Counterfeit Products Become Bigger Issue for Walmart

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In a report earlier Wednesday morning, we noted the gain that Wal-Mart Stores Inc. (NYSE: WMT) has made recently in attracting third-party sellers to its online marketplace. But with that success has come a problem that other online retailers like Amazon.com Inc. (NASDAQ: AMZN) and eBay Inc. (NASDAQ: EBAY) also face: the sale of counterfeit products.

According to a new release from The Counterfeit Report, a self-described consumer advocate and watchdog, both Walmart its third-party sellers are listing and selling counterfeit products.

The news release noted that The Counterfeit Report “has repeatedly found and submitted complaints to Walmart, authorized by the trademark holders, for counterfeit items found on its website. Yet months later, some items remain while others are removed, but then are relisted.”

The report cites as an example 16 and 32 GB microSD memory cards available on the Walmart website, both directly from the company or from a third-party vendor. The trademark holder, SD-3C, confirmed with The Counterfeit Report that there is “no such authentic microSD product in the microSD standard or any licensed manufacturer’s authentic product line.”

Counterfeit microSD cards present their owners with a false statement of the capacity of the device. Typically, the device capacity is smaller than the listed capacity and when the real capacity is reached data is simply overwritten.

The Counterfeit Report notes e-commerce sites like Walmart.com, Amazon.com and eBay.com are “perfect platforms” to allow the global distribution of $1.7 trillion worth of counterfeit goods. That total is forecast to grow to $2.8 trillion by 2022. Counterfeit goods cost U.S. manufacturers $250 billion and U.S. workers more than 750,000 jobs, according to The Counterfeit Report.