Walmart’s third-party marketplace has also allegedly led to the mixing of scammers and sellers of counterfeit goods. A CNBC investigation report published Friday (Sept. 19) revealed that Walmart website shoppers are occasionally receiving counterfeit and possibly hazardous goods.
The investigation discovered no fewer than 43 merchants who signed up on Walmart’s marketplace under the identity associated with another firm. The report also included interviews with nine sellers and four current and former Walmart employees who claim the company has loosened its seller and product vetting to better compete with Amazon.
Owner of Lifeworks-ACS, which provides developmental disabilities services, Elaine Damo, said, “It’s very disturbing.” Owner Damo told CNBC she had over a dozen customers send her returns of counterfeits from the third-party seller masquerading as her business — “it’s a domino effect, and it trickles and impacts everybody,” she said.
When Tammie Jones worked on Walmart’s seller vetting team in the fall of 2023, the new hire said she feared being fired for recommending against approving merchants’ applications, even if the credentials and documentation of the applicant were questionable at best, Jones told CNBC.
After a while, it got to the point where they’re just like, “You know what? Jones said her managers told her to: “Just approve everybody,” “I am going after that business, so I am going to take the risk on it”.
In a statement to PYMNTS, the company said, “Counterfeiters are an international threat to brands and marketplaces alike, damaging trust and integrity.” At Walmart, we are constantly enhancing the integrity of our marketplace to protect both customer and seller, said a Walmart spokesperson in an email to Reuters news agency.
Despite having more than half a billion items on our platform, we act quickly and decisively in purging the heretical counterfeit crap and hostile world actors who do not meet our high internal standards.”
In a blog post in July, the company had admitted to the problem, stating that “fraudulent sellers — who become more sophisticated, feigning credentials and avoiding enforcement — undermine confidence, not only in the firms that manage these marketplaces, but also in the thousands of big and small sellers who act honestly and strive simply to add value and variety to those who shop with us.”
PYMNTS reported earlier this year on the category of eCommerce fraud as being part of a “mosaic of threats, each tailored to the operational rhythms of specific verticals.”
Take retail, for instance: fashion businesses have to deal with challenges such as friendly fraud or false chargebacks, where a customer claims an item was returned or not delivered, even though this is not true. This, combined with high transaction volumes, lax product return policies, and constant promotions, had set a fertile stage for abuse within the industry.
That report went on to say: “As for consumer electronics sellers, they have a whole other issue called SKU inflation. Fraudsters can also elevate listings for fakes or subpar products by artificially pumping up reviews, he said.
Walmart
Walmart was established in 1962 by Sam Walton, and the first store was opened that year in Rogers, Ark., with a commitment to provide customers with low prices and great value. The company ramped up across the United States and became a consolidating force in retailing with its strategy of “Everyday Low Prices.” By the 1980s, Walmart had become one of America’s largest retailers, and in the ’90s, it moved into international expansion. Today, Walmart has thousands of stores around the world, many of them supercenters and discount stores; it is the largest retailer in the world, with unmatched power in retailing globally.
