VitalGlow
Beauty & Skincare • $12M ARR
How a subscription skincare brand caught $67K in fraudulent refunds from customers gaming their allergy policy.
$67K
Fraudulent refunds
156
Customers exploiting
45x
ROI on audit
94%
Fraud reduction
The Problem
VitalGlow runs a subscription skincare brand with a complex refund policy: no refunds after 30 days, but exceptions allowed for allergic reactions.
The support team had discretion on “allergic reaction” claims with no verification process. Dashboard showed normal refund volume, but margin was quietly eroding.
No verification for allergy claims
Wide variance in approval rates
What Merro Found
43% of “allergic reaction” refunds were approved for customers who placed new orders within 7 days—often for the same product they claimed to be allergic to.
Cross-referencing Shopify order data revealed a clear pattern: 156 customers were gaming the system. One agent approved 89% of these claims vs. team average of 34%.
Key Findings
The Fix
Order History Cross-Check
Implemented automatic flag for allergy claims from customers who reorder within 14 days.
Tiered Approval System
Refunds over $50 now require supervisor approval with documented reason.
Agent Calibration
One-on-one coaching for high-approval agents with clear guidelines on verification.
Results After Policy Update
94%
Reduction in fraudulent claims
45x
ROI on audit
“Our agents were interpreting 'damaged product' exceptions completely differently. Merro caught the pattern across 200+ tickets. Fixed it in one training session.”
Marcus Rodriguez
CX Operations Manager
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