Myntra has reportedly suffered a huge loss of Rs 50 crore due to a well-planned scam involving fake orders. While the company has officially filed a complaint with the Bengaluru Police worth Rs 1.1 crore, a Times of India report suggests that with the scam unfolding between March and June this year, the total loss across the country is much higher.

According to the report, fraudsters took advantage of Myntra’s refund system by placing bulk orders for high-value items like branded shoes, apparel, cosmetics and jewellery.

Once the items were delivered, they would make false complaints, claiming that the number of items received was less than what they ordered or that the products were incorrect or counterfeit. For example, if someone ordered 10 pairs of shoes, they would charge that only five were delivered and request a refund for the remaining items. Similar complaints were made about mismatch of color and size of clothes, among other issues.

Myntra’s customer service platform, which was designed to resolve genuine complaints, became the target of this scam. For your reference, the company’s app allows users to complain for issues like missing items, wrong products, or poor quality, and in many cases, the refund process will be initiated without much verification. This flaw allowed fraudsters to exploit the system repeatedly.

An internal audit eventually exposed the fraud, revealing that more than 5,500 fake orders were placed in Bengaluru alone. The scam is believed to be perpetrated by a group based in Jaipur, Rajasthan, which involved placing orders from Jaipur while providing delivery addresses in major cities like Bengaluru. Some orders were also delivered to unusual locations such as tea shops, tailor shops and small provision stores, making the fraud difficult to detect.

Myntra’s enforcement officer Sardar MS reported the matter to the police, focusing on the losses incurred in Bengaluru. The company initially wanted to file a complaint for total loss across India, but local officials advised them to limit the complaint to city-specific cases for now. The investigation is ongoing, with police working to track down the scammers and possibly recover some of the lost funds.