7 On Your Side warns of 'brushing' package delivery scam and what it's after | 12 Scams of Christmas

A rising 'brushing' scam involves scammers sending unordered packages to inflate online seller ratings and/or harvest consumer personal data, posing fraud, chargeback and reputational risks to e-commerce platforms and delivery carriers. Investors should monitor consumer fraud trends, potential increases in remediation costs, chargebacks and any ensuing regulatory scrutiny; consumers are advised to check accounts, report unsolicited deliveries, avoid sharing personal information or scanning QR codes, and return items when possible.

Analysis

Market structure: Brushing increases demand for fraud-detection, identity-protection and platform-moderation services while imposing return/fulfillment costs on small third‑party sellers and niche marketplaces (ETSY, small Shopify merchants). Over 6–12 months expect market share to shift 5–15% toward large marketplaces (AMZN, EBAY, BABA) that can afford verification tech and KYC, enabling modest fee increases (50–150bps) for verified‑seller services.

Risk assessment: Tail risks include major platform regulatory action or class actions (FTC/EU) that could produce fines in the low‑hundreds of millions and a temporary 100–300bp drop in online conversion for affected platforms; a correlated identity breach from brushing could depress discretionary spend for 1–3 quarters. Immediate noise will spike around holiday cycles (days–weeks); meaningful policy change or litigation will play out over 3–24 months. Hidden dependencies: Chinese low‑price supply chains and last‑mile carriers (UPS/FDX) amplify both incidence and reputational externalities.

Trade implications: Tactical winners are cybersecurity/identity names and large marketplaces; tactical losers are niche marketplace operators and small‑cap consumer sellers. Expect options IV to rise for ETSY/EBAY on any enforcement headlines; a 3–6 month call on CRWD/OKTA and put protection on ETSY are mechanically attractive. Monitor metrics: verified‑seller listings, return rates, and platform takedown counts over next 60–90 days for signal timing.

Contrarian angles: Markets underprice platforms’ ability to monetize anti‑fraud (new subscription/verification fees ≈ +$0.5–$2bn TAM for AMZN/EBAY over 2 years). Conversely, over‑aggressive enforcement could push merchants off marketplaces to direct channels, reducing long‑run GMV by 3–8% — a risk that makes small‑marketplace short trades asymmetric and execution‑sensitive.

Key Decisions for Investors

• Establish a 2–3% long position in CrowdStrike (CRWD) and 1–2% long in Okta (OKTA) with a 3–9 month horizon; add on pullbacks >10% and target 20–35% upside if enterprise security budgets reallocate +1–2% to anti‑fraud tools.
• Initiate a 1–2% short (or buy puts) on Etsy (ETSY) over 3–6 months; hedge cost‑effectively by buying a 3‑month 15% OTM put and selling a 3‑month 30% OTM put (put‑spread). Exit on a 20% adverse move or if ETSY announces comprehensive verified‑seller monetization program.
• Deploy a dollar‑neutral pair: long Amazon (AMZN) 1–2% vs short Etsy (ETSY) 1% for 6–12 months to capture share shift; increase long AMZN if Amazon announces a paid seller‑verification product or posts >10% decline in disputed seller counts quarter‑over‑quarter.
• Monitor FTC/EU enforcement notices and platform policy updates over the next 30–60 days; if a formal investigation into brushing is opened, increase short exposure to niche marketplaces by another 1–2% and rotate proceeds into cybersecurity/identity protection names.