E-commerce platforms in China are increasingly facing a new type of fraud: online shoppers are using AI-generated images and videos to fake product damage and illegitimately claim refunds from sellers. This trend of abusing generative AI technology highlights trust issues in online shopping systems that rely heavily on customer-submitted photos to approve refund requests.
What Sellers Are Reporting
Merchants on Chinese social platforms have shared numerous complaints about refund requests that appear clearly AI-fabricated. In some cases:
A customer sent an image of a torn bedsheet that didn’t align with the product’s actual material.
A buyer used visuals showing dead crabs, allegedly to get compensation for aquatic products — later determined by police to be fabricated.
These examples show how easily generative AI can create convincing but fake evidence of damage for use in refund claims, targeting categories such as groceries, beauty products, and fragile goods.
Some sellers have reported that the shipping label characters looked like gibberish, or that the supposed damage patterns defied physical logic — clues that pointed to AI tampering.
Why This Fraud Is Working
Online shopping platforms traditionally depend on photos submitted by buyers to process refunds quickly. With AI image generators now widely available and easy to use, bad actors can produce realistic visuals showing products in damaged conditions — even when the actual item is fine.
A fraud detection firm based in New York reported a continued rise in these cases globally, with evidence of organized groups using rotating IP addresses and bulk refund submissions to exploit the system.
Legal Consequences and Enforcement
In one high-profile case, local police investigated a buyer whose AI-generated video supposedly showed six of eight purchased crabs dead. After scrutiny of the footage and animal behavior inconsistencies, authorities detained the individual for eight days for fraudulent conduct.
This incident marks one of the first times authorities have taken regulatory action in response to AI-facilitated refund scams in China — indicating that legal systems are beginning to respond to new forms of digital deception.
How Sellers Are Fighting Back
Some merchants have started using AI tools themselves to detect if submitted photos or videos were artificially generated. These AI detectors can flag suspicious content for further review, though detection accuracy isn’t perfect and may vary across tools.
Meanwhile, e-commerce platforms are considering policy changes — such as requiring videos instead of static photos, or tightening refund rules — but these measures also risk delaying refunds for legitimate customers.
Global Context
Although this story focuses on China, the phenomenon is not localized. A fraud detection company notes that AI-doctored images used in refund claims have increased significantly worldwide as AI image tools become more accessible and powerful.
This shift suggests that online marketplaces everywhere may soon confront similar challenges and must adapt systems to verify authenticity more robustly.