- Gen Zers and millennials are duping online merchants into refunds for products they’ve received and are keeping. The practice is called digital shoplifting, and the consequences for it are slim—except for merchants who lose 3.75 times the transaction cost every time it happens.
For many Americans, it feels almost too easy to dupe retailers into getting their money back for online purchases they’ve made. Say you’ve bought that new expensive sweater or a pair of headphones, but you don’t want to shoulder the cost. You just submit a claim to the retailer that you never received the package or you didn’t order it in the first place.
But that’s called digital shoplifting—and about half of Gen Zers and millennials who earn more than $100,000 per year admitted to having done so in the past year, according to a study by Socure. The anti-fraud tech company surveyed 2,000 Americans between Dec. 6 and Dec. 13, 2024 and found digital shoplifting is more rampant than most people knew.
As for the connection between wealthier shoppers and a higher propensity to commit digital shoplifting, Socure’s head of product management for fraud and identity solutions, Ori Snir, told Fortune he suspects “there might be a link between those who better understand bank and merchant obligations to those that are taking advantage of them.”
Digital shoplifting can include claiming a package was never delivered or was stolen, disputing credit card charges made by the merchant, or saying the product was never intentionally bought in the first place. Shoppers justify these actions with struggles against inflation, seeing “hacks” from social media influencers on how to get money back for purchases, and the perceived leniency of merchants to issue refunds.
One TikTok influencer with nearly 3 million followers detailed how to get refunded for an Amazon Prime purchase claiming the order was delayed.
“I know your chat support is way more lenient when it comes to helping customers,” @faaresq said in the video, and showed a chat with an Amazon agent issuing a refund for the item. “And 99% of the time when the package arrives, they won’t even ask you to send it back.”
@faaresq Try this secret Amazon hack! 😉👀 #shopping #return #amazon #amazonhacks2023 #amazonreturns #amazonfind #learnontiktok ♬ original sound – faares
Although young, wealthy Americans were the most likely perpetrators, people across all generations admitted to “first-party fraud,” or when consumers dispute charges with their credit card company and merchant in order to get the money back for a product they actually bought and received.
Digital shoplifting is likely rampant because there aren’t severe consequences for those who commit it, Snir said.
“The best-case scenario is that the person goes unpunished and gets away with it entirely, which often leads them to do it again,” Snir said. “Another potential outcome is that their dispute gets denied and they ultimately still have to pay for their purchase.”
The worst-case scenario is a customer having their account locked and blocked, preventing them from making purchases with that merchant again, Snir said.
How digital shoplifting hurts merchants
Several Reddit forums also detail customers scheming to file for a charge-back (essentially a refund issued by the merchant and credit card company) even after receiving the product. One Reddit user said a customer had received the product, but filed for a charge-back anyway. The customer even admitted to the merchant it was wrong that they did it, but continued the charge-back process anyway.
“I sent the humble request and even begging to her [to cancel the charge-back],” the Reddit user wrote. “The money is little to her, but [it’s worth] a week’s lunch to me. What’s more, I was very afraid of the potential impact to my store. I tried to appeal to PayPal, but the case is closed.”
What’s more, charge-backs cost retailers 3.75 times the actual transaction value in lost revenue and merchandise, charge-back fees, higher overhead costs, and damaged relationships with card networks, according to a study from Chargebacks911 and business consultancy the Strawhecker Group.
Snir suggests merchants step up verification on risky transactions and collect more information about customers to prevent digital shoplifting.
“Fight back,” Snir said. “Gain evidence that the consumers themselves are making the purchase by collecting further information and use that to deny claims or charge-backs. Doing so will help to prove that these purchases are legitimate.”
A version of this story originally published on Fortune.com on January 29, 2025.
More on Gen Z money habits:
- 1 in 3 Americans have no emergency savings—while boomers’ $2,000 cushion dwarfs Gen Z’s $400, survey finds
- The ‘godfather of financial independence’ says young people should do two things to build wealth—and it’s nothing ‘silly’ like buying a house
- The ‘Great Lock-In’ is more than a Gen Z TikTok trend—it’s a rejection of millennials’ ‘soft life’ and taking back power in this economy
