NEW YORK — Walmart’s Marketplace is a cornerstone of the company’s plan to grow profit faster than sales and challenge Amazon. A detailed CNBC investigation found that the choices that accelerated growth also created openings for stolen identities, counterfeit health and beauty items, and broader fraud.
Here are five takeaways from CNBC’s reporting
1) Stolen identities used to open seller accounts
CNBC identified at least 43 third-party seller accounts on Walmart.com that used another business’s credentials to register. Impersonated companies ranged from large public firms to small independents. Some victims received customer returns they never sold, which helped reporters trace the fraud.
“It’s a domino effect, and it trickles and affects everyone,” said Elaine Damo, owner of Lifeworks-ACS, a provider of services for children and adults with developmental disabilities.
2) Product test buys found dangerous counterfeits
CNBC purchased and tested beauty and supplement products from impersonator accounts. Tests and brand authentication confirmed counterfeits. Shopper Mary May bought discounted Neuriva supplements from a seller using the Lifeworks-ACS identity. Packaging showed misspellings. Lab analysis confirmed the items were fake. Counterfeits in beauty and supplements carry a higher risk because customers apply them to their skin or ingest them.
3) Vetting loosened as Marketplace scaled
Former employees reported that onboarding was strict during the platform’s early years. During the pandemic and after, procedures shifted toward faster approvals. Requirements such as W-9 uploads, inventory checks, or phone verification were reduced or dropped, according to former staff. Amazon’s onboarding can include video interviews and stricter invoice evidence of sourcing. Sellers told CNBC that Walmart seldom requested these steps.
4) Policy changes after the reporting
After CNBC shared its findings, Walmart tightened vetting for beauty and personal care sellers in July. The company has introduced an enhanced vetting program for specific vendors, now requiring documentation that proves products were sourced from brand owners or manufacturers. Walmart stated it enforces a zero-tolerance policy for prohibited or noncompliant products and is investing in tools and AI to police the platform. Sellers reported that many listings were removed following the change.
5) Legal and regulatory pressure is rising
Under current law, platforms usually avoid strict liability for counterfeit third-party listings if they remove infringing items after notice. New statutes, such as the Inform Consumers Act and the proposed Shop Safe Act, would push marketplaces toward stronger verification and could create liability shields for platforms that meet more rigorous anti-counterfeiting controls. The Shop Safe Act has brand support but has stalled in previous sessions of Congress. Legal experts say arguments for holding platforms more accountable are gaining traction.
Walmart’s statement to CNBC: “We’re unwavering in our commitment to delivering everyday low prices, a broad assortment, and innovative shopping experiences. Counterfeiters are bad actors who target retail marketplaces across the world, and we are aggressive in our efforts to prevent and combat their deceptive behavior. We enforce a zero-tolerance policy for prohibited or noncompliant products and continue to invest in new tools and technologies to help ensure only trusted, legitimate items reach our customers.”
