The Refund Scam

This scam exploits the asymmetry between reversible and irreversible payment systems, and crypto sits on the wrong side of it.

The classic version

You sell something, or provide a service. The buyer pays by a reversible method: a card, a payment application, sometimes a bank transfer.

They then contact you saying they overpaid, and ask you to return the difference in crypto. The reason is always plausible: a typo, a currency conversion error, an assistant who made a mistake.

You send the crypto. The original payment is then reversed through a chargeback or a fraud claim.

You have lost the crypto and the original payment.

Why crypto is specifically requested

It is irreversible. The refund cannot be undone and the original payment can.

That asymmetry is the entire mechanism. Any combination of a reversible inbound payment and an irreversible outbound one produces the same result, and crypto is the most convenient irreversible option.

The variants

Support impersonation. Someone claiming to be from an exchange says a refund is owed and asks you to send a small amount to verify the destination address.

Marketplace overpayment. The same structure on peer-to-peer platforms.

Tax or fee refund. A message claiming a refund is due, requiring a small payment to process. This is the same scam with the direction reversed.

The rules

Never refund to a different method or a different destination than the original payment. If someone paid by card, a refund goes back to that card. Full stop.

Never send crypto to correct an overpayment. There is no legitimate situation requiring it.

Wait for the reversal window to pass. Card chargebacks can be initiated months later. Any refund requested before that window closes should be refused or delayed until it does.

Treat urgency as the signal. Every version of this includes pressure to resolve it quickly, because the pressure exists to prevent you from waiting out the reversal window.

The mirror version

You are offered a refund and asked to pay a fee to receive it. This is the recovery scam structure and it is equally reliable: no legitimate refund requires a payment from you first.

Tax is owed to a government, never to a platform, and never as a precondition for receiving your own money.

For anyone accepting crypto payments

This is the argument for using a payment processor with settlement terms rather than accepting transfers directly.

For anyone selling goods, the safest rule is that crypto is received and never sent as part of the same transaction. Refunds go back the way they came, and any request that breaks that pattern is the scam.

When you do need to send, do it from an account where the destination is on an allowlist with a delay, which venues such as platforms with a real complaints process offer and most users leave disabled.