Walmart Marketplace’s rapid growth came with fakes, scams

When Mary May started buying from third-party sellers on Walmart‘s online marketplace, she said she assumed the products she was purchasing were the same as the ones she’d long bought in stores. 

So in late March when she said she saw a “ridiculous sale” on her favorite Neuriva brain supplements on Walmart’s marketplace, she bought eight bottles for her and her sister.

But when some of the once-daily oral supplements arrived from a seller calling itself Lifeworks-ACS, the 59-year-old mother of three noticed there were misspellings on the bottle and the packaging looked different than it usually did. Weeks later, CNBC confirmed the supplements were counterfeit – and the seller had taken the identity of another business to sign up for the marketplace.

“Walmart betrayed me. …They let me purchase something that could have harmed me, my family,” May, who was refunded by Walmart for the fake products, told CNBC in an interview from her home in Pleasant Shade, Tennessee. “As a customer, I expect them to care about my well-being when I purchase something from them. Whether it’s from a third-party seller or not, it’s on Walmart’s website.” 

May and other shoppers both loyal and new have turned to Walmart.com for better prices and a wider selection than they often get in stores, powering a new wave of sales for the largest U.S. retailer as it races to catch up with Amazon’s marketplace. Those customers helped Walmart’s U.S. digital business turn profitable this spring after years of losing money, an important milestone for a company that has said e-commerce is the key to increasing its future earnings.

But Walmart’s digital boom came as it made it easier for third-party sellers to join and sell on its marketplace, a strategy that has come with a cost, a CNBC investigation uncovered. 

Shoppers going to Walmart.com for deals on top brands are sometimes receiving counterfeit, potentially dangerous products instead, CNBC found. Third-party sellers on Walmart’s platform in certain cases aren’t who they say they are, as CNBC found at least 43 vendors who used the identity of another business to set up their account. Over time, Walmart made its seller and product vetting more lax than Amazon’s policies in a bid to woo sellers away from its rival, according to nine marketplace sellers and four current and former Walmart employees. 

“It’s very disturbing,” said Elaine Damo, the owner of Lifeworks-ACS, which provides services for children and adults with developmental disabilities.

“It’s a domino effect, and it trickles and affects everyone,” said Damo, who told CNBC she was sent returns from more than a dozen customers — including May — who had purchased counterfeits from the third-party seller that was impersonating her business. 

Reckitt, the maker of Neuriva, said it “immediately opened an investigation” after learning about the counterfeit supplements May bought and said “the health and safety of consumers is our top priority.” It said anyone who believes they may have bought a fake item should stop using it and contact the company’s customer care team.

Over the last five years, the number of sellers and items for sale on Walmart’s marketplace has exploded. The platform’s U.S. revenue grew 45% and 37%, respectively, in fiscal 2024 and fiscal 2025, Walmart has said. That expansion has fueled Walmart’s U.S. e-commerce business, which is second only to Amazon in online sales dollars, according to research from financial firm Mizuho. It’s nearing $100 billion in annual revenue and is on pace to represent 10% of all domestic online sales by 2026, Mizuho said. 

But that meteoric rise came partly from Walmart’s decision to accept some risks in the interest of growth, current and former employees said. 

Tammie Jones, who worked on Walmart’s seller vetting team from September 2023 to April 2024, said she was pressured to approve seller applications, even when she had concerns about the applicant’s credentials or documentation.

“It got to a point where they were just like, ‘You know what? Just go ahead and approve everybody,'” Jones said of her managers’ directives. “They wanted that business, so they were willing to take a chance on it.”

In a statement, Walmart said “trust and safety are non-negotiable for us.” 

“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,” Walmart said. “We enforce a zero-tolerance policy for…