Under Chinese law, the penalty for fraud involving large sums can reach 10 years or more in prison. In March 2024, police reported unusual activity in refund operations after tracking a large number of returns where nothing was actually sent back. In the end, the platform noticed a glitch. Lou created a network to distribute the money. Chinese media reported that the funds were transferred quickly and spent by Lou on new phones and luxury clothing, and he even gave some to his friends until his scheme was uncovered. Investigators traced the accounts and tracked down Lou, arresting him. In July 2025, a court in Shanghai sentenced Lou to six years in prison. Lou moved the products to second-hand goods platforms and sold them, making a profit of approximately 4.01 million yuan, equivalent to $570,000. The South China Morning Post revealed that a 17-year-old named Lou exploited a loophole in a beauty platform's refund system to carry out fraudulent transactions worth $570,000. The newspaper stated that over several months, Lou placed orders using multiple accounts and then submitted refund requests using fake tracking numbers. Prosecutors stated that the teenager filed 11,900 fraudulent refund claims and received goods worth 4.76 million yuan, or about $680,000. Then came the resale stage.
