AI-Generated Images Used for Fraudulent Refunds in Chinese E-Commerce
Consumers in China are reportedly using AI-generated images to falsely claim product defects and obtain refunds without returning items, exploiting "refund-only" policies on e-commerce platforms. The practice gained attention after the November 2025 "Double Eleven" shopping festival, with merchants reporting widespread fraud and consumer protection authorities warning that such behavior violates principles of good faith and may constitute illegal deception.
What happened
Multiple merchants reported that consumers are using AI-generated images to claim product damage and request refunds without returning goods. Consumers use simple prompts to add artificial defects such as mold on fruit, dirt on plush toys, or splits in shoes to images of undamaged products.
The practice exploited e-commerce platforms' "refund-only" policies and automated review systems that process refund requests quickly when images are submitted. Some consumers reportedly obtained repeated refunds through this method; one account was said to have succeeded 30 times. Some sellers of AI-generated refund tutorials promised customers they could obtain refunds through coordinated fraud schemes.
Reported impact
Merchants reported suffering financial losses on small-value orders (under 100 yuan) where return shipping costs made it easier to grant refunds than investigate. Some merchants faced threats of negative reviews when they questioned refund requests, and others were forced to refund money despite believing the images were fraudulent.
The Jiangsu Provincial Consumer Protection Commission noted that if such disputes continue, merchants may respond by raising prices or restricting refund policies, increasing consumer costs across the entire market and reducing trust in e-commerce platforms.
Index analysis
E-commerce platforms' automated review systems could not reliably distinguish AI-generated images from authentic product photographs. The practice disproportionately affected low-price goods such as fruit and small items where return logistics were expensive.
Governance controls
The Jiangsu Provincial Consumer Protection Commission issued guidance that merchants may request multiple-angle photographs or unedited video from consumers to verify product condition, and recommended use of AI detection tools to identify fabricated images. The commission stated that consumers using AI-generated false evidence to obtain refunds violate China's Civil Code principles of good faith and may face legal consequences for fraud.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.