New Startup Pinch AI Tackles The Growing Problem Of Ecommerce Returns Scams | AdExchanger

"If Q4 is the holiday shopping season, then Q1 might be the season of returns, or more specifically the season of return fraud. Retailers and ecommerce merchants are seeing a growing trend of returns and fulfillment scams that drain profit margins after big sales. This fraud was the impetus for Thursday's launch of Pinch AI, a startup that aims to mitigate such losses to fraud and marketing scams, with $5 million in venture backing."

"First-party fraud One type of ecommerce fraud is straightforward: when bots or malicious fraudsters use stolen identities or credit cards to complete a purchase. But first-party fraud, the type that Pinch is designed to handle, occurs when a shopper uses their own name and credit card but is "skimming the edges" of what they know to be right, Makhija said. Many such shoppers likely don't imagine themselves as fraudsters."

Retailers and ecommerce merchants are experiencing increasing returns and fulfillment scams that erode profit margins after major sales. Pinch AI launched with $5 million in venture funding to mitigate losses from return fraud and marketing scams. The company was founded by former PayPal and Google ecommerce and ad fraud engineers who witnessed high volumes of ecommerce fraud and backend losses. First-party fraud involves shoppers using their own identities but exploiting return policies through tactics like wardrobing and empty boxing. Wardrobing entails purchasing items to use briefly and returning them within the return window. Empty boxing involves returning packages without the original item, sometimes weighted to conceal the absence.

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