Return Fraud: What Online Sellers Can Do About Wardrobing and Empty-Box Returns

A customer orders a $180 dress on Thursday, wears it to a wedding on Saturday, and starts a return on Monday. A week later the package arrives with the dress inside, tags tucked back on, a faint smell of perfume. Or the box arrives with nothing in it at all, and the buyer swears it was fine when it left.

If you sell online long enough, you’ll see both. In its 2025 Retail Returns Landscape report, the National Retail Federation and Happy Returns estimated that 9% of all retail returns are fraudulent. Among retailers that track fraud incidents, 65% said empty-box or “box of rocks” returns were rising, and 71% saw more overstated return quantities.

You can’t stop every bad actor. But you can make fraud harder, catch more of it when it arrives, and build an evidence file that holds up when a marketplace or payment processor reviews the case. This guide shows you how.

What counts as return fraud

Return fraud is any return where the shopper is trying to get money or goods they aren’t entitled to. It is different from a customer who changed their mind or ordered the wrong size, which is normal returns behavior. It is also different from return abuse, which is legal but costly, such as serial over-ordering.

The common types online sellers see:

The last category overlaps with chargebacks, where the buyer goes to their bank instead of to you. The defenses are similar: documentation, tracking and clear policies.

Why small sellers get hit hardest

Large retailers run AI scoring on every return. In the NRF and Happy Returns report, 85% of retailers said they use AI to detect or prevent return fraud. A small store usually doesn’t have that, and often has generous policies to compete.

Fraudsters know this. They also know that small sellers often refund on carrier scan, before the item arrives, to keep customers happy. That habit is the single biggest gap in most small-store return processes.

Key takeaway: Most return fraud succeeds because the seller refunds before checking the box. Inspect first, refund second, and document both steps. That one change closes the door on empty-box and switch returns.

Build protection into your return policy

Your return policy is your first defense and your best evidence. Fraud is easier to deny when the rules were clear before the purchase. A fraud-resistant policy states:

• Condition requirements. Items must be unworn, unwashed and unused, with original tags attached and all parts included.
• Inspection before refund. Refunds are issued after the item is received and inspected, within a stated number of business days.
• Tag rules. For apparel, explain that removing a large security tag or “do not remove” tag makes the item final sale.
• Deductions. If you charge a restocking fee or reduce refunds for damaged returns, state the amount and the conditions.
• Serial-numbered goods. For electronics, note that returns are matched against the serial number shipped.
• Return window. A defined window, such as 30 days from delivery, limits how long an item can be “borrowed.”

Check your platform’s rules before adding fees. Marketplaces such as Amazon and eBay set their own return terms that can override what you write. Consumer protection rules also vary by state, so if you’re unsure, check with your state attorney general’s consumer office. This is not legal advice.

Document every order before it ships

When a dispute reaches a marketplace or a payment processor, the side with better records usually wins. Build these habits into packing:

1. Photograph high-value orders. Take 1 or 2 photos of the item and its serial number or tag inside the open box, then the sealed box with the shipping label visible. Name the files by order number.
2. Record the shipped weight. Your shipping software or label printer already captures it. Keep it with the order record.
3. Log serial numbers. For electronics, tools, watches and other serialized goods, record the serial number of the exact unit shipped.
4. Use tamper-evident packaging or tags. Security seals and large dangle tags that must be cut to wear the item make wardrobing obvious.
5. Mark your items. A small, discreet mark or a unique QR sticker on the item or inner packaging helps prove a returned piece isn’t yours.

This takes about 30 seconds an order, and you only need it for products above a dollar threshold you choose.

Inspect returns the moment they arrive

The second half of the evidence file happens at your door. A consistent inspection routine:

1. Weigh the sealed return before opening it. Compare it with the shipped weight. A large gap is a red flag for an empty box or swap.
2. Photograph or record the unboxing with the return label visible. A short phone video is the strongest evidence for empty-box disputes.
3. Check the serial number, tags and parts against your order record.
4. Grade the condition using a simple scale such as new, opened, used, damaged.
5. Decide within your stated window. Issue a full refund, a partial refund, or a denial with photos attached.

Keep the inspection log for at least as long as the chargeback and claim windows on your payment processor and marketplaces.

Use your marketplace’s seller protections

If you sell on marketplaces, learn their tools before you need them:

• eBay. eBay’s condition of returned items policy says buyers must return the exact item in the same condition, with everything from the original package. If a buyer qualifies under eBay’s rules, the seller can deduct up to 50% from the refund for the lost value. Eligibility depends on your seller status and return settings, so check Seller Hub before relying on it. See our eBay beginner’s guide for setup.
• Amazon. Merchant-fulfilled sellers can file a SAFE-T claim when a return comes back damaged, used or materially different. Filing windows are short and Amazon generally expects photos, the return label and proof such as the serial number you shipped. Amazon also allows restocking fees in some situations, under its own rules.
• Your own store. On Shopify, WooCommerce and similar platforms, you control the policy. Returns apps can add rules such as blocking returns on final-sale items, requiring photos for damage claims or offering store credit first.

Marketplace rules change often. Check the current help pages in Seller Central or Seller Hub, and set calendar reminders for claim deadlines.

Spot risky accounts without punishing everyone

Most returns are honest. If you make the process painful for everyone, you’ll lose good customers. Instead, look for patterns:

• An account with a return rate far above your store average
• Repeated “item not received” or “arrived empty” claims
• Returns shipped from a different address or region than the delivery address
• New accounts placing large orders of resellable items, which is also a sign of fraudulent orders
• Expensive items ordered right before an event, then returned right after

When you find a pattern, you can tighten rules for that account only: require inspection before any refund, offer store credit instead of cash, or decline future orders. Many returns platforms support customer-level rules.

Where to start: a 2-week return fraud plan

You don’t need software to begin. Start here:

1. Day 1: Stop refunding on carrier scan. Switch to refund after inspection, and update your policy page to say so.
2. Days 2 to 3: Add condition, tag and serial-number language to your return policy.
3. Days 4 to 5: Set a dollar threshold, such as $75, and start photographing and weighing every order above it.
4. Week 2: Write a 5-step inspection checklist for whoever opens returns, and keep a simple log.
5. Week 2: Read your marketplace’s partial refund and claim rules, and note the deadlines.
6. Ongoing: Review returns monthly by customer. Flag accounts with unusual patterns.

If your returns volume is growing, a returns management app can automate the weighing, photo requests and customer rules. Pair it with clear customer support processes so honest buyers still get quick answers.

Conclusion

Return fraud is a cost of doing business online, but it doesn’t have to be a big one. The sellers who lose least have 3 things in common: a written policy that sets condition rules, a habit of documenting orders before they leave, and a strict “inspect before refund” rule. Add your marketplace’s partial refund and claim tools, and you’ll recover more of the losses you can’t prevent. For the bigger picture on cutting returns in general, read how to reduce ecommerce returns.

Sources

• NRF: Consumers expected to return nearly $850 billion in merchandise in 2025 — 9% of returns fraudulent, empty-box and decoy trends, 85% of retailers using AI
• eBay: Condition of returned items policy — buyer return condition rules and up-to-50% deduction for qualifying returns
• Amazon Seller Forums: SAFE-T claims eligibility (Amazon seller community) — SAFE-T claim eligibility for damaged or materially different returns