[StanD]

  Has anyone else here come across the new korg tubes 'on a chip'?
 
They have a longer lifespan, run at a lower voltage and are much, much smaller.
 
Here is an article: http://hackaday.com/2015/02/02/tubes-on-a-chip/
 
It looks really great! There isn't a datasheet yet so I guess there is a bit of waiting to do...

If it sounds like SS many would be dissapointed.

 

[smitty1110]

  If it sounds like SS many would be dissapointed.

It probably won't, but I think we should all reserve judgement until someone actually implements something with it. The only problem I see is that it appears to be planned as a limited release, not a large-scale production product.

 

[UmustBKidn]

  I have a feeling that you are not familiar with the multiple quote button...

 
Actually, I just enjoy typing a lot.

 

[cspirou]

What I would really like to know is what music the people at Schiit listen to? I mean all this gear is ultimately for music.

 

[Jason Stoddard]

2015 Chapter 3:
Our Favorite Scammers
 
Yes, scammers.
 
Yes, as in people who are actually trying to get your gear for free.
 
Yes, as in criminals. People who are committing theft.
 
And yes, I know, in today’s blasé age, it’s fashionable to think, “Well, it’s a big company anyway, they’re just gonna claim insurance, nobody gets hurt, screw the man and the corporations and blah blah blah…”
 
Well, ****** you. Trying to get something from any company for free, whether it’s Time Warner or the smallest startup putting the founders’ every personal asset on the line to bring a new, innovative product to market, is stealing. Nothing more, nothing less. Let’s not sugar-coat it.
 
And let’s not dismiss it so easily. The reality is that most businesses don’t have insurance against fraudulent charges—or at least not insurance that provides complete coverage. When we get hit by scammers, it costs…and it raises the price of everything we do.
 
“Wait a sec,” you might be saying. “You use a credit card processor. They approve the transaction. Are you saying that some of those transactions they approve are scammers…and you’re on the hook for them?”
 
Yes, that’s exactly what we’re saying.
 
No processor, no matter how good, and no matter how iron-clad their policies may seem, will take 100% liability for scammers. Yes, even PayPal, with their “100% guarantee against fraud.” This is the reality. There’s a lot of fine print for them to hide behind.
 
So, let me put this clearly, for everyone who’s starting a business and planning on selling direct:
 

1. Yes, there will be fraudulent charges that are approved by your payment processor
2. And yes, you’ll be on the hook for them

 
 
The Reality: Scammers Are a Law of the Universe
 
Let me repeat that for clarity. If you have a business selling direct, you’ll be subject to scammers. You will be on the hook for some of them. And you’ll lose money on some of them. Period. End of story.
 
So what do you do about it? Hang up the whole idea of starting a business?
 
No, not at all. You do one of two things:
 

• Chalk it up as a cost of doing business, and factor it into your pricing.
• Get very good at identifying scammers, and work to circumvent them.

 
We chose the second option. And, in the process of running our business, we’ve gotten very good (but not perfect) at identifying credit card scammers, enough that we’ve limited our losses to far less than 10% of what they’d be if we relied on the card processor alone.
 
Now, we’re not going to outline all the methods we use to identify potential scammers here, because, let’s face it, some of them may be reading this. But we can definitely give you a general outline of how to spot the most obvious ones.
 
But first, let’s start with the stories.
 
 
The Maybe Scammer, Or Why Pick-Up May Not Be An Option Anymore
 
Until now, if you’d emailed Alex, Laura, or Amy and asked if you can pick up your products directly from us, you’d usually get a reply like this:
 
“Sure. Let us know when you’re coming by, between 10 and 4, Monday thru Friday, to pick up your order.”
 
In the near future, that response may read something more like this:
 
“I’m sorry, we’re just a factory, we don’t allow customer pick-up.”
 
Here’s why:
 
One Friday, we received an order for a very large amount of gear. Think, several thousand dollars worth.
 
In a business where most of our orders are for the budget lines, this raises red flag number one. The reality is, if you’re gonna scam, you’re gonna scam big (usually, unless you’re very sophisticated), so might as well go for it.
 
Second red flag: the billing and shipping address didn’t match. Both were to nearby cities in California, but they weren’t the same.
 
Third red flag: the shipping address appeared to be an apartment, rather than a detached house. Nothing against people who live in apartments, but why would someone who lives in a fairly tony area of one town ship it to an apartment in another city?
 
This was enough for us to do a little more investigation. Google Maps showed the shipping address wasn’t an apartment, but actually a PO box in a strip shopping center.
 
Woo-hoo. No way that was going to ship out.
 
We sent the buyer a polite note that his order looked a little, well, suspect, and that if he wanted the products, he could pay by a PayPal verified transaction (which would then put PayPal on the hook, rather than us.) As usual with most scam cases, we expected to hear nothing back from him.
 
Boy, were we wrong. This guy sent us a missive that was the email equivalent of the Tsar Bomba, calling our ancestry, motives, and ethics into question, belittling our judgment, and iterating what An Important Person He Was and how he wasn’t going to lower himself to pay via our instructions, no way, no how.
 
At that point, Alex responded, citing some of the things that made his transaction seem less than kosher, asked him to look at it from our point of view, and again invited him to pay via a transaction method which placed no liability on any legitimate party.
 
And that, we thought, was that. We went home for the weekend and didn’t worry about it too much.
 
At least until Monday, when the guy showed up.
 
Yes, as in drove his ass an hour up to see us and give us a piece of his mind. He spoke first with Amy. Alex, luckily, was in the shop and rapidly intervened, asking the man to leave.
 
Again, luckily, he did leave.
 
But he did sit there fuming in his car (with his girlfriend/wife) for a good ten minutes. He was so visibly disturbed that the staff locked the doors, in case he decided to come back.
 
Again, luckily, he didn’t.
 
I keep saying luckily, because it could have been very different:
 

1. Alex might not have been there, and then it would be Amy against a guy who apparently looked like an ex-high-school football player
2. He may not have left when Alex asked him, which meant that we’d have to call the police—and be on the hook for assault charges if anyone even dared to touch him
3. He may have come out of the car with a gun—disturbed people are, well, disturbed

 
But it all ended well, except for a large dose of stress we could have all avoided. If we went to locking the doors to the shop at all times, we wouldn’t have to deal with it at all. So if there’s a policy change, you know why.
 
“So who the hell was he?” you may be asking. “Some very ballsy scammer or a wealthy prick with an overinflated sense of entitlement?”
 
Honestly, we’ll probably never know. Maybe he was really trying to scam us. In which case, he gets the prize for the most titanium-balled scammer we’ve ever dealt with. Nobody else has actually shown up on our door.
 
Or maybe he was just a guy with ample amounts of both money and anger, who wanted to prove a point to the small people in the world. In that case, he also gets a prize—in this case, the #1 prospect we’d never want as a customer.
 

---

 

Aside (and warning, this may offend some people): Yes, there are people you simply don’t want as customers. People who take time out of their day to drive up and verbally assault you are one category. People who have uncontrollable anger issues are another.
 
And there are more—an unfortunate fact of selling volumes of inexpensive product. We simply cannot provide the hand-holding/hand-jobs/psychological support that some buyers of 5-figure gear expect.
 
To illustrate, I recently had dinner with the founder of another audio company, one much larger than Schiit. He also makes largely high-value products, and we’ve shared some of the same business challenges, so we commiserate and share ideas often.
 
During this dinner, he asked me, “Do you get these crazy emails that are like 8,000 words long from guys describing their history in audio and asking 35 questions about things like how the front end biasing is implemented and the ripple noise on the main supply and the listening tests you’ve done on different PC board substrates and what selection criteria you used for internal cabling and how long will the product really last outside of warranty and stuff like that?”
 
“Yes, we do,” I told him.
 
“What do you do about them?”
 
“We hit Delete,” I told him.
 
He just goggled at me a little. “Without answering them?”
 
“Right.”
 
“What happens when they come back insisting you answer their questions?”
 
“We hit Delete again,” I said.
 
“Huh,” he said, rubbing his chin thoughtfully. “I…but…hmm, well, we really can’t serve them in the manner they’re accustomed to anyway, right?”
 
“Right.”
 
“And engaging with them takes our engineering resources and won’t be to their satisfaction anyway, right?”
 
I nodded. “Correct.”
 
“So it might be impolite not to respond, but better not to engage at all.”
 
“That’s the reality,” I said.
 
He shook his head. “Gawd, we spend so much time with guys like that...I think I need to talk to the staff when I get back.”
 
Fair? Perhaps not to the super-detailed-tech-question-here’s-my-own-credentials-and-history-in-audio guys, not entirely.
 
But to everyone else, oh yeah.*
 
*In the spirit of full disclosure, we absolutely do answer tech questions, including very detailed ones from truly curious engineers. But when it gets to be a dick-length-measuring, futile exercise in “guess the answer I want to hear, ‘cause I bet I know more than you,” to 30 different highly detailed questions with ideological landmines for answers, um, well, no.
 

---

 
Tales of Other Scammers
 
Okay, so we had one angry scammer. So what?
 
Actually, no, we’ve had tons of scammers. Some of them successful. Some not. But let’s go through some fun ones.
 
The Amazon shipping scam, or an idiot with balls of brass. Amazon really loves its customers. They love them so much that sometimes they don’t care about what’s right. Case in point: we had a guy order a Lyr on Amazon, then claim that he hadn’t received it. Amazon refunded him in full, case closed. Or maybe not. Brass-balled idiot contacts our tech support a few days later, claiming the tubes he received were microphonic. Nick doesn’t know about the Amazon refund, so sends a request to Laura to send new tubes to him under warranty. However, Laura and Alex know about the supposed “lost product,” and contact Amazon to let them know that they have a scammer on their hands. Does Amazon care? Not at all. They do nothing. Lesson: if Amazon doesn’t care about its own money, do you think they care about yours?
 
Alex’s first scammer. Alex’s first introduction to scamming came shortly after he started working at Schiit. This guy used stolen US credit cards and had the products delivered into Russia. Pretty obvious in retrospect, but you have to be burnt a few times before realizing that the “fraud protection” at your card processor is not exactly a 100% guaranteed iron-plated guarantee. Net score: one Valhalla before we figured him out.  
 
Our biggest scammer. Busy times of the year are worst for scams. We’re moving fast, trying to keep up with orders, and we may not take the time to scrutinize them as much as we should. Which was exactly where we were during the holidays in 2013. But even if we’d looked at them in detail, this one would have been hard to catch. The billing addresses and credit card info actually matched (yes, this is possible). But the number of large-ticket orders going into and around one European city eventually tipped us off. Most of the orders we were able to catch and turn around, but we still got taken for multiple thousands of dollars in Mjolnir and Gungnirs. Fun fact: he came back this year for more. Stopped him cold. He got nothin.
 
The most sophisticated, enduring scammer. This one’s based in the USA. Very hard to catch, because it’s always different locations, different shipping methods, and sometimes even some “test buys” that go through on smaller products before moving up to larger products. According to Alex: he was very very prolific and tenacious last year. I actually teased him at one point and told him that we had a contest in our order department that anyone who spots one of his fraudulent orders gets a free lunch.  He responded by telling us to enjoy our lunches because we had already bought him lots of great dinners.
 
Scam so much that your country looks bad. Although we hate to say it, we have to be very cautious about shipping to southeast Asia. From some countries, the number of fraudulent orders is actually higher than the number of legitimate orders. As Alex says about one particularly ballsy scammer: At the time we were authenticating identification as a secondary check on orders—a practice since abandoned as one more sophisticated scammer figured out a way to provide fake IDs. This guy flat out refused to provide verification and claimed that he had worked for Interpol and wanted to know how I could be so rude to require such documentation.  When I told him that the order would not ship he insulted me for several minutes and then told me to “sit on his fat dick.”  That ended that conversation.  I then discovered that this guy has been blowing up Nick’s email with dozens of inane questions and many dozens of crazy statements.  It was probably best that he joined the not-a-customer ranks.
 
And when paranoia bites you. The problem with scammers is that, over time, you get a little paranoid. Sometimes that can bite you. Here’s an example. We’d heard of a scam technique where packages were rerouted to a FedEx office for the scammer to conveniently pick up. We’d also heard about HeadAmp’s experience with a high-dollar amp being jacked with this exact method. So when we get a very high-ticket order to ship to a UPS store from a fairly high profile person, paranoia kicks into high gear. Alex lets the person know that we suspect fraud, and that we’re reluctant to ship the order. The customer then has one of his references—Justin at HeadAmp—email us saying he was the real deal. Oops. Needless to say we shipped the order. 
 
Selling direct? Repeat after me:
 
I will be scammed.
 
But you’ll get past it. And you’ll learn…
 
 
Telltale Signs of Scamming
 
So you’re starting a business selling online. How do you recognize scammers, and how do you protect yourself against them?
 
Unfortunately, I can’t give you a complete guide, because, you know, some of our scammers may be reading this, and I don’t want to give them a complete paint-by-the-numbers outline of everything we’re doing.
 
In addition, what we’re doing has become relatively sophisticated, and is not entirely a human process anymore. So there are things I may not be able to reveal, even if I wanted to.
 
So, do I think we’re safe from future scammers? Not at all. But I do believe we can keep it below the noise level.
 

---

 
Aside: and, if anyone out there is worried about the other side of all this—namely, having their own card number stolen from our online store—don’t be. We don’t store card numbers at all. Everything is done on the processor side. And if they compromise our processor, well, tons of people are gonna be getting new cards pronto, is all we’ll say.
 

---

 
So, what are some signs of a scammer?
 

1. Much larger than average order. If your average order is, say $300, and you get an order for $6,000 from a brand-new customer, look a little harder at the order. Be especially suspicious if it is next-day shipping. They’re not paying for shipping, they don’t care if it’s $400.

 

1. Billing and shipping address don’t match. Yeah, basic stuff here. And plenty of legit orders have billing and shipping that don’t match. But ask yourself how often someone who’s living in New York will be shipping to Saudi Arabia. Sure, maybe…but maybe not.

 

1. Desperate pleas for fast shipping, especially when applied with the above. It’s not beneath a scammer to contact you for fast shipping, sometimes the same day as the order. Why? Because if you wait a day or two, the card may no longer work. They have to move fast.

 

1. Shipping to a FedEx or USPS facility or drop box. Again, this may be completely legit, but do you want to take a chance? Take a harder look, especially on larger orders, and especially if the addresses don’t match.

 

1. Attempting to reroute the shipment once it’s left your building. If someone tries to contact FedEx and reroute, this is a dangerous sign.

 
There are plenty more, sure, but that’ll get you started.
 
So how do you combat fraud?
 
Well, we’ve all seen companies that won’t ship to new accounts where the billing and shipping addresses don’t match. But that’s pretty draconian, and it is definitely inconvenient for people shipping to different addresses for a legit reason (I do it all the time, for example…no guarantee that I’ll be at home during the day, but I’ll most likely be at Schiit, for example.) Plus, believe it or not, the billing and shipping addresses can match…and still be a fraudulent charge.
 
But you can do a lot simply by not being in such a hurry to ship. Same-day shipping is great and all…but it increases the possibility of fraud. Especially don’t be in a hurry for much larger than average orders. And yes, I know, this is inconvenient for customers, especially those who legitimately need it next day—which means you’ll have to put those orders first in line for scrutiny.
 
You can also lock down your FedEx or UPS accounts, to make sure nobody but you can reroute your shipments. This may not work in all cases, but once it’s on record, the shipper is on the hook if they reroute anything you didn’t approve.
 
And then there’s a lot of little common-sense things, much of them location-based. A US-based credit card going to overseas address deserves scrutiny.  An $1800 order that is going to be delivered to a thrift store in South Central Los Angeles also should be sat on. A Valhalla/Bifrost stack shipping to an empty shack in Texas, same thing.
 
Want more? How about perhaps the biggest scam prevention method of all? Because, like it or not, most scams aren’t very sophisticated.
 
So what’s the method?
 
Simple. Every business has would-be scammers who claim non-delivery of a product. It’s amazing how many of them find the item when they find out we need to contact the police or the postal inspector to obtain a police report for our insurance company. Protip: make this part of your written shipping policy from the start.
 
To everyone selling online: good luck on catching your own scammers!

 

[smitty1110]

Spoiler: Epic post hidden here

  2015 Chapter 3:
Our Favorite Scammers
 
Yes, scammers.
 
Yes, as in people who are actually trying to get your gear for free.
 
Yes, as in criminals. People who are committing theft.
 
And yes, I know, in today’s blasé age, it’s fashionable to think, “Well, it’s a big company anyway, they’re just gonna claim insurance, nobody gets hurt, screw the man and the corporations and blah blah blah…”
 
Well, ****** you. Trying to get something from any company for free, whether it’s Time Warner or the smallest startup putting the founders’ every personal asset on the line to bring a new, innovative product to market, is stealing. Nothing more, nothing less. Let’s not sugar-coat it.
 
And let’s not dismiss it so easily. The reality is that most businesses don’t have insurance against fraudulent charges—or at least not insurance that provides complete coverage. When we get hit by scammers, it costs…and it raises the price of everything we do.
 
“Wait a sec,” you might be saying. “You use a credit card processor. They approve the transaction. Are you saying that some of those transactions they approve are scammers…and you’re on the hook for them?”
 
Yes, that’s exactly what we’re saying.
 
No processor, no matter how good, and no matter how iron-clad their policies may seem, will take 100% liability for scammers. Yes, even PayPal, with their “100% guarantee against fraud.” This is the reality. There’s a lot of fine print for them to hide behind.
 
So, let me put this clearly, for everyone who’s starting a business and planning on selling direct:
 

1. Yes, there will be fraudulent charges that are approved by your payment processor
2. And yes, you’ll be on the hook for them

 
 
The Reality: Scammers Are a Law of the Universe
 
Let me repeat that for clarity. If you have a business selling direct, you’ll be subject to scammers. You will be on the hook for some of them. And you’ll lose money on some of them. Period. End of story.
 
So what do you do about it? Hang up the whole idea of starting a business?
 
No, not at all. You do one of two things:
 

• Chalk it up as a cost of doing business, and factor it into your pricing.
• Get very good at identifying scammers, and work to circumvent them.

 
We chose the second option. And, in the process of running our business, we’ve gotten very good (but not perfect) at identifying credit card scammers, enough that we’ve limited our losses to far less than 10% of what they’d be if we relied on the card processor alone.
 
Now, we’re not going to outline all the methods we use to identify potential scammers here, because, let’s face it, some of them may be reading this. But we can definitely give you a general outline of how to spot the most obvious ones.
 
But first, let’s start with the stories.
 
 
The Maybe Scammer, Or Why Pick-Up May Not Be An Option Anymore
 
Until now, if you’d emailed Alex, Laura, or Amy and asked if you can pick up your products directly from us, you’d usually get a reply like this:
 
“Sure. Let us know when you’re coming by, between 10 and 4, Monday thru Friday, to pick up your order.”
 
In the near future, that response may read something more like this:
 
“I’m sorry, we’re just a factory, we don’t allow customer pick-up.”
 
Here’s why:
 
One Friday, we received an order for a very large amount of gear. Think, several thousand dollars worth.
 
In a business where most of our orders are for the budget lines, this raises red flag number one. The reality is, if you’re gonna scam, you’re gonna scam big (usually, unless you’re very sophisticated), so might as well go for it.
 
Second red flag: the billing and shipping address didn’t match. Both were to nearby cities in California, but they weren’t the same.
 
Third red flag: the shipping address appeared to be an apartment, rather than a detached house. Nothing against people who live in apartments, but why would someone who lives in a fairly tony area of one town ship it to an apartment in another city?
 
This was enough for us to do a little more investigation. Google Maps showed the shipping address wasn’t an apartment, but actually a PO box in a strip shopping center.
 
Woo-hoo. No way that was going to ship out.
 
We sent the buyer a polite note that his order looked a little, well, suspect, and that if he wanted the products, he could pay by a PayPal verified transaction (which would then put PayPal on the hook, rather than us.) As usual with most scam cases, we expected to hear nothing back from him.
 
Boy, were we wrong. This guy sent us a missive that was the email equivalent of the Tsar Bomba, calling our ancestry, motives, and ethics into question, belittling our judgment, and iterating what An Important Person He Was and how he wasn’t going to lower himself to pay via our instructions, no way, no how.
 
At that point, Alex responded, citing some of the things that made his transaction seem less than kosher, asked him to look at it from our point of view, and again invited him to pay via a transaction method which placed no liability on any legitimate party.
 
And that, we thought, was that. We went home for the weekend and didn’t worry about it too much.
 
At least until Monday, when the guy showed up.
 
Yes, as in drove his ass an hour up to see us and give us a piece of his mind. He spoke first with Amy. Alex, luckily, was in the shop and rapidly intervened, asking the man to leave.
 
Again, luckily, he did leave.
 
But he did sit there fuming in his car (with his girlfriend/wife) for a good ten minutes. He was so visibly disturbed that the staff locked the doors, in case he decided to come back.
 
Again, luckily, he didn’t.
 
I keep saying luckily, because it could have been very different:
 

1. Alex might not have been there, and then it would be Amy against a guy who apparently looked like an ex-high-school football player
2. He may not have left when Alex asked him, which meant that we’d have to call the police—and be on the hook for assault charges if anyone even dared to touch him
3. He may have come out of the car with a gun—disturbed people are, well, disturbed

 
But it all ended well, except for a large dose of stress we could have all avoided. If we went to locking the doors to the shop at all times, we wouldn’t have to deal with it at all. So if there’s a policy change, you know why.
 
“So who the hell was he?” you may be asking. “Some very ballsy scammer or a wealthy prick with an overinflated sense of entitlement?”
 
Honestly, we’ll probably never know. Maybe he was really trying to scam us. In which case, he gets the prize for the most titanium-balled scammer we’ve ever dealt with. Nobody else has actually shown up on our door.
 
Or maybe he was just a guy with ample amounts of both money and anger, who wanted to prove a point to the small people in the world. In that case, he also gets a prize—in this case, the #1 prospect we’d never want as a customer.
 

---

 

Aside (and warning, this may offend some people): Yes, there are people you simply don’t want as customers. People who take time out of their day to drive up and verbally assault you are one category. People who have uncontrollable anger issues are another.
 
And there are more—an unfortunate fact of selling volumes of inexpensive product. We simply cannot provide the hand-holding/hand-jobs/psychological support that some buyers of 5-figure gear expect.
 
To illustrate, I recently had dinner with the founder of another audio company, one much larger than Schiit. He also makes largely high-value products, and we’ve shared some of the same business challenges, so we commiserate and share ideas often.
 
During this dinner, he asked me, “Do you get these crazy emails that are like 8,000 words long from guys describing their history in audio and asking 35 questions about things like how the front end biasing is implemented and the ripple noise on the main supply and the listening tests you’ve done on different PC board substrates and what selection criteria you used for internal cabling and how long will the product really last outside of warranty and stuff like that?”
 
“Yes, we do,” I told him.
 
“What do you do about them?”
 
“We hit Delete,” I told him.
 
He just goggled at me a little. “Without answering them?”
 
“Right.”
 
“What happens when they come back insisting you answer their questions?”
 
“We hit Delete again,” I said.
 
“Huh,” he said, rubbing his chin thoughtfully. “I…but…hmm, well, we really can’t serve them in the manner they’re accustomed to anyway, right?”
 
“Right.”
 
“And engaging with them takes our engineering resources and won’t be to their satisfaction anyway, right?”
 
I nodded. “Correct.”
 
“So it might be impolite not to respond, but better not to engage at all.”
 
“That’s the reality,” I said.
 
He shook his head. “Gawd, we spend so much time with guys like that...I think I need to talk to the staff when I get back.”
 
Fair? Perhaps not to the super-detailed-tech-question-here’s-my-own-credentials-and-history-in-audio guys, not entirely.
 
But to everyone else, oh yeah.*
 
*In the spirit of full disclosure, we absolutely do answer tech questions, including very detailed ones from truly curious engineers. But when it gets to be a dick-length-measuring, futile exercise in “guess the answer I want to hear, ‘cause I bet I know more than you,” to 30 different highly detailed questions with ideological landmines for answers, um, well, no.
 

---

 
Tales of Other Scammers
 
Okay, so we had one angry scammer. So what?
 
Actually, no, we’ve had tons of scammers. Some of them successful. Some not. But let’s go through some fun ones.
 
The Amazon shipping scam, or an idiot with balls of brass. Amazon really loves its customers. They love them so much that sometimes they don’t care about what’s right. Case in point: we had a guy order a Lyr on Amazon, then claim that he hadn’t received it. Amazon refunded him in full, case closed. Or maybe not. Brass-balled idiot contacts our tech support a few days later, claiming the tubes he received were microphonic. Nick doesn’t know about the Amazon refund, so sends a request to Laura to send new tubes to him under warranty. However, Laura and Alex know about the supposed “lost product,” and contact Amazon to let them know that they have a scammer on their hands. Does Amazon care? Not at all. They do nothing. Lesson: if Amazon doesn’t care about its own money, do you think they care about yours?
 
Alex’s first scammer. Alex’s first introduction to scamming came shortly after he started working at Schiit. This guy used stolen US credit cards and had the products delivered into Russia. Pretty obvious in retrospect, but you have to be burnt a few times before realizing that the “fraud protection” at your card processor is not exactly a 100% guaranteed iron-plated guarantee. Net score: one Valhalla before we figured him out.  
 
Our biggest scammer. Busy times of the year are worst for scams. We’re moving fast, trying to keep up with orders, and we may not take the time to scrutinize them as much as we should. Which was exactly where we were during the holidays in 2013. But even if we’d looked at them in detail, this one would have been hard to catch. The billing addresses and credit card info actually matched (yes, this is possible). But the number of large-ticket orders going into and around one European city eventually tipped us off. Most of the orders we were able to catch and turn around, but we still got taken for multiple thousands of dollars in Mjolnir and Gungnirs. Fun fact: he came back this year for more. Stopped him cold. He got nothin.
 
The most sophisticated, enduring scammer. This one’s based in the USA. Very hard to catch, because it’s always different locations, different shipping methods, and sometimes even some “test buys” that go through on smaller products before moving up to larger products. According to Alex: he was very very prolific and tenacious last year. I actually teased him at one point and told him that we had a contest in our order department that anyone who spots one of his fraudulent orders gets a free lunch.  He responded by telling us to enjoy our lunches because we had already bought him lots of great dinners.
 
Scam so much that your country looks bad. Although we hate to say it, we have to be very cautious about shipping to southeast Asia. From some countries, the number of fraudulent orders is actually higher than the number of legitimate orders. As Alex says about one particularly ballsy scammer: At the time we were authenticating identification as a secondary check on orders—a practice since abandoned as one more sophisticated scammer figured out a way to provide fake IDs. This guy flat out refused to provide verification and claimed that he had worked for Interpol and wanted to know how I could be so rude to require such documentation.  When I told him that the order would not ship he insulted me for several minutes and then told me to “sit on his fat dick.”  That ended that conversation.  I then discovered that this guy has been blowing up Nick’s email with dozens of inane questions and many dozens of crazy statements.  It was probably best that he joined the not-a-customer ranks.
 
And when paranoia bites you. The problem with scammers is that, over time, you get a little paranoid. Sometimes that can bite you. Here’s an example. We’d heard of a scam technique where packages were rerouted to a FedEx office for the scammer to conveniently pick up. We’d also heard about HeadAmp’s experience with a high-dollar amp being jacked with this exact method. So when we get a very high-ticket order to ship to a UPS store from a fairly high profile person, paranoia kicks into high gear. Alex lets the person know that we suspect fraud, and that we’re reluctant to ship the order. The customer then has one of his references—Justin at HeadAmp—email us saying he was the real deal. Oops. Needless to say we shipped the order. 
 
Selling direct? Repeat after me:
 
I will be scammed.
 
But you’ll get past it. And you’ll learn…
 
 
Telltale Signs of Scamming
 
So you’re starting a business selling online. How do you recognize scammers, and how do you protect yourself against them?
 
Unfortunately, I can’t give you a complete guide, because, you know, some of our scammers may be reading this, and I don’t want to give them a complete paint-by-the-numbers outline of everything we’re doing.
 
In addition, what we’re doing has become relatively sophisticated, and is not entirely a human process anymore. So there are things I may not be able to reveal, even if I wanted to.
 
So, do I think we’re safe from future scammers? Not at all. But I do believe we can keep it below the noise level.
 

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Aside: and, if anyone out there is worried about the other side of all this—namely, having their own card number stolen from our online store—don’t be. We don’t store card numbers at all. Everything is done on the processor side. And if they compromise our processor, well, tons of people are gonna be getting new cards pronto, is all we’ll say.
 

---

 
So, what are some signs of a scammer?
 

1. Much larger than average order. If your average order is, say $300, and you get an order for $6,000 from a brand-new customer, look a little harder at the order. Be especially suspicious if it is next-day shipping. They’re not paying for shipping, they don’t care if it’s $400.

 

1. Billing and shipping address don’t match. Yeah, basic stuff here. And plenty of legit orders have billing and shipping that don’t match. But ask yourself how often someone who’s living in New York will be shipping to Saudi Arabia. Sure, maybe…but maybe not.

 

1. Desperate pleas for fast shipping, especially when applied with the above. It’s not beneath a scammer to contact you for fast shipping, sometimes the same day as the order. Why? Because if you wait a day or two, the card may no longer work. They have to move fast.

 

1. Shipping to a FedEx or USPS facility or drop box. Again, this may be completely legit, but do you want to take a chance? Take a harder look, especially on larger orders, and especially if the addresses don’t match.

 

1. Attempting to reroute the shipment once it’s left your building. If someone tries to contact FedEx and reroute, this is a dangerous sign.

 
There are plenty more, sure, but that’ll get you started.
 
So how do you combat fraud?
 
Well, we’ve all seen companies that won’t ship to new accounts where the billing and shipping addresses don’t match. But that’s pretty draconian, and it is definitely inconvenient for people shipping to different addresses for a legit reason (I do it all the time, for example…no guarantee that I’ll be at home during the day, but I’ll most likely be at Schiit, for example.) Plus, believe it or not, the billing and shipping addresses can match…and still be a fraudulent charge.
 
But you can do a lot simply by not being in such a hurry to ship. Same-day shipping is great and all…but it increases the possibility of fraud. Especially don’t be in a hurry for much larger than average orders. And yes, I know, this is inconvenient for customers, especially those who legitimately need it next day—which means you’ll have to put those orders first in line for scrutiny.
 
You can also lock down your FedEx or UPS accounts, to make sure nobody but you can reroute your shipments. This may not work in all cases, but once it’s on record, the shipper is on the hook if they reroute anything you didn’t approve.
 
And then there’s a lot of little common-sense things, much of them location-based. A US-based credit card going to overseas address deserves scrutiny.  An $1800 order that is going to be delivered to a thrift store in South Central Los Angeles also should be sat on. A Valhalla/Bifrost stack shipping to an empty shack in Texas, same thing.
 
Want more? How about perhaps the biggest scam prevention method of all? Because, like it or not, most scams aren’t very sophisticated.
 
So what’s the method?
 
Simple. Every business has would-be scammers who claim non-delivery of a product. It’s amazing how many of them find the item when they find out we need to contact the police or the postal inspector to obtain a police report for our insurance company. Protip: make this part of your written shipping policy from the start.
 
To everyone selling online: good luck on catching your own scammers!

 

Another really good post Jason! Also, obligatory link to current Head-fi scams page.

 

[Mr Rick]

With all I have purchased from you lately I must have looked like a suspect. LOL  That's OK with me. Better to be safe then sorry. 
 
Thanks for the great products at reasonable prices. Keep up the good work.

 

[rmullins08]

  2015 Chapter 3:
Our Favorite Scammers
 
So, what are some signs of a scammer?
 

1. Billing and shipping address don’t match. Yeah, basic stuff here. And plenty of legit orders have billing and shipping that don’t match. But ask yourself how often someone who’s living in New York will be shipping to Saudi Arabia. Sure, maybe…but maybe not.

 

1. Attempting to reroute the shipment once it’s left your building. If someone tries to contact FedEx and reroute, this is a dangerous sign.

 

 
Whoops.  I guess I am guilty of a few of the signs (but they are connected).  I try to ship things to the office, as FedEx sometimes isn't able to get into my apartment building.  So my addresses don't usually match.  When I mess that up and they do match, I usually have FedEx reroute to the local depot so I can just pick it up after work.

 

[EraserXIV]

I just ordered some Schiit but my shipping address is different than my billing address, who should I contact so my order isn't flagged?

 

[kongmw]

I don't normally order with my card and ship stuff to an address different from that in my billing statement. However, I'd think that redirecting shipments to FedEx/UPS locations would be more common and acceptable, no? For someone who works all day, lives by himself, and doesn't want expensive gear left at the door step for hours, picking up at fedex/ups locations seems to be the only logical choice. 

 

[David Aldrich]

Hell of a world we live in where a section about scammers and how to deal with the problem is one of the longest chapters in a book about a startup in the audio industry. I certainly hope Schiit doesn't have to close its walk in department I enjoy a good trip up there.

 

[MrEleventy]

Whoops.  I guess I am guilty of a few of the signs (but they are connected).  I try to ship things to the office, as FedEx sometimes isn't able to get into my apartment building.  So my addresses don't usually match.  When I mess that up and they do match, I usually have FedEx reroute to the local depot so I can just pick it up after work.

Yeah, I would typically be guilty of one or the other. I either ship to my office so I can avoid playing WoW (Wrath of Wife) or ship to my home address and get it rerouted for pickup. Again, to avoid Wrath of Wife but also because FedEx sucks in my area, they never knock or attempt. Just leave a notice and bolt off. :mad:

 

[Zojokkeli]

  I don't normally order with my card and ship stuff to an address different from that in my billing statement. However, I'd think that redirecting shipments to FedEx/UPS locations would be more common and acceptable, no? For someone who works all day, lives by himself, and doesn't want expensive gear left at the door step for hours, picking up at fedex/ups locations seems to be the only logical choice. 

 
I find it unbelievable that shipping services leave your stuff at the door if you're not there to pick it up.

 

[rmullins08]

   
I find it unbelievable that shipping services leave your stuff at the door if you're not there to pick it up.

 
If the item isn't shipped with a requirement for a signature they will.

 

[jacal01]

Damn.  My man cave may look like a empty shack now, but it's getting there... especially if you'll ship the order, already!