Shopping At Walmart? -- You May Get A Counterfeit

Walmart opens its website to fraudulent and counterfeit product sellers.

May 3, 2018, Los Angeles, CA – Along with Walmart's push to capture a portion of the exploding e-commerce marketplace comes a seedy and dishonest practice -- selling counterfeits. Walmart is a both a direct retailer of counterfeits, and has opened its website to global third-party "Marketplace" sellers who can list just about anything they want, including counterfeits on Walmart's website.

The counterfeit items appear right alongside authentic products conveying Walmart's endorsement, and the illusion they are from Walmart. Deceived consumers spend good money for bad products while Walmart takes a transaction fee for each item sold. Consumers can no longer expect honest services, authentic, and safe products when they shop Walmart.

• An undercover investigation by the U.S. Government Accountability Office ("GAO") of counterfeit consumer goods on Walmart (WMT), Amazon (AMZN), eBay (EBAY), Sears (SHLD) and Newegg validates that claim -- about 50% of the items purchased by the GAO were counterfeit.
• The Counterfeit Report, a consumer advocate and industry watchdog, found over 1,900 counterfeit items on Walmart's website, purchased some, and then submitted infringement complaints authorized by the right holders to remove the counterfeit items. Some listings were removed, others remained for months, or were relisted by the same sellers.

For example, consumers purchasing the items below from Walmart received a counterfeit;

(Photo: The Counterfeit Report ®)

• Vans, the popular footwear and apparel company, does not make or license the use of the Vans® trademark on iPhone 6, 7 or 8 phone cases. The fake item shown was offered by third-party sellers on Walmart's website.
• Authentic Fullips® beauty products are made from safe food grade plastic and FDA approved colorant. Counterfeits have been found with lead and arsenic. A three-pack version was never manufactured by Fullips.
• In simple terms, there is no authentic 64GB microSDHC® computer memory product in the SDHC standard, or any licensed manufacturer's authentic product line. The fake microSDHC and SDHC cards shown here were purchased from both Walmart as a direct retailer and third-party sellers on Walmart. The microSD® and SDHC® trademarks are owned by SD-3C, LLC, who licenses its registered trademarks to authentic, conforming SD products.
• CREE® manufactures lighting products and LED's, but CREE does not make flashlights. The items shown are fake, they do not exist in the CREE product line but are offered on Walmart.com.
• Untested and non-FDA approved OTC drugs present a hazard to unsuspecting consumers. It is unknown what ingredients are in this Deep Numb product bearing the unauthorized Dr. Numb® registered trademark. Authentic Dr. Numb® 5% Lidocaine Cream is a popular topical anesthetic used in reducing pain, hair removal and tattooing. Counterfeit Dr. Numb tested in the packaging shown here, which is also offered on Walmart.com, did not contain any Lidocaine as indicated, but Tetracaine, an anesthetic known to cause fatal defects in animal testing, and can result in "full blown anaphylactic shock¹."
• Composite Resources, Combat Application Tourniquet® (C-A-T®), has been supplied to the U.S. Military, police, first responders and the public worldwide for the past decade. Counterfeit versions of the C-A-T tourniquet have catastrophically failed during actual life-saving applications. The fakes can be found on Walmart.
• This counterfeit Duracell® battery with its easily peeled off label was purchased from a Walmart third-party seller. Would you trust a fake for a smoke detector, baby monitor or first responder's equipment?
• All the SD® and microSD® memory cards shown here from Walmart's website are fake. None of the capacities in the formats shown exist in the SD standard or in any legitimate manufacturers authentic product line. Consumers risk losing their data and images using counterfeit memory products.

Walmart expects its online sales to grow 40% for the current fiscal year. How much will counterfeit products contribute to that growth?

Companies that enable and facilitate criminal activity and profit from dishonest sales which impact consumer safety, jobs and public trust create a public perception of deception and impunity. However, their reputation damage is only a small part of the problem: the value of counterfeit and pirated goods is forecast to grow to $2.8 trillion and cost 5.4 million net job losses² by 2022, while manufacturer's brand integrity is tarnished or destroyed. Counterfeiting is now the world's largest criminal enterprise.

The result; One-third of online shoppers received an unexpected surprise last year - they unwillingly received a counterfeit product.

Congress can act to protect consumers, and consumers can shop elsewhere - will they?

View more Walmart fakes here.

Footnotes:

⁽¹⁾ Dr. Tom Brock, Surgeon and Anesthesiologist at Queen Elizabeth Hospital.

⁽²⁾ THE ECONOMIC COSTS OF COUNTERFEITING AND PIRACY
The report was prepared for The International Chamber of Commerce (ICC BASCAP) and The International Trademark Association (INTA)
January 2017
Frontier Economics, Ltd.