A shopper in southern China has been placed in administrative detention for eight days for using artificial intelligence to fabricate images and videos of dead crabs in an attempt to fraudulently obtain refunds, local media reported, highlighting a new technological frontier in retail fraud.
The incident came to light after a customer of Gao, an online seafood retailer based in Jiangsu Province, claimed that a customer who purchased eight live crabs on November 17th arrived the next day six dead. Gao was asked to refund 195 yuan ($27) after the buyer submitted photos and videos that appeared to show the dead crab, Qilu Evening News reported.
However, Gao immediately noticed something strange. The crab’s legs appeared unusually stiff and upright, and the flaps on the crab’s abdomen were rotated in a direction inconsistent with a natural death, raising suspicions that the images were generated or manipulated by AI.
Further investigation revealed further discrepancies. Despite the fact that Gao shipped four male and four female crabs, one video showed two male and four female crabs, while another video showed three males and three females.
Gao tried to contact the buyer but received no response. After posting a video online exposing the alleged scam, she faced complaints of invasion of privacy and subsequently received threatening messages from unidentified users. With the help of a friend, she reported the incident to Guangzhou police on November 28.
Police later issued an administrative penalty finding that the customer had used his cell phone to create a composite video of the crab carcass and fraudulently requested a refund. The purchaser was detained from Nov. 29 to Dec. 7, and the full refund was recovered, Gao said in a social media post.
The incident raises concerns among Chinese e-commerce merchants about a growing wave of AI-powered refund fraud, especially as major platforms begin to scale back their once-popular “refund-only” policies. Retailers say the policy was originally intended to simplify returns, but is increasingly being abused by unscrupulous customers who seek refunds without returning items.
In another incident in Yiwu city, Zhejiang province, a shoe retailer said a customer tried to use an AI-generated video to claim a refund for shoes costing just over 10 yuan. After wearing the shoes for a few days, the buyer complained that the stitching was loose. When the store asked the customer for proof by cutting off the shoe and photographing the damaged area, the buyer first submitted what appeared to be an AI-generated clip and only dismantled the shoe after the store insisted.
Gao urged e-commerce platforms to deploy technological tools that can identify AI-generated images and videos, saying merchants need stronger protection as fraud techniques rapidly evolve.
