Scammers in China are employing AI-created images to obtain refunds.

I hesitate to admit it, but I spent a considerable amount of money online during this holiday shopping season. Unsurprisingly, some of those purchases fell short of my expectations. A photobook I ordered arrived damaged, so I took a few photos, emailed them to the seller, and received a refund. Online shopping platforms have traditionally relied on customer-submitted images to verify refund requests. However, generative AI is starting to disrupt that system.

A Touch Too Suspicious

On the Chinese social media platform RedNote, WIRED discovered numerous posts from ecommerce sellers and customer service reps voicing concerns over what they perceive to be AI-generated refund claims. In one instance, a customer claimed their purchased bed sheet was shredded, but the Chinese characters on the shipping label appeared nonsensical. In another case, the buyer provided an image of a coffee mug with cracks resembling paper tears. “This is a ceramic cup, not a cardboard one. Who can tear a ceramic cup into layers like this?” questioned the seller.

Merchants noted that certain product categories are experiencing the most abuse of AI-generated damage photos: fresh groceries, inexpensive beauty items, and fragile products like ceramic cups. Sellers often do not request the return of these items before issuing refunds, making them vulnerable to return scams.

In November, a seller of live crabs on Douyin, the Chinese equivalent of TikTok, received a photo from a customer suggesting most of the crabs she ordered had arrived dead, while two others were shown escaping. The buyer even sent videos depicting the dead crabs being poked by a finger. However, something seemed off.

“My family has been crab farming for over three decades. We’ve never seen a dead crab with legs pointing upwards,” Gao Jing, the seller, stated in a video she later shared on Douyin. Ultimately, the fraud was revealed by the sexes of the crabs. The first video showed two males and four females, while the second clip had three males and three females, with one crab having nine legs instead of eight.

Gao subsequently reported the fraud to the authorities, who concluded that the videos were indeed fabricated and detained the buyer for eight days, according to a police statement Gao shared online. This case garnered significant attention on Chinese social media, partly because it marked the first known instance of an AI refund scam prompting a regulatory response.

Diminishing Barriers

This issue isn’t limited to China. Forter, a fraud detection firm based in New York, estimates that the use of AI-manipulated images in refund claims has risen by over 15 percent since the beginning of the year, and this trend is continuing to grow worldwide.

“This trend began in mid-2024, but has accelerated over the past year as image-generation tools have become widely available and incredibly user-friendly,” states Michael Reitblat, CEO and cofounder of Forter. He adds that the AI doesn’t need to be flawless, as retail workers and refund review teams often lack the time to meticulously examine each image.