How to Keep E-commerce frauds away?


More and more foreign companies choose e-commerce to develop their business. From cosmetics companies like L’oreal to clothing companies such as coach, they all choose to develop their business via e-commerce. However, they are also facing some special problems. Sometimes, even Chinese can be trapped in.

A new fraud case on Taobao.

A small Taobao shop owner has paid 160,000 thousand Yuan for the fine for the past month because of a tiny mistake.
(Taobao Marketplace is a Chinese language web site for online shopping, similar to eBay and Amazon, operated in the People’s Republic of China by Alibaba Group. source: wikipedia)

Li has run a small Taobao shop selling cold-proof underwear for 7 years. He never expected that he can pay 160,000 Yuan for fine in one month in summer. Usually his business is dull in the summer, so Li decided to move his home in the summer this year. However, he forgot to close his online shop, so people can still place order. After discovering that the shop cannot deliver goods in time, the buyer place orders one after another. After 1 week, this guy get about 160,000 Yuan of the fine from Li’s account. (there’s a rule in Taobao, if the seller cannot deliver the goods in 15 days, the buyer can get his payment plus 10% back.) Then Li reported this to the police. As was expected, most of these orders were placed by one account.

Li is not the first one having this problem. Then how to keep those frauds away?

Major tricks used by frauds

In fact, those frauds have already studied the rules of Taobao and other e-commerce sties. They summarized four tricks to make money from the weak points in the rules.

1. No delivery

This is the trick used in this case. Some frauds even suggest people to order what the sellers don’t have then the sellers can not deliver their goods.

2. No receipt

frauds suggest: after you receiving the parcel, choose “I haven’t received”. Most sellers will not argue with you over that because any argument will influence their credibility.

3. Complaint

Even after receiving the parcel and confirm the reception, the sellers are still far from safety zone. During the first 15 days after reception, the buyer can give goods back without any reason. And there’s a group of people who always change their cell phones and clothes, but no cash in the pocket.

give goods back to seller by only one click

4. Report

If all the previous tricks failed, frauds will play their best card. They will first ask the seller to take their goods back and give them new ones. If seller refuse, they will threaten to report to Taobao which almost all the sellers are afraid of because Taobao will close the shops with problems of reports.

Prepare a strategy against fraud

1. Study the rules

Most frauds use the weak point of the rules. So if you are developing your business on E-commerce site, you’d better study the rules of the site. And different E-commerce sites make different rules. For example, C2C sites like Taobao usually will punish the seller without any notice if they don’t deliver the goods on time while B2C sites like Jingdong will will do delivery work by themselves.

2. Study the frauds

If you want to avoid troubles, it is necessary to study the frauds. For example, most frauds are young and they usually focus more on the digital products and clothing stores. If you want to sell camera or good suit, you’d better pay more attention to this.

3. Find the solution

After getting enough information, you can find the solution for it. In the case of Mr Li, if he is careful enough, he will not leave it open still in summer when he is not able to deliver goods.

Continue E-commerce

It’s not bad idea to develop your business via e-commerce in China because the size of e-commerce market is 1,760 billion Yuan in 2012, still growing at 25.8%.

e-commerce 08-14

china e-commerce market size from 2008-2014

However, there are also traps and frauds there. If you want futther details, please leave your comment or contact us.

See more about E-marketing in China