Fake buyers in ecommerce on the rise; refurbished segment hit the hardest?

Ecommerce companies in the luxury goods segment are facing the problem of fake orders. ‘Shoppers’ from Tier 2 and 3 cities are either cancelling orders after placing them, or worse, refusing the products that are arriving at their doorstep. Some unscrupulous elements also give fake phone numbers and addresses that create problems for the delivery personnel.

About 2% of the total orders are fake. Vijay K G, founder of Luxepolis, a site that sells luxury refurbished goods, thinks of a possible reason for this behaviour,

“Perhaps a lot of people order on impulse after seeing pictures of luxury goods they have been besotted with. Later, they develop cold feet and cancel the order at the last moment.”

Anvita Mehra, co-founder of Confidential Couture, points out the problems related to these incidents,

“Since these goods are expensive, we have to make sure they are returned to our warehouses as soon as possible and not left in the hands of the delivery personnel or courier boys for long.”

The business of refurbished goods

What are refurbished goods? They are products that belong to the luxury category that have been taken out of their packaging. These products can be anything from products with a minor defect, or returned to the seller (therefore removed from its original packaging), returned to the manufacturer. They could also be demo pieces that have been put up on display.

What could help counter these elements?

A lot of resources are going down the drain through spam orders, including logistics costs and delivery personnel’s salary. So what are the companies doing to prevent these occurrences? Anvita Mehra personally supervises the orders. She says,

“I monitor all orders and all customer care operations myself to minimize losses and sometimes see that personal calls have to be made. We immediately flag orders where 10-20 items are added in the cart.”

Vijay K G has security systems in place to detect spam bots,

“We also log in details of every server that we use and track it often to track IP addresses of the devices from which such orders come through. In future, whenever an order is placed again from the same IP, we put extra checks on it.”

It would also be prudent to verify pin codes and telephone numbers in case of suspicious activity. Limiting the CoD orders could also deter fake elements from placing orders. What do you think can help? Add your suggestions in the comments section below.