Refund scams are evolving beyond simple abuse of return policies and have morphed into a complex black market where scamming methods are packaged and sold like software.

Research by Flare analyzing thousands of posts from online scamming communities shows a booming market where people openly sell refund “methods,” guides, and services to exploit the return systems of major stores and payment platforms. 

These scams don’t rely on hacking or malware; instead, they exploit knowledge of customer service and payment dispute processes.

By twisting rules meant to help customers, scammers can consistently get money or goods from companies, turning return policies into a profitable fraud scheme.

When you purchase things like appliances, games, or groceries, you usually have the option to exchange or return them. 

Refund fraud happens when people misuse this refund option to get money, replacements, or credit from businesses without really returning the products or services.

Refund fraud is generally a form of social engineering, sometimes overlapping with financial fraud and account takeovers, commonly exploiting business procedures and customer support rules. Scammers exploit return guarantees, chargeback systems, and customer-service procedures to trick companies into giving refunds even for legitimate purchases.

Common examples are:

• Claiming an item never arrived

• Returning empty boxes or fake items 

• Disputing valid charges with banks or payment processors 

• Reporting items as faulty to get refunds 

Because many stores prioritize quick and easy returns, their systems can be manipulated by those who understand the process.

Businesses gather info on new fraud methods, but scammers constantly test and improve their techniques, creating an ongoing battle.

Therefore, organizations must continually collect threat intelligence and share information to stay informed; otherwise, they risk significant financial losses.

In retail, shoppers expect easy returns. Surveys reveal that about 76% of consumers say free returns affect their shopping choices, per work from the National Retail Federation and retail technology firm Narvar, making it hard for stores to tighten return policies without upsetting legitimate customers.

This creates a fertile ground for refund fraud to grow. It is now one of the most expensive types of e-commerce fraud.

According to the National Retail Federation (NRF) and Appriss Retail, retailers processed roughly $685 billion in returns in 2024, about 13% of total sales.

About $103 billion (~15%) of these were estimated to be fraudulent. Other research indicates that for every dollar lost to fraud, businesses lose an additional $4 in operational costs. 

Finding relevant posts was tough. We started broadly looking for “refund” mentions and found over 30 million posts.

We refined our search and used keywords such as “refund” along with “method” or “tutorial”, drastically cutting scope and leading to around 8 million results with hundreds of thousands monthly.

Flare researchers looked at a sample of 3,686 posts to understand how refund fraud works in the black market.

The analysis showed a commercial ecosystem where people advertise refund techniques like real digital content. The tutorial becomes like “an online course” that teaches people how to scam businesses.

The dataset contained 3,686 posts, but only about 1,639 were unique, showing that scammers often repost the same ads across various communities to get more attention and find buyers.

Most posts advertised refund methods, tutorials, guides, and vendor refund services. Tutorial prices typically ranged from $50 to $300, suggesting the market aims to attract both experienced and new scammers.

Some ads also offered services where people handle refunds for customers, usually taking 30% to 50% of the refund. It may be showing that the “SaaS” business model is now in the classic fraud ecosystem.

While underground ads rarely give all the details (that’s what they sell), the terms used align with known refund fraud tactics:

• Refund without return: Scammers convince a store to give a refund and let them keep the item. They often claim the product was faulty, damaged, or never delivered to get refunds.

• Chargeback fraud: This involves disputing valid transactions through banks or payment processors, sometimes called friendly fraud. It forces stores to give refunds and pay chargeback fees.

• Goods swapping: Scammers return a different or cheaper item than the original. For example, they might return fake or damaged products while keeping or reselling the real item.

• Empty-box returns: Scammers ship back packages with no product or cheap replacements while claiming they returned the original. If the package is processed quickly or inspection is limited, the refund may be issued before the fraud is detected.

• Policy manipulation: Some methods focus on exploiting specific company policies, like repeatedly reporting missing items or requesting replacements under warranty.

These tactics rely more on social engineering and knowledge of customer support than on technical hacking.

Analyzing the data showed frequent mentions of major consumer platforms and payment services, with Amazon, PayPal, Apple, eBay, Walmart, Best Buy, delivery platforms, and digital payment services being most common.

These platforms are targeted because:

• Their high transaction volumes allow fraudulent refunds to go unnoticed

• They have customer-friendly return policies to ensure satisfaction

• They involve valuable goods or financial transactions, increasing profit potential for scammers

A key finding is that refund fraud techniques are increasingly standardized and sold as digital products. By packaging knowledge into tutorials and guides, sellers let people with little tech skill be involved in fraud schemes.

Unlike many cybercrimes, refund fraud requires little technical know-how. It blurs the line between legitimate consumer behavior and intentional deception.

People who buy these tutorials may see it as harmless initially, but exposure to these communities can lead them to being more involved in more organized fraud.

Another trend is “refund fraud as a service” where customers buy a product and then collaborate with scammers who handle the refund process, splitting the profits.

The incentives are clear for both sides. “Customers” get help exploiting refund policies, while scammers can expand their operations without spending time on each case, just applying the techniques they know.

This mirrors trends in other cybercrime markets where tools like ransomware kits, phishing kits, and malware builders are sold as services. In this case, the product sold is procedural knowledge on manipulating refund systems.

While refund fraud doesn’t need advanced skills, its impact on businesses can rival that of cybercrimes like malware or ransomware.

The growing black market for refund fraud tutorials and services shows that modern cybercrime increasingly targets business logic and processes, not just tech.

For e-commerce companies, retailers, payment providers, and digital service organizations, these cases emphasize the importance of threat intelligence. Understanding new fraud techniques allows them to stay ahead, educate employees, and develop better prevention strategies.

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Sponsored and written by Flare.