes) you can buy companies that have been setup, registered and had returns filled for years, and now look like real entities. They're called "Shelf" companies.

Edit: I think they even do it the Sopranos. A guy has big gambling debts, they put a gun to his head and his company maxes out its credit with the bank and all its surpliers such that it will never be able to repay. The money goes to Tony and the bank/suppliers are left wondering why an established businessman ruined his own business and probably their's too.

Criminals are clever and that makes everyone's lives more difficult...

It's a huge shift in behavior. Outside of Covid-19 context something like this could have been a huge red flag. I'm sure people at amazon are working near as hard as anyone to respond to all of these changes. This was flagged and resolved by them in a day. I'm sure there are a lot of latent checks and balances that are there to catch things but when context changes need to be updated. In emergency times often the squeaky wheel gets the grease and I have no doubt Amazon is relying on customer feedback to point out less common problems that have arisen due to all the change.

The two can happen simultaneously. Assuming a particular case is either one or the other either with algorithms without human review is arrogant, unprofessional, fascist, and lacks nuance. Making it convoluted and difficult to receive money owed is fraud, theft, and deception by design.

Scams do happen on established accounts too. Accounts get stolen. Accounts get sold on private forums and Facebook groups. Established sellers do go rogue sometimes too.

> This is the dark side of monopolies.

Tech monopolies are particularly good at it, online support tickets and "community" forums are fantastic decoys for real support.

Google is one of the worst offenders, had a user tell me that Chrome deleted all of her passwords. Try to look up solutions online and all I find are tons of community forums with 60-80 posts each of people talking about how all of their passwords are gone and there is no solution/remedy offered to anyone.

I had a weird positive experience with Google lately. An account rep messed up all my AdWords (I still call it that) campaigns and blew $900 on worthless mistargeted clicks on Christmas Eve 2018. My request for refund was denied, so I chargebacked and got banned (who cares).

I need to use AdWords again next month so I reactivated the account and asked for another appeal. They immediately deleted the $900 debt and unbanned me.

Stop using chrome?

It doesn't fix the problem, it just makes it no longer your own problem. Chrome is still one of the dominant browsers.

> This is the dark side of monopolies.

Oh; no introduction necessary. We go way back.

As you said, they are paying $5,000 a month ($60,000/yr, they alone are paying 30-50% the salary) for an account rep whose sole job is to facilitate communication between customer and Amazon, and they are proving useless.

If this is some sort of "suspected fraud, don't tip them off" then it is a really shitty way to handle it - and probably not legally required. Amazon is choosing to handle it this way.

Sounds like Paypal - never keep your money in it a day longer than necessary. I don't know how Amazon Marketplace funds work, but this is a lesson never to trust Amazon with your money if you can avoid it.

This is probably the thing that bothers me the most about this story. Every couple of weeks there's another post about "Google de-listed my app from the Play Store", etc, and the common thread tends to be that there's a wall of powerless drones that act as the interface between the tech giant and the "tenant" (developer or seller). Contact support with a complaint, they say that you violated some nebulous policy and they can't give you the details of the violation, and all the tenant can do is shout into the void or hope to make enough noise rising up the ranks here at HN that somebody with actual power takes notice.

So, it's chilling to see that Amazon has a system where you can pay a frankly astonishing amount for a "priority" rep, who you would think would have the power to actually get any issues addressed, and actually they're just as useless as the Tier 1 guy who read you the script about violating the terms of service.

The vendor in question had been a steady seller with a 7 year track record. It's really hard claim to swallow that that is plausibly an exit scam, even to an extremely naive fraud-detection system.

Seller accounts are bought and sold on the grey/black market.

I don't think that math adds up.

Seller does $12 M/yr revenue with Amazon. How much is an exit fraud worth? I find it difficult to believe that anyone on the black market is willing to pay anything close to the discounted future earnings of a $12 M/yr revenue business just to pursue an exit scam for about a week.

5% margins, which are in the realm of normal, on $12MM/year would be $600k. If you didn’t ship $3MM worth of product, that would be five years of profit.

But also: shit happens to people. They get into debt. Businesses go bad. There’s a reason Amazon has a system in place to flag and shutdown this pattern of activity. Maybe it was wrong in this case, but it exists for a reason. Chesterton’s Fence and all that.

There is also credit risk for an established business that maybe heading to bankruptcy. Amazon is essentially extending credit by paying sellers for items that may not have shipped. Given recent disruptions they are likely on high alert for credit risk as well.

I don't think they need to hold ~4 months of average sales to cover that risk when ship times are a handful of days. AMZN seems to have been holding funds on sales that were not only already shipped, but delivered.

I get that Amazon has created this "self-correcting machine" that makes sure certain constraints are met in terms of vendors and products and what not. And if a vendor is detected as violating some rule, they're "eliminated" and Amazon prefers not to have human intervention.

But does Amazon share the full details of this "machine" with the partners/vendors beforehand who are going to be subjected to it? If I'm a vendor I'd like to know the exact rules of the game, down to the last if-then-else, no matter how complex, so I can at least have all the information to decipher what may have gone wrong, or how not to overstep. Sharing this information would only make it easier for both Amazon and the vendors.

And the fraudulent sellers would also love to have this information, so they can precisely step around every piece of logic Amazon's systems are enforcing.

What I'm asking is not unlike how society works. The law of the land is publicly available and it's a right of every citizen to know the rules that they're expected to abide by.

If someone reads all of the law and finds and exploits loopholes, did they really commit fraud? or is there something wrong with the law that needs to be fixed?

How are they reacting that way for an established seller, yet they are apparently incapable of getting rid of the "don't buy via amazon, contact me at my email address first, I will reject all orders via amazon" scammers that put fake offers at half market price in? That sounds more like an intern clicking on a few things. If their scam-hunting-systems (which I'd reason are an important part) are fully automatic and that bad, it's a miracle how AWS works.

It seems an established account is as likely as any account to sell a ton of ghost items and cash away the money. Consider if the vendor account gets hacked or the wife of the vendor pulls a stunt on him. The reward for fraud only gets bigger as the account is more trusted.

By that logic they should always freeze all accounts, because "they've not scammed up until now, which makes them more likely to scam in the next five minutes then ever before".

It looks more like a simplistic trigger that somebody just threw in there that doesn't take e.g. Amazon's ability to fulfill FBA orders. And it looks like a terrible policy to just say "yeah, fuck the seller, shut them down, we don't do manual reviews of the decisions of some Perl script from a decade ago".

I'm saddened that you don't consider these serious issues in the real world. I personally know a man who used to run a small company (not related to Amazon) and whose wife drained all the money away over a small period of time, as well as taking a few extra lines of credits, before vanishing.

Thankfully scams are limited in time. Freezing funds for 30 or 60 days is an effective fraud prevention tactic.

P.S. Of course in this case it's stupid and there should be a way to contact a human and release some of the funds.

I do consider them serious, I just don't believe that Amazon cares at all. I run into scam shops on the German amazon site all the time, they don't get removed, and they are trivial to identify, so much so that you can generate a very good list for manual screening with a simple regex on the description. Amazon does not remove them. Amazon does not care. But I bet that Amazon would pretend to care and remove them if I could make noise on social media and shame them for allowing scams to happen on their marketplace.

> Freezing funds for 30 or 60 days is an effective fraud prevention tactic.

It's also an effective tactic to ruin companies. Amazon should pay a hefty sum for any false positives, they currently have little to no incentive to a) make their automated systems work well ("just block everyone that looks kinda suspicious, the ones with lawyers and enough money will get our attention") b) actually have a process in place to check their automatic decisions.

Freezing funds is one thing. Freezing funds and being unwilling to get in contact and work with the person in question to evaluate and remedy the state of affairs is an entirely different issue.

> This is the dark side of monopolies.

Is there a bright side?

People get same day delivery diapers. Apparently it's worth it.

Same day delivery of diapers that they probably won't even notice are sketchy counterfeits.

Does authenticity matter for a disposable excrement catcher? If they sold you diapers lined with broken glass, fraud would be the least of their crimes.

Yes, the ability to hold enough pee without it leaking is something certain high quality nappies do far better than others. The ability to pull the moisture away from the skin as to reduce the chance of rash is done better by certain brands and I would hope the 'non-fakes' adhere to some sort of standard where the material doesn't affect the health of the skin as it's medically approved etc.

If your comment is correct, we could just wrap old tshirts around my babies arse.

Well, you certainly could. Cloth diapers were once the standard (and are in fact still used by some).

Cloth diapers don't fill up landfills, but they are a pain to clean.

Yes =(

Pros and cons to everything.

ANd your cheap chinese rip off cloth nappy will arrive which scratched yous kids skin to death.. I don't care about the cloth vs nappy - I am saying that you should care if you are receiving fakes.

Peter Thiel would have you believe that monopolies are the only places where truly creative innovation and invention can happen at the corporate level, because they no longer have to focus everything on staying afloat as a business in the first place.

Thiel would love to be able to embrace, extend, and extinguish.

Peter Thiel would have you believe a lot of things.

When the monopoly suffocates competitors it is usually by offering goods and services at below market price (which benefits the consumers).

Edit: maybe “while” would make my intent clearer? I understand it leads to worse pricing/progress later.

While*. Its a honeymoon phase until they find the price equilibrium which is worse for the consumers. Econ 101. Not saying you don't know, just mentioning that the intuition that monopolies are bad is a very simple one that apparently we tend to forget

Yeah, that was my intent, when (while) it is suffocating competition things are ok to good, not so much after.

For a little while, until they don't have to anymore

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