The best way to detect return fraud is to document serial numbers or other identifiers on the items you sell such as taking a picture so you have a physical evidence of the items you sell. When you receive a returned item, investigate it!Always take pictures of your serial numbers on the items you sell and include the picture of the serial number in the actual auction listing when you sell the item. This way it is clear that you recorded the serial number with the item before the item was sold and falsely returned. Your first step of evidence is to show PayPal you recorded the serial number before selling the item and the item you received in return from the buyer contains a different serial number. You can take a picture of the returned item's serial number and present both pictures to PayPal as evidence. The next step is to have a police report filed with law enforcement. You can simply present a print out of the original auction listing with the pictures (including the picture of the serial number) and then have law enforcement compare it against the actual item you received in return from the buyer. Law enforcement will write up a police report documenting the evidence and provide you with a copy a few days later.  Then send the police report to PayPal via fax or e-mail and it will be added as evidence to the PayPal dispute. PayPal still may take 30 days or more to decide the case and present a verdict, but at least you will eventually get your money back. As for the fraudulent buyer who committed return fraud, he or she may or may not suffer any repercussions, depending on whether PayPal or law enforcements seeks action. However, you can report your evidence to eBay so that they can suspend the fraudulent buyer's account in order to prevent future harm to other sellers.