AI hallucination

AI hallucination

AI

When an AI model states something false or made up as if it were true.

What is AI hallucination?

Hallucinations are reduced by grounding answers in approved sources, requiring evidence before claiming an action succeeded, and letting the AI say "I don't know." Why it happens: language models generate likely-sounding text. When they lack the right information, they can fill the gap with something that sounds plausible but is wrong, like an invented return policy or a tracking number that does not exist. In customer service, that turns into broken promises. Checking claims against real records before they reach the customer is the most reliable defense.

Example

For example, a customer asks if they can return an opened item. An ungrounded AI might say "Yes, within 60 days" because that sounds normal, even if your policy is 30 days for unopened items only. A grounded agent looks up the policy and quotes it.

Why AI hallucination Matters

One wrong answer can cost a refund, a customer or your reputation, so controlling hallucinations is essential before letting AI talk to customers.

Explore More Terms

Browse our complete glossary of e-commerce and subscription terms.

Space, at your fingertips

What would you do with 22% more revenue?