Dive Brief:
- In an effort to rid its third-party marketplace of bad actors, Walmart on Tuesday touted a series of security and verification measures it uses to tackle the problem.
- Walmart has a multilayered enforcement system, which includes vetting sellers, restricting which merchants can sell certain categories, rolling out brand protection tools and educating sellers on maintaining high standards. Its internal trust and safety team investigates possible violations on the platform as well.
- The retailer also deploys AI and real-time monitoring to review product listings for intellectual property infringement or other policy violations, overseen by machine learning, automation and human management.
Dive Insight:
Walmart now offers more than half a billion products from third-party sellers on its marketplace. With that boom, the retailer is facing a problem that other e-commerce giants are also confronting: fraudulent sellers.
“While counterfeits are estimated to represent a tiny minority of the products sold on marketplaces, it is an issue that plagues all retail marketplaces,” Walmart said in its announcement. “These fraudulent sellers — who grow savvier, faking credentials and dodging enforcement — erode trust, not just in the companies who run these marketplaces, but in the thousands of large and small sellers who act with integrity and seek only to bring value and assortment to those who shop with us.”
Walmart has taken several steps in recent years to expand the number of sellers and merchandise categories on its third-party marketplace. In 2023, the retail giant hosted its first summit dedicated to Walmart Marketplace. The following year, the company began offering secondhand items, collectibles and premium beauty products on its marketplace, and partnered with StockX to grow its sneaker offerings.
As Walmart works to keep its growing marketplace free of bad actors, the company has also faced scrutiny from regulators. On July 8, the Federal Trade Commission sent warning letters to Amazon and Walmart regarding third-party sellers who it says are making misleading “Made in USA” claims about their products.
Other major marketplaces are using AI to fight fraud as well. In 2023, eBay acquired 3PM Shield, a provider of AI-based marketplace compliance technology, to help identify unusual or harmful sellers as well as illegal, unsafe or counterfeit items.
Amazon has also fought counterfeit goods on its site for years. The e-commerce giant said it identified and removed more than 7 million fraudulent products worldwide in 2023. The company said it also stopped more than 700,000 bad actors from creating new seller accounts.