This is a story about a new online scam of mafia, and how mafia can sell the same item to thousands of people LEGALLY.

I have wanted to have a Nikon D200 SLR Digital Camera for sometimes. So I went to an online price comparing site to see what merchant offers the best price, checked out if the merchant rating was good, and then made an order from that merchant.

I ordered a brand new Nikon D200 camera with Nikkor 18-200 lens, compact flash card, additional battery and filters, and everything came up to around $2500. However, when I received the order, the camera and the lens were open-box items. I cannot name the online price comparing site and the merchant, because I have no concrete evidence against them, should I decide to take them to court. Hell, now I can't even prove that I received open-box items, because when I opened the box, I was alone, and I didn't film the process of opening.

But from the condition of items when I opened the shipping box, there was no doubt that they were open-box items. The seals on the camera box and the lens box were both missing. All the plastic wrappers of the camera body and lens were opened. A cable did not have plastic wrapper. Some items suppose to be provided separately were already attached to the camera.

Receiving items that we don’t want? No big deal. In America, people buy and return things all the time. So I contacted my merchant, told them that I would return the open box item, and wanted my money back. They said that I could send it back, and provided me with the form and number to send. However, according to their return policy (posted very clearly on their site, and provided in some forms as well), all returned open-box items are subjected to 20% re-stocking fee plus shipping and handling fee, no matter what.

Of course I didn’t feel good about losing time and money. But even during the rage, something that didn’t feel right kept nagging at me. Setting aside the will to do battle and burn down their store, I could not resist thinking: “Why the hell would somebody want to do that kind of thing?”

They sent me open-box items for a brand new order, but things were arranged so badly that I knew immediately that they were open-box. And instead of having a rather good sale and getting a regular customer (I spend tens of thousands of dollars every year shopping electronic stuffs online), they got back an open-box item, an angry never-return-again customer and I lost over $500 for re-stocking fee and shipping and handling fee. It looked like lose-lose situation, didn’t it?

The obvious answer could have been that they were so stupid that they could not rewrap the items better to deceive me. I (and majority of people) would have a tendency to think that other people are stupid ;-)

However, having been earning a living all my life by solving logical problems, I simply could not accept this audaciously illogical situation. So I did a little more digging, and here is the answer: “They wanted me to figure out that they sent me open-box items, and wanted me to return.”

You can ask: “Why the hell do they want that?” Please think for a while before read on.

Now things turn interesting. By doing that, they can sell one item over and over again (LEGALLY) to practically thousands of people.

This is one mafia scam, and here is how they do business:

A mafia mob opens an online website to sell stuffs. In order to get good money, it is most likely an electronic online store that sells laptops, computers, cameras …etc…

The characteristics of those sites are:

- They often offer cheaper prices compared to other big and reputable companies such as Ritz Camera, Circuit city, Best buy, B&H Photo Video …

- Most important of all, they demand a significant percentage of re-stocking fees and shipping and handling (S&H) fee, no matter what, very clearly posted in Return Policy on their site. Reputable merchants will refund full amount, or exchange for free, if they send customer bad items.

- They usually have bogus contact addresses somewhere in New York or New Jersey.

They can even fulfill cheap orders very well to get good merchant ratings. Or they can hire a bunch of people with cheap price to do bogus reviews, in order to get high ratings.

And they wait for people who order items that worth a couple of thousand dollars and pull their scam.

They send open-box items to the customer, instead of sending brand new ones, and they make sure that the customer (no matter how stupid he/she is) must figure out for sure that they receive open-box items. Nobody in his/her right mind would want open-box items instead of brand new ones, so the customer will return the damn things, and suffer the re-stocking fee. There is nothing they can do about re-stocking and S&H fees, because it is posted in advance in Return Policy.

In my particular case, instead of selling brand new stuffs to me for around $2500, earning couple of hundreds bucks revenue; they sent me open-box items, get the returned items and $500 restocking and S&H fees. And they can send THE VERY SAME items to other people with same order (for example people who order Nikon D200 Camera) again and again, and still get benefits from restocking and S&H fees.

Do you see the beauty of the scam? They don’t try to deceive people by pretending to say that their items are brand new. They readily accept that the items are open-box, apologize for their mistake and willingly to get them back. And their policy is posted clearly about the restocking fee and S&H fee in advance.

So, in my case, they still can get a couple of hundreds bucks revenue from restocking fees (they have to send stuff to me, so I suppose that they don’t have anything from S&H fee). They earn $400 restocking fee from me, and still get their camera back, so they can send THE VERY SAME camera to hundreds (or even thousands) of people. For the argument sake, suppose that they can send the same camera to 100 more people, the restocking fee they earn is

$400 x 100 = $40 000.

Amazing! Half annual salary of a good Senior Software Developer (not my salary though).

So, from one expensive camera, they can get $40 000 revenue, instead of only a few hundreds bucks.

With only a couple of open-box cameras and other items (which they can get cheap for open-box prices from somewhere else), they can make hundreds of thousands dollars, even millions, depends on how popular and how expensive the items are.

They keep the items circling around again and again, and that is the reason why their orders (at least the expensive ones) are often sent late.

So the moral lesson here is:

-          When you spend thousands dollars on an order, don’t try to save a hundred or two by ordering from non-reputable merchants. Always order from good and reputable merchants.

-          Merchant Ratings from Price Comparing Sites can be deceived by merchants.

-          Characteristics of mafia sites are:

o        Prices are a few hundreds bucks cheaper, too good to be true.

o        Always demand high percentages of restocking fees in Return policy.

o        Bogus addresses in New York and New Jersey.

The logic question about “Why the hell they sent open-box items to me and wanted me to figure out?” is solved.  However, there is another question remained: “What the hell do I do with the open box camera and lens now?”

Do you see the beauty of the paradox again? If I send back the items to them, I will lose $500 bucks, and help them to deceive somebody else. It is stupid to do so. If I keep the camera and lens, I get open box items for brand new prices, and it is stupid too, isn’t it?

So, God, please tell me: “What the hell do I do?”