Cloth Diaper Warranty Fraud is on the Rise

I’ve known for years that we were seeing occasional instances of warranty fraud coming into our returns department. Recently though, we have started seeing an increasing pattern of this behavior that we finally decided to mentioned publicly, both for the benefit of consumers who may not know that this behavior is illegal and for the benefit of manufacturers & retailers who may be unknowing participants in illegal activity.

Here are a couple of examples of things we’ve seen:

One woman was buying used diapers on eBay. She called our customer service department, shouting, telling them that her diapers had failed… again. We were spending a great deal of time trying to figure out what was going on with her washing routine before we finally uncovered her scheme. By then, she had sent in over 300 diapers for “replacement” and resold the new product on eBay.

Another woman got over 100 used diapers replaced with the help of a retailer giving her fake receipts. Her “replacement” diapers were then sold on Diaper Swappers.

Another woman, who has since gone to jail for fraud, was stealing product from her local retailers and then sending it to other retailers, including Cotton Babies, for a “refund” or “store credit”. We weren’t responsible for turning her in to the authorities, but she was arrested and eventually went to jail for her crime.

Here’s the deal:

In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual. (Wikipedia)

Fraud is illegal. We are paying attention and hope this post increases the attention being paid to this issue by other retailer and manufacturers within in our industry. If you are a consumer and involved in this kind of behavior, please remember that your children watch you. If mommy is stealing, they will too.

Jenn is the Founder and CEO of Cotton Babies. She holds an Executive MBA from Washington University. She was awarded Ernst & Young’s Entrepreneur of the Year award in the Emerging Category for the Central Midwest Region in 2011. Among many other awards, she recently received a 2017 YWCA Leader of Distinction Award for Entrepreneurship. Jenn holds many patents on various inventions in a number of different countries and is listed as one of 50 Missourians You Should Know. She is particularly fascinated by languages, chickens, and children (she has four) when she’s not reading economics journals.

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