In late 2024, retail giant Macy's announced that a single employee had managed to hide $151 million in parcel delivery expenses over nearly three years. The fraud was elegant in its simplicity: intentionally erroneous accounting entries that masked a portion of the company's shipping costs, representing about 3.5% of their total delivery spend during that period.

If a national brand with sophisticated financial controls can miss $151 million in shipping fraud, what does that mean for your e-commerce operation?

The Macy's case is not an isolated incident. Between 2023 and 2025, shipping fraud has evolved from an occasional headache into a full-blown epidemic that's leaving merchants scrambling. Freight fraud losses alone surpassed $455 million in 2024, with roughly 65,000 thefts—a 40% jump from the previous year. Meanwhile, e-commerce return fraud hit $102 billion in 2023, up 20% from $85 billion in 2022.

Shipping fraud leads to losses from stolen merchandise, vanished shipments, manipulated records, and fraudulent claims that directly impact your bottom line. And the criminals behind these schemes are getting smarter, leveraging everything from AI-generated deepfakes to sophisticated double-brokering operations.

Let's break down what's actually happening out there, why your shipping operation might be more vulnerable than you think, and what you can do about it.

How Big Is the Shipping Fraud Problem?

The scope of shipping fraud in 2024 and 2025 was staggering, and it continues to grow faster than most businesses can adapt. Consider these trends:

On the freight side, incidents increased by 50-200% year-over-year in 2024, depending on the region. The average loss per freight fraud incident now exceeds $400,000.

On the e-commerce side, the fraud rate on returns climbed from 10.4% in 2022 to 13.7% in 2023. That means roughly one in seven returns now involves some form of fraud or abuse. When you're processing thousands or tens of thousands of returns, that adds up fast.

Geography matters too. California, Texas, and Illinois have become fraud hotspots, accounting for nearly 52% of theft. If you're shipping significant volume through these states, you're operating in the fraud equivalent of a lightning storm. Some regions have also seen double-brokering activity, which is where fraudulent carriers take your load and resell it to another carrier without authorization, increase by as much as 400%.

The cumulative impact is hard to overstate. One security report estimates that global scam losses across all channels reached around $1 trillion in 2024, with 70% of consumers saying scams have become harder to spot in the past year.

Four Major Shipping Fraud Trends Threatening Your Business

When Customer-Friendly Return Policies Become Costly Liabilities

Return fraud has become the silent profit killer for e-commerce businesses. At $102 billion in 2023, relaxed return policies can make or break your margins.

The mechanics of return fraud have become almost normalized. Research from late 2024 found that 76% of shoppers admit to embellishing return reasons to avoid restocking fees or return shipping costs. That's up 39% from 2023. Even more concerning, about 69% say they engage in "wardrobing," the practice of buying items with the explicit intent to use them briefly and then return them.

Think about what that means for your inventory. A customer orders a dress for a wedding, wears it once with the tags tucked in, and sends it back claiming it didn't fit. You can't resell it as new, but you're stuck eating the cost.

The Buy Online, Return In Store (BORIS) model has become a particularly vulnerable point. Nearly 49.7% of e-commerce returns in 2023 used BORIS, and these in-store drop-off returns showed fraud rates that were 48% higher than other return methods. The disconnect between your online systems and in-store processes creates gaps that savvy fraudsters exploit. An empty box gets returned. A cheaper substitute item shows up instead of what you shipped. The packaging looks right, but the product inside isn't.

The Macy's Case: When the Threat Comes From Within

External fraud gets most of the headlines, but the Macy's case reveals a darker truth: sometimes the biggest threat is already inside your organization.

Over nearly three years, from Q4 2021 through early November 2024, a single Macy's employee systematically concealed parcel delivery expenses through accounting manipulation. The scheme eventually totaled $151 million—enough to force financial restatements and draw intense regulatory scrutiny.

What's particularly unsettling about this case is how long it went undetected. This wasn't a complex Ocean's Eleven operation with multiple conspirators and elaborate cover-ups. It was one person making erroneous accounting entries in the delivery expense category, hiding costs that should have been obvious in a company that spent $4.36 billion on delivery during that same period.

The lesson here cuts to the core of operational controls. If your shipping expense accounts aren't regularly audited, if you don't have segregation of duties in parcel management, if your invoicing reconciliation is manual rather than automated, you've created an opportunity for fraud.

External parcel fraud is also climbing alongside e-commerce volume growth. Package theft, fake delivery confirmations, and shipment redirection schemes target the last-mile delivery phase where visibility often drops off. A driver marks a package as delivered that never actually made it to the door. A fraudster intercepts your carrier's communications and redirects a shipment to a different address. By the time you realize something's wrong, the merchandise is long gone.

This is where working with a shipping insurance provider who investigates claims thoroughly makes a tangible difference. They verify delivery documentation, cross-reference tracking data with carrier GPS records, and look for patterns that suggest something more than a simple lost package. When a claim comes through, they're asking the hard questions: Was this shipment actually delivered where it was supposed to go? Does this driver have a history of "lost" packages? Is the documentation authentic or manipulated?

Ghost Trucks and Fake Carriers: The $35 Billion Freight Nightmare

Even if your e-commerce business primarily ships parcels, understanding freight fraud matters because these tactics are increasingly bleeding into the parcel world. The criminals running these operations are sophisticated, well-organized, and extremely effective.

In 2024, cargo theft incidents jumped to 3,798 cases, a 26-27% increase over 2023. The average loss per incident climbed from $187,895 in 2023 to $202,364 in 2024. Industry experts estimate that overall freight fraud exposure could reach $35 billion in 2025.

The "strategic" theft category—where criminals impersonate legitimate freight companies, forge documents, and use AI-assisted phishing to gain control of loads—now accounts for about 18% of recorded incidents. These aren't opportunistic smash-and-grabs. They're carefully planned operations that exploit weaknesses in carrier vetting and communication protocols.

Double-brokering complaints have skyrocketed 400% since 2022. Here's how it typically works: a bogus broker or carrier accepts your load using stolen or fabricated credentials. They reassign it to another carrier without authorization, pocket the difference, and then disappear. You're left disputing payment with a legitimate carrier who thought they had a valid contract, while your freight is either lost or being sold off in pieces.

The tactics have become disturbingly sophisticated. Fraudsters spoof email domains that look almost identical to legitimate carriers. They hijack transportation management system (TMS) logins through phishing attacks. Some even purchase "clean" Department of Transportation (DOT) inspections to make new carrier identities appear credible, giving them access to higher-value freight.

Then there's Bill of Lading (BOL) skimming, a scheme that's gained traction in 2025. A carrier picks up your full load—let's say 24 pallets. They offload most of it for resale on the black market, then alter the BOL so it appears only the small portion they actually delivered (maybe 4 pallets) was ever shipped. The receiver signs the falsified document thinking the rest is still in transit. By the time you discover the short shipment, the fraudsters have had days or weeks to move the stolen freight and cover their tracks.

Carrier vetting is simply non-negotiable for e-commerce businesses shipping high-value products or working with third-party logistics providers. Verify DOT numbers. Check insurance coverage. Look at track records and reviews. Require multi-factor authentication on any platform where shipping instructions can be changed.

And when something does go wrong—because eventually, something will—you need shipping insurance backed by experienced claims investigators who understand these schemes. They know what questions to ask. They verify carrier credentials and delivery documentation. They spot the patterns that distinguish a legitimate loss from a sophisticated fraud operation. Most importantly, they prevent you from paying out on fraudulent claims that would otherwise go undetected.

When Technology Becomes the Criminal's Best Tool

Artificial intelligence has transformed fraud from a labor-intensive operation into a scalable, automated threat. The same technology that helps you optimize inventory and personalize customer experiences is now helping criminals steal from you with unprecedented efficiency.

Generative AI allows fraudsters to create highly convincing fake e-commerce storefronts complete with AI-generated product descriptions, professional-looking images, authentic-seeming customer reviews, and even fabricated brand histories. These sites look so legitimate that even savvy online shoppers struggle to identify them. Once a customer places an order, the site either ships a counterfeit item, ships nothing at all, or uses the transaction to harvest payment information for future fraud.

AI also powers sophisticated social engineering attacks. Criminals scrape data from your website, social media, and public records to craft personalized phishing emails that reference real employees, actual vendors, or recent transactions. They use voice cloning technology to impersonate executives or vendors over the phone, requesting shipping instruction changes or payment redirects. Deepfake video calls can make verification conversations feel genuine when they're anything but.

Among people targeted by AI-driven attacks like deepfakes, about 27% reported being successfully defrauded. That success rate is alarmingly high and shows why traditional verification methods—like "I'll call them back to confirm"—aren't always enough anymore.

The shipping implications are direct and damaging. A fraudster uses AI-generated emails to access your freight management system, alter routing instructions, and redirect a truck to a warehouse they control. Or they use a cloned voice to call your fulfillment center and change a delivery address for a high-value order. By the time you realize what happened, your merchandise is gone, and the digital trail has been carefully scrubbed.

Protecting against AI-enabled fraud requires layered verification. Multi-factor authentication on all shipping platforms. Established communication protocols that don't rely solely on email or phone. Verification callbacks using known contact information, not numbers provided in suspicious requests. Regular security training so your team knows what these attacks look like.

The Costs You're Not Counting

Direct losses from stolen shipments and fraudulent returns are obvious and painful. But shipping fraud carries hidden costs that can be even more damaging over the long term.

Customer trust erodes when fraud affects delivery reliability or product availability. If your inventory shows an item in stock but fraudulent returns have left you with damaged or fake products, you're making promises you can't keep. Legitimate customers pay the price through delayed shipments and disappointing experiences.

The operational burden is substantial. Hours spent investigating discrepancies, disputing chargebacks, and tracking down missing shipments add up quickly. Your team's time could be spent on growth initiatives instead of playing detective on suspicious returns or lost freight.

Many businesses respond to rising fraud by tightening return policies, adding restocking fees, or making the return process more cumbersome. Those measures might reduce fraud, but they also frustrate your honest customers—the vast majority of your base—who expect the convenient, flexible return policies they've come to rely on.

Insurance premiums in high-fraud categories are climbing, too. If you're seeing elevated claims in certain product lines or shipping lanes, expect your costs to reflect that risk. And if you're not careful about which insurance provider you choose, you might be paying premiums while still eating losses on fraudulent claims that should never have been paid.

Then there's the regulatory risk. Macy's had to restate its financials and face intense scrutiny from investors and regulators. For smaller e-commerce businesses, a significant fraud event can trigger audits, damage banking relationships, or complicate fundraising efforts.

The supply chain disruption from fraud creates ripple effects. When a shipment is stolen or diverted, you're not just out the merchandise—you're scrambling to fulfill the customer's order from remaining inventory, potentially disappointing other customers in the process, and dealing with the reputational fallout.

Building a Fraud-Resistant Shipping Strategy

Creating a shipping operation that can withstand fraud pressure requires a combination of smart operational practices and strategic partnerships, particularly with the right shipping insurance provider.

Prevention Best Practices

On the return fraud front, start by implementing selective restocking fees that discourage casual wardrobing without punishing legitimate returns. Require original packaging and tags for full refunds on certain product categories. Track return patterns by customer account. If, for example, the same person is returning 60% of what they order, that's not normal shopping behavior.

For high-risk categories like jewelry, electronics, or luxury goods, shorter return windows can help. A 14-day window instead of 30 days reduces the opportunity for wardrobing while still giving honest customers plenty of time to evaluate their purchase.

Require signature confirmation for shipments over a certain value threshold. GPS tracking for high-value freight is also essential. If you can't track a $50,000 shipment in real-time, you're operating blind.

Establish secure communication channels for any shipping instruction changes. If someone emails you asking to redirect a shipment, call them back using known contact information to verify. Don't use phone numbers or email addresses provided in the suspicious request. Implement multi-factor authentication on every platform where shipping routes, delivery addresses, or payment information can be modified.

Internal controls matter just as much. Regular audits of shipping expense accounts can catch anomalies before they balloon into Macy's-level problems. Segregate duties so that the same person who authorizes shipments isn't also reconciling invoices. Automate invoice reconciliation wherever possible. Humans are fallible, but automated systems will consistently flag discrepancies.

The Shipping Insurance Imperative

Even with perfect prevention practices, you will eventually face shipping fraud. The criminal operations we've discussed are too sophisticated, too well-funded, and too adaptable for any business to maintain a 100% success rate at stopping them.  

The right insurance does more than transfer financial risk. It provides access to professional claims investigations that actively protect you against fraudulent claims, not just legitimate losses.

Think about what happens when you file a claim with an insurance provider who doesn't investigate thoroughly. They might pay out automatically to maintain processing speed and customer satisfaction. That sounds convenient until you realize you're subsidizing fraudulent claims through higher premiums, and the criminals have learned your insurance is an easy mark. They'll be back.

Now consider what happens with an insurance partner who has proven claims investigation capabilities. When a claim comes in, they verify everything: carrier credentials, delivery documentation, return item condition and authenticity, unusual claim patterns that suggest organized fraud, and digital evidence in AI-enabled fraud cases.

These investigations serve multiple purposes. They prevent you from paying out on fraudulent claims, obviously. But they also deter repeat fraud attempts—criminals move on to easier targets when they realize your insurance provider actually checks the details. And perhaps most valuably, they provide data that helps you improve your fraud prevention over time. Patterns emerge. Vulnerabilities become clear. You can make informed decisions about where to tighten controls based on actual attempted fraud, not guesswork.

Fast claims processing matters, but not at the expense of thoroughness. You need an insurance provider who can balance speed with diligence, who won't leave you waiting for months but also won't rubber-stamp claims without verification.

The partnership approach is what separates adequate insurance from excellent insurance. You want a provider who views their role as helping you build a more fraud-resistant operation, not just cutting checks when things go wrong. They should offer fraud analytics and reporting that identify trends in your claims data. They should be willing to consult on prevention strategies. They should act as an extension of your risk management team, not just a financial backstop.

Where Do You Go From Here?

Shipping fraud in the last few years has evolved into a sophisticated, multi-billion-dollar threat that shows no signs of slowing down. Your business faces unique vulnerabilities depending on what you sell, where you ship, and how you handle returns. But every e-commerce operation shares common exposure points: return processes that can be exploited, carrier relationships that need vetting, internal controls that require regular auditing, and digital systems vulnerable to AI-enhanced attacks.

The goal isn't to eliminate all risk—that's impossible. The goal is to build a shipping operation resilient enough to withstand fraud pressure without sacrificing the customer experience that drives your growth. You can maintain flexible return policies if you have the insurance and investigation capabilities to catch abuse. You can work with competitive carriers if you have the vetting and verification processes to avoid ghost trucks and double-brokers. You can embrace AI-powered tools for your business while defending against AI-powered attacks.

Start by auditing your current shipping and return processes. Where are the gaps? What would a determined fraudster target? Then evaluate your shipping insurance coverage and claims investigation capabilities. Are you truly protected, or are you just hoping fraud happens to someone else?

Then, reach out to Cabrella. We can make sure you have the customized insurance program you need to protect your business.