Customer sent an AI-generated damage photo? What to do (US)

A customer says the item showed up broken and sends a photo. Something about it bothers you: the crack is too clean, the lighting is off, the background looks like a catalog shoot. You’re not the only one seeing this. In February 2026, Boll & Branch CEO Scott Tannen flagged damage photos of “torn” sheets where the rip didn’t look like real cotton and one image carried an AI watermark. PYMNTS reported that retailers are seeing a wave of AI-faked damage claims. In June 2026, Retail Rewired reported Forter data calling AI-generated damage claims one of the fastest-growing forms of returns abuse.

Here’s a practical playbook.

Step 1: Don’t accuse the customer

Plenty of damage claims are real, and a weird-looking photo is often just a cheap phone camera. Accusations can also backfire. In an Amazon seller forum thread on AI-image refund fraud, the seller says the buyer reported them, and they received a policy warning.

Keep it neutral: “Sorry about that! To get this resolved fast, could you send a few more photos?”

Step 2: How to tell if a damage photo was made or edited with AI

No one check settles it. Stack several (our guide to spotting fake damage photos has more).

Signs of AI edits

Damage that doesn’t behave like the material: fabric rips with no frayed threads, cracks that curve neatly around details, dents with no stress in the finish.
Garbled text on labels, or your logo almost-but-not-quite right.
Shadows and highlights on the damage that don’t match the rest of the scene.
Waxy surfaces, odd fingers, warped edges.
A visible AI watermark in a corner, as in the Boll & Branch case.

Metadata (EXIF) Check the original file for camera make, capture date and dimensions. No camera data plus a square, generator-style resolution is a flag. But lots of apps strip metadata on send, so missing EXIF proves nothing by itself.

Watermark checks At the time of writing (October 2026), Google’s Gemini app can check an uploaded image for Google’s SynthID watermark. It only recognizes Google’s own AI output, so a clean result doesn’t make a photo genuine.

Reverse image search Run it through Google Lens or TinEye. If the “damaged” product shows up in a review, a forum post or another seller’s listing, you’re done.

Step 3: What you can reasonably ask for

Ask for things that are easy for an honest customer and hard to fake:

A fresh photo with something only they can add right now: a sticky note with today’s date and the order number, placed next to the damage. A pre-generated image can’t include a note you just requested.
Several angles: the whole item, a close-up of the damage, and the sides and back.
The box and shipping label. Real transit damage usually shows on the outer carton, and you’ll need this for a carrier claim anyway.
A short video or video call. Boll & Branch shut down its case by asking for a FaceTime call. The customer never answered.

One clear request beats five rounds of back-and-forth.

Step 4: Know where US rules put the risk

There’s no single federal law like the UK’s Consumer Rights Act that spells out a buyer’s damage remedies. Contract terms, state law, marketplace policies and card network rules do most of the work.

State law (the UCC). Sales of goods are governed mainly by each state’s version of the Uniform Commercial Code, and consumer protection statutes vary by state. Under UCC § 2-509, risk of loss in a shipment contract passes to the buyer when the goods are handed to the carrier. In a destination contract, it passes when the goods are tendered at the destination. Your checkout terms decide which you have, and many sellers promise delivery in good condition anyway.
In practice, card networks treat transit damage as your problem. Visa’s Dispute Management Guidelines for Visa Merchants (June 2024) list “damaged during shipment” as a common cause of a “not as described or defective” dispute, and say your return policy “has no bearing” on that dispute condition. Marketplaces generally add their own buyer protection on top.

So the realistic question isn’t “am I legally liable?” It’s “can I show the item wasn’t damaged, or was damaged by the carrier?”

Step 5: When to ask for the item back

Ask for a return (with a prepaid label) when:

the item is worth more than the return shipping;
the photos are inconclusive; or
you suspect the item is fine and the goal is a free product.

A return also protects you in a chargeback. Visa’s guidelines let you respond that the returned merchandise was never received and the cardholder never attempted to return it. For low-value items, a returnless refund can still make sense. See returnless refunds without getting scammed.

If the damage is real, file with the carrier. USPS damage claims can be filed by the sender or the recipient, within 60 days of the mailing date, and only cover insured mail. USPS asks you to keep the packaging and contents until the claim is settled and may want to inspect them. UPS and FedEx run their own claims processes with their own deadlines and liability limits, so check the carrier’s claims page before you refund and discard anything.

Step 6: If you confirm the photo is fake

Decline politely. Stick to facts: “We weren’t able to verify the damage from the photos, and the returned item shows no damage.” Leave “fraud” out of the message.

Save the evidence. Keep the original files, messages, tracking, your packing photos and any reverse-search hits. That’s your chargeback file (see chargeback evidence when an item “arrived damaged”).

Report it to the marketplace. Most marketplaces have a way to report a buyer; check your platform’s help pages. In the Amazon thread above, other sellers recommend reporting buyer abuse and filing a SAFE-T claim if Amazon refunds them anyway.

Fight the chargeback with your payment provider. These usually come through under Visa condition 13.3, “Not as Described or Defective Merchandise/Services”. Mastercard uses reason code 4853, which Stripe lists as “Defective or Not As Described”. Stripe suggests evidence like pre-shipment photos and customer messages. Visa recommends answering each point the cardholder makes.

Report the fraud.

Local police, especially if the loss is significant or the buyer is local. Keep any report number with your evidence.
IC3, the FBI’s Internet Crime Complaint Center. It says “anyone who believes they are affected by a cyber-enabled crime” may file. It refers complaints to other agencies; investigation is at their discretion.
The FTC at reportfraud.ftc.gov. Reports feed the Consumer Sentinel Network, a database that law enforcement agencies can search. It helps spot patterns, but it won’t get your money back.

Step 7: Protect yourself next time

Policy wording. Put this in your shipping or returns policy and link it from checkout:

“If your order arrives damaged, contact us within 7 days of delivery. We may ask for photos taken at the time, including the box and shipping label, or ask you to return the item for inspection with a prepaid label.”

Check that your wording doesn’t clash with your marketplace’s own guarantee or your state’s consumer law.

Packing photos. Snap the item and the sealed box before it ships. It’s your “before” picture.

Live-capture evidence. The best evidence is a photo that couldn’t have been made in advance. A handwritten code in the shot does that by hand; tools like ClaimCam automate it.

Worked example

Say a customer buys a $240 hand-thrown ceramic planter from your Etsy shop. Three days after delivery they message one photo of a chunk missing from the rim and ask for a full refund.

You check the file: 1024×1024, no camera data. The break edge is perfectly smooth, with no exposed clay color. Reverse image search finds nothing.
You reply: “So sorry! Could you send three photos: the whole planter, the damage next to a note with today’s date and your order number, and the box with the label?”
They send the same image again, cropped. No note.
You offer a prepaid return label: “Send it back and we’ll refund as soon as we see the damage.” The label costs you about $18, which is worth it on $240.
They decline and file a chargeback. You submit the messages, both image files, your packing photo, the return-label offer and tracking showing delivery.
Separately, you report the buyer through Etsy and file with IC3, noting the case in your records.

You’ve stayed reasonable throughout, and your dispute response tells a clear story.

Checklist

How ClaimCam handles this

ClaimCam gives you a claim link to paste into your reply by email or in your store’s helpdesk (not in Amazon or eBay messages, which don’t allow links). The customer’s phone opens a live camera in the browser with no upload button, so camera-roll or AI-edited images can’t be submitted. They write a one-time code on paper and keep it in frame for three guided photos: the whole item, the damage close-up, and the box and label. Every frame is fingerprinted and timestamped by the server, and an AI check reads the handwritten code and flags photos of a screen or printout. You get a private evidence page you can save as a PDF for a dispute. It’s deterrence plus evidence, not proof: a customer who really damaged the item can still photograph real damage.

This is general information, not legal advice.