11 min read

Amazon Seller Scams and Frauds You Should Know About

Amazon Seller Scams and Frauds You Should Know About

$370,000 of dirt.

That's what amazon employees uncovered when they were prying open returned products in a Barcelona warehouse. And it led investigators on a wild hunt for a 22-year-old individual named Kwarteng, who for years had been manipulating Amazon's return policy.

Amazon has since battled this fraud by revising its return policy, but it's only one squished bug in the infestation of frauds on Amazon that crawl around on the platform.

And if you don't know about the various types of frauds, then you could find your once profitable listings now diseased, and rotting. Good thing you found this article, eh?

Let's explore the various ways these "insects" game the system, so that they don't exploit you.

Types of Frauds on Amazon

Amazon's system has taken the e-commerce world by storm, especially after the 2020 Covid pandemic. Now, with the pace of the digital revolution quickening, people find themselves going from store parking lot to prime, rear-end parking, spaces on couches. This can be a boon for businesses, but some people find ways to make it a bust for others.

In SkyNet fashion, these fraudsters lurk in the shadows through fake accounts, turning the system against itself through reviews, returns, listings, among other devious methods. Spotting Amazon scams has become an unfortunate war, waged behind a digital veil between sellers and scammers.

For their first method, we will show how referral marketing can turn deadly.

Too Many Positive Reviews Scam

Word of mouth is a magical thing, that can bestow a wealth of free marketing for your company -- if it's positive. Unfortunately, too many "sellers" on Amazon are using the review feature as a sword against their competitors.

With more than 90% of consumers trusting the anonymous online reviewer more than influencers, the power of those 5 stars is undeniable. But, it can also destroy your credibility, and even suspend your account. Should that happen, there are some steps that you can take.

Fake reviews can have many different sources, with two main ones:

  • Orchestrated by "incentivized" reviewers
  • Competitors looking to have Amazon's policing department zero in on you

Incentivized Reviews

This is where businesses or individuals receive compensation for leaving a review. In the past, as long as they were buying products on Amazon, it wasn't necessarily against Amazon's Terms of Use. For individuals, it may have come in the form of a gift card.

But some businesses offer reviews for payment, and then give positive reviews for a price. Amazon has since built automated and manual detection methods to hunt down these reviews. Sometimes they punish the offender, but Amazon is still very much buyer-friendly. So, other times, they do the opposite --

And punish the seller.

What happens when the source is more malicious?

Competitor Planted Reviews

Your savvy competitors will have picked up on this, and know that Amazon's bots are searching for those fake reviews. As such, if you slip off to sleep at night, and wake up to hundreds of new reviews, then don't be overjoyed, because:

  1. Customers are not stupid
  2. Amazon is not stupid

Not only will you lose face in the eyes of your customer base, but Amazon will pick up the scent of your false reviews, and the blood of a failed Amazon listing will flush the water.

Flood of Negative Reviews Scam

"Any press is good press!"

Not in the e-commerce world!

Negative reviews are always a boon for any marketing strategy, which is where customer service is key. Some companies offer refunds or gift cards to disgruntled consumers, in the hopes that they alter their negative reviews.

But there are some consumers you just can't please. Because, well...

They aren't real.

In July of 2020, UCLA and USC published a study that exposed the flaws in Amazon's system. The group had uncovered a Facebook group underworld of 16,000 people, offering positive reviews for payment. With more than 560 postings every day, business was good.

This undercover business doesn't stop there. Bots and "click farms" have flooded the space, programmed to spam upvotes on negative reviews, to push them to the top of the listing's reviews, repelling future customers like pungent repellent.

Amazon is making inroads to try to curb this nauseating trend infecting not only Amazon, but also any e-commerce sites that feature reviews -- Yelp estimates that 25% of its reviews are "suspicious". In 2016, it sued 1,100 users for posting fake reviews. This idea of digital "defamation" will continue to be a problem for litigation in this evolving digital age.

Until more solid solutions are put into action to mend the system, then users will continue exploiting it.

How do you suss out the frauds from your ardent customers?

How To Spot Fake Reviews

The Review Ratio

Take a look at the percentage of 1- to 5-star reviews. Honest reviews are going to be a mixed bag, with overall consistency. For example, it will be a little like a funnel.

If you have generally positive reviews, then maybe:

  • 70% of the reviews are 4 or 5 stars
  • 20% are 2-3 stars
  • 10% is 1 star

But if you have 70% 4-5 stars, and then 1-star reviews jump up to 25%, with 5% being 2-3 stars, then, well...

Houston, you have a fake review problem. Because that's not a funnel, that's an "hourglass".

Check For Vague Reviews

Bots aren't the most eloquent beings, and their verbiage is distinct from what we might call a "normal" person.

Also, someone who is driven by a passion for the product, good and bad, will leave a more in-depth review than someone being paid to do it. So check out how the review is written. If it comes across as vague and uninspired, then that's a hint that it might have been penned by a fraudster.

Buy and Return Scam

Receiving bulk orders on your listing is a thrilling experience as you see your sales seemingly jump overnight.

Maybe it is over Christmas or Black Friday. But there is a flip side to these feelings of ecstasy and isn't sunshine and rainbows. Especially during those peak holiday times, returns can be something used to put you out of business due to a drained inventory.

Then, once the joys and thrills of holiday shopping subside, and your business enters the doldrums in-between, you might see a flood of returns from that bulk "sale". You have your inventory back, but no more holiday rush to benefit from.

And you sold nothing.

Amazon is trying to push back on this wave of fraudulent returns, and in 2021 they cracked down hard on one shopper.

To the tune of 20 years in jail.

But change is creeping along too slow for some businesses, as banning customers comes from an in-house solution, where Amazon employees slam down the ban-hammer should they suspect something...suspect.

The Types of Fraudulent Returns

What shades and forms do fraudulent returns take? Some are more diabolical than others, but they all take a bite out of your bottom line.


Have you ever impulse-ordered something, used it once, and then returned it? Well, that is easy to justify, but some consumers make it a practice. Anyone who has done the retail grind behind a register knows this customer all too well.

Competition Sabotage

This is a haymaker in the arsenal of a dubious seller. They buy a large portion of your inventory, then mass-return it, citing "faulty product". This not only looks bad on you as a business but will send Amazon's ban-hammer down on your head, terminating your account.


Common in the world of electronics, where tech wizards work their magic by stripping ordered items of their gizzards while cashing the money from the refund. They then sell the electronic's components on the market, making a profit.

The Empty Box

This brazen form of fraud is where the perpetrator makes multiple accounts and then ships the "products" back in empty boxes. With loot in hand and refunds in their pockets, they resell their bounty on the streets.

What Can You Do?

I wish I could tell you that there's an extensive shield for sellers, to block out the wave of criminals.

Only, there isn't. Sometimes, Amazon will even climb into the fraudster's corner. That is a fight that you cannot win. The best way to fight return fraudsters is to be proactive!

If you only react, then chances are your goods, and profit, are sucked into the e-commerce void. Here's what you should do:

  1. Require contact information and identification verification.
  2. Check the FBA customer reports like a hawk, to verify the reasons for a return. If anything appears suspicious, move to number three.
  3. Report the buyer to Amazon support.

Hijacking Your Listing Scam

"It's totally chaotic," groaned Rachel Johnson Greer in an interview to The Verge.

She has a point.

Over 2 billion listings form a massive puzzle of insanity, with pieces constantly being hijacked and used again. When a product is discontinued by a company, then the listing fades into the shadows like Bing Bong in Pixar's "Inside Out".

Only, they don't die.

And if the listing retires with thousands of positive reviews to show for it, then it makes an enticing piece of promotional bait for a shady seller. Just change some of the images, the title, and boom!

This hijacking of listings is a growing trend, and Amazon is struggling to keep up, with more than 2 million sellers swarming the platform since 2019. But in the pandemic ravaged world of 2020, that number is only set to shoot upwards.

Not good for Amazon's compliance teams. And yet there's another sinister side to this hijacking scheme.

Whereas the previous method is for the benefit of the hijacker, this method has one goal:

To target you.

It goes something like this. Your competitors create a duplicate ad, sell an inferior product under the "other sellers" section at a cheaper price. When the inevitable 1-star reviews roll in, it hits your ad.

If you are not careful, or vigilant, your listings can be repurposed by others.

But how do you fortify your ship against these listing pirates?

Five Things That You Can Do

  1. Submit your images to https://archive.org/ to protect them.
  2. File copyright at https://copyright.gov/ to have the force of the US government behind you. Add a copyright notice in your listing, to deter any potential repurpose of your material.
  3. Always have inventory available. This prevents buyers from checking out the "other sellers".
  4. Stay on top of the product listings.
  5. Sign up for Bindwise's stellar hijacking monitoring service

If you're still seeing those pesky one-star reviews flooding in, just know that you can fight back. Yes, it might've given you certain "filthy" words that would've landed soap in your mouth as a young buck. But, there is a way that you can hurl those words at the fraudulent "seller".

  1. Find the sellers username
  2. Go to "Ask a question" in the upper right-hand corner.
  3. Select "An item for sale"
  4. Choose "Question about a product"
  5. Then write a "cease and desist" letter.
  6. Submit your "strongly worded" letter.

Upvoting Negative Reviews Scam

These methods have forged a wild-west, where credible sellers are fearful of incriminating anyone, which might result in retribution.

When a skin-care seller found a couple of negative reviews pushed to the top of his page, he was dumbfounded. But the reason become clear on inspection of the upvotes -- they had shot up exponentially.

So, where do these votes come from? In some cases, they could be bots that spam the living daylights out of a negative review's upvotes. In other cases, they are services provided by third parties. One of these "humble" services was "thesocialmarketeers.org", which is now defunct. They had listed a service on their website that gifted you 1,000 yes votes from "verified" users.

Despicable on its own, the inverse is also true -- third parties also offer to demolish competition through upvoting negative reviews.

The Fake Claims Scam

Amazon adopts a policy that hinders efforts to prove that you are a reliable seller, especially when competitors zero in your listings. What started as a way to empower buyers to protect themselves from faulty products has turned against the sellers in devious ways.

Because this tool makes it too easy to bring a suspension down on a listing.

Let's take our unfortunate seller of skincare products, battling the woes of negative review upvotes. If his competitor was especially devious, then he could issue a claim that the products were hazardous.

And in the digital world, you are guilty until proven innocent. So, what does that mean for you? Well, Amazon shuts down the listing to allow for investigation.

The obvious effect is that it begins to tank your sales, but you are falling on a double sword here because it chokes your organic rankings and traffic.

While it seems like a hopeless maneuver by the fraudsters, there are ways that you can push back against them. So, how can you turn the tide, and shield your listings from fake claims?

Ways To Protect Yourself

  1. The first, and most obvious way, is to immediately report it to your Amazon seller consultant, from which they will send an email the moment that you suspect something fishy in the water. And remember that Amazon's Seller Central is your best friend here, where you can type out what happened, after which they will shoot a response your way.
  2. Just be sure to document everything! Because they will ask for proof.

FBA Return Fraud Scam

The FBA (Fulfillment By Amazon) is an amazing way for businesses to scale up by using Amazon warehouses for their inventory! The products are picked, packed, and shipped by Amazon, as well as dishing out customer service. As a result, you have a common headache sorted out by the tech giant, allowing you to reach more customers.

But what happens when scam artists use this against you? By using the system against itself.

The speed and efficiency of Amazon warehouses are hit and miss, where speed is most often prioritized over efficiency.

When an item is returned to the warehouses, labeled as "unsellable", the onus falls on the Amazon warehouse worker to classify it. Similar to Mr. Kwarteng filling boxes with dirt to match the listed weight of the product, if the box is sealed carefully it can fool an exhausted worker's eyes.

That means the damaged, used, or flat-out missing product goes back on sale, for other buyers to purchase, drowning your listing, and credibility, in a storm of negative press.

You can stay above the storm by practicing this one important step--

Monitor Your Account and Performance Metrics

If buyers intend to torpedo your business through false claims, then keeping a close eye on your performance alerts can give you a heads up when those suspect high return rates start rolling in. If they are higher than your standard return rate, then it's a sign for you to act.

Another method is utilizing FBA customer returns, which is a report that you can locate in your seller central. It's a goldmine of information, such as "return date", ASIN, "return reason by customer", and what Amazon decided to do with the inventory.

So, it's time for you to pull off your best Sherlock Holmes.

Follow these steps to access the report.

  1. Log in to your Seller Central
  2. Click on "Reports" in the top menu.
  3. Select "Fulfillment"
  4. Then "Customer Concessions"
  5. Finally, "Returns"

Simply fill out the form, and generate the report.

To catch these slimy actors, you need to constantly be throwing out your net and checking your lines. If you sell at a high volume, then you especially want to make this report your new best friend.

At the very least, you should be downloading this report every week. Every day, if you're a high-volume seller.

Three Common Sense Things To Do

These three ways will aid in keeping your business shielded from the lurking scammers, waiting in the shadows of the marketplace.

For avoiding Amazon frauds: be nice, be thorough, and be alert.

1. Kill Them With Kindness

You might've heard this from your mother when you confronted her about bullies at school. Amazon scammers are simply that, and the best tactic to push back against their nefarious acts is to build a positive customer base who is willing to sing your praises.

So, engage with them, and be johnny on the spot with customer inquiries. This counters any suspicion of fraud and fosters positive communication.

And positive reviews.

This puts you on the path to becoming a verified, or valued, seller, which becomes a shield of its own when deterring lurking scammers.

2. Document Everything

If you've been paying attention to the article up until now, then you should have picked up on this very important them -- document every aspect of a transaction. Because when the claim bug comes a crawlin', then you want to make sure that you have proof to counter the claim.

Keep a track of everything from addresses to photos of the item's condition. This will keep you covered, and keep your inventory protected.

So dust off your Excel skills, and start crafting your spreadsheets.

3. Trust Your Instinct

“I didn’t know what was going on, whether it was a glitch or whether somebody was trying to mess with us,” Zac Plansky reminisced in a The Verge interview. Why the surprise?

He had gotten 16 five-star reviews in one night. Sure enough, a rival seller had insinuated that Zac was buying reviews.

The means are always enough to justify the end for these scammers, and often your greatest weapon is to be proactive.

How Are You Avoiding Amazon Frauds?

We understand what your business means to you. It's your lifeblood, and a result of passion for your craft -- whatever it may be.

And it's a dagger in the heart to have that hijacked by someone else. Much worse, someone that you can't see.

Check out Bindwise here, to automate Amazon monitoring, so you would be instantly notified if anything fishy is going on with your listings.