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# Customers Sent AI-Generated Photos of "Damaged" Sheets That Never Existed. Some Still Had the Watermark.
- URL: https://whywecanthavenicethings.info/customers-sent-ai-generated-photos-of-damaged-sheets-that-never-existed-some-still-had-the-watermark/
- Published: 2026-08-09T13:00:00.000Z
- Updated: 2026-08-09T13:00:00.000Z
- Author: The Complaints Department
- Tags: Investigations

E-commerce retailers spent the last decade streamlining damage claims into something almost frictionless: send a photo of the torn or wrong item, get refunded, keep the item, no box to ship back. Late in 2025, Scott Tannen, CEO of the New Jersey bedding company Boll & Branch, went public with what his team had actually been receiving — AI-generated photos of "torn" sheets that had arrived perfectly intact. Some of the fake images still had the AI generator's watermark on them.

## A Photo Was Cheaper to Trust Than a Return Was to Process

Returnless refunds exist because verification costs more than the fraud it's meant to catch, for the overwhelming majority of claims — it's cheaper to take a customer's word and their photo than to pay return shipping and restock a damaged item nobody can resell anyway. The whole system assumed the photo was real, because for most of its history, it reliably was.

## The Watermark Was Still On the Fake

Tannen described what his team found on LinkedIn, later picked up by PYMNTS: customers submitting AI-generated images of torn sheets to claim refunds on product that had shipped fine and stayed that way. The tell, in some cases, wasn't subtle — the generator's own watermark was still visible in the image being submitted as proof of damage.

## Photo Verification Was Built to Catch a Different Kind of Fake

The system was designed to flag obvious mismatches — a photo of the wrong item, a stock photo lifted off the internet — not a synthetic image generated to order and tailored to whatever complaint would get a refund approved. Generative AI didn't break the verification process so much as walk straight past what it was actually checking for.

## Every Return Is Now a Risk Score, Not a Policy

By the 2025 holiday season, a UPS subsidiary was deploying AI-based inspection technology specifically to screen incoming returns, while vendors like Riskified and Narvar began selling risk-scoring products that sort customers into different return experiences based on history rather than treating every claim the same. The National Retail Federation reported in October 2025 that nearly two-thirds of retailers planned to tighten their returns process within six months — the industry's own description of the shift is a move from one uniform policy for everyone to a "risk-based" one, meaning even a first-time customer with a genuinely damaged order now faces more scrutiny than a photo alone used to require.

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*Filed from public reporting:*

- [*PYMNTS — AI-Generated Damage Claims Trigger Retail Crackdown on Return Fraud*](https://www.pymnts.com/news/retail/2026/ai-generated-damage-claims-trigger-retail-crackdown-on-return-fraud/)