Fake Tracking ID (FTID), a package redirection scam, involves manipulating the tracking information on a label. Shipping companies only require the tracking information on a label to scan it. Scammers will manipulate the label to maintain scan functionality, which often triggers a refund issuance, while ensuring it gets lost. This manipulation varies in sophistication, ranging from intricate alterations to simple “cut and paste” methods. The tracking will often show as delivered to a random warehouse, designated for pickup, or will get lost once it passes the label scan at distribution. Ultimately, the recipient (if there is one) will have no idea who the package belongs to as the rest of the label, including return address, has also been edited.
According to the National Retail Federation, 13.7% of all returns are deemed fraudulent, with merchants losing an average of $13.70 to fraud for every $100 in returned merchandise. Scams like FTID highlight the growing issue of fraudulent returns and the financial toll they take on businesses.
What is Fake Tracking ID (FTID) and How Does it Work
Fake Tracking ID fraud involves manipulating tracking information on a return label to deceive shipping carriers and retailers. Since shipping companies rely primarily on the tracking barcode for scanning, scammers alter labels to ensure packages register in the system while ultimately getting lost. This manipulation varies in complexity, from simple cut-and-paste alterations to more sophisticated digital modifications.
Once manipulated, the tracking data may show the package as:
- Delivered to a random warehouse that has no association with the business
- Designated for pickup at an unspecified or incorrect location
- Lost after scanning at a distribution center, preventing the retailer from verifying the return
In many cases, the package — if it even arrives — will be missing key details, making it impossible to trace back to the original sender or recipient.
Detecting Fake Tracking ID Manipulation
Sometimes, scammers manipulate tracking details to show delivery to a different address within the same zip code. This can trick some shippers into accepting it as proof of successful delivery, leaving your business vulnerable to fraud. To determine if your business is being targeted, ask your team the following questions.
- Are refunds being issued upon label scan? If refunds are automatically processed as soon as a return label is scanned, scammers may exploit this by generating false scans or tracking updates without ever returning the actual item.
- Has your warehouse received numerous empty or incorrect packages? Fraudsters may send empty boxes, unrelated items, or even decoy packages labeled with your information. This enables them to exploit your return policy while appearing to comply with the process.
- Have you noticed an increase in lost or missing packages? A rise in lost or undelivered packages could indicate that scammers are manipulating tracking details to show a false delivery, preventing the legitimate return process from being completed.
How to Prevent Fake Tracking ID Scams
To reduce your business’s exposure to FTID fraud, implement the following preventive measures.
1. Issue Refunds Only After Inspection
Instead of issuing refunds as soon as a return label is scanned, wait until the returned items are received and inspected at your warehouse. This ensures that the product is legitimate and not an empty or fraudulent return. For more detailed strategies to prevent return/refund abuse, check out these resources on INR (Item Not Received) or return fraud.
2. Use QR Code-Based Returns
Partner with your shipping provider to implement QR code-based returns. With this method, customers must present a QR code at an authorized shipping location, where the carrier generates the return label on-site. This eliminates the risk of manipulated tracking IDs and ensures the package is securely sent to your designated return center.
3. Audit Return Shipments & Tracking Data
Regularly review return shipments for unusual or suspicious activity to help identify potential issues or fraud. Pay close attention to the following:
- A high volume of returns from the same customer or location, which could indicate abuse of return policies or fraudulent activity
- Tracking numbers that show inconsistent routes or unexpected destinations, as this may suggest tampering or incorrect handling during transit
- Patterns of lost or undelivered packages linked to specific return addresses, which could point to theft, delivery errors, or intentional fraud
By monitoring these details closely, you can better protect your business and ensure the integrity of your return process.
4. Train Your Team to Spot FTID Fraud
Educate your customer service and warehouse teams about FTID fraud indicators. Provide comprehensive training to help them identify suspicious returns, such as packages that don’t match the original weight or size, altered shipping labels, or vague tracking details. Encourage them to investigate any tracking discrepancies thoroughly and verify the origin and contents of returned items. Additionally, implement clear protocols for flagging and reporting potential scams to minimize losses and protect your business.
5. Strengthen Fraud Prevention With AI & Data Analytics
Consider using fraud detection software that integrates with shipping and returns data to protect your business from potential losses. By leveraging AI-driven analytics, these tools can analyze large volumes of data to identify suspicious return patterns, such as unusually frequent returns or mismatched shipping details. This allows your team to receive alerts about potentially fraudulent activity before issuing refunds, enabling you to take proactive measures to safeguard your revenue while maintaining a seamless experience for legitimate customers.
Stay Steps Ahead of Scammers
Fake Tracking ID fraud is a growing threat, but with proactive prevention strategies, smart shipping policies, and enhanced tracking security, businesses can protect themselves from falling victim. By strengthening return verification processes and leveraging technology, you can significantly reduce fraudulent refunds and safeguard your bottom line.
Looking for a comprehensive fraud prevention solution? Contact NoFraud today to learn how we help businesses stop eCommerce fraud before it happens.