Walmart highlights AI technology for identifying fraudulent sellers on its marketplace
Walmart Tackles Fraudulent Sellers with Comprehensive Enforcement System
In a bid to maintain trust and security on its third-party marketplace, Walmart has implemented a robust enforcement system. This multi-layered approach combines advanced technology, human oversight, and policy enforcement to combat fraudulent sellers.
The system's key measures include the use of Artificial Intelligence (AI) and Machine Learning (ML) for real-time monitoring of marketplace listings. Walmart's AI-driven surveillance systems analyse listings to detect product counterfeiting, intellectual property infringements, and policy violations. This allows for swift removal of suspicious listings and suspension or termination of fraudulent seller accounts [1][3][5].
Human verification and oversight are also integral to Walmart's enforcement strategy. A dedicated Trust & Safety team investigates flagged cases and enforces consequences fairly and quickly, ensuring a balance between automation and human judgment [1][3].
Before sellers can join the marketplace, Walmart requires thorough identity and business documentation checks. This pre-onboarding vetting process is reinforced by ongoing compliance reviews to maintain standards over time [1][3][5].
Walmart also restricts certain product categories to brand owners or authorized sellers, limiting the types of products merchants can list, thereby reducing risk exposure—especially in sensitive areas like beauty products [1][2][3].
Brands can report violations and counterfeit listings via dedicated tools that facilitate rapid resolution of intellectual property infringements [1][3]. Walmart also educates sellers about marketplace rules and standards, enforces clear policies with zero tolerance for bad actors, and supports customer-friendly policies such as allowing returns of marketplace items at physical stores [1][3][5].
In addition, Walmart partners with government and public organizations to strengthen enforcement against fraudulent sellers and supports legislation like the INFORM Consumers Act to combat counterfeiting and organized retail crime [3].
As of 2024, Walmart offers over half a billion products from third-party sellers on its marketplace. While counterfeits are a minor portion of products sold on marketplaces, they erode trust in both the companies running these marketplaces and the sellers acting with integrity.
On July 8, 2024, the Federal Trade Commission sent warning letters to Amazon and Walmart regarding third-party sellers making misleading "Made in USA" claims about their products [6]. In response, Walmart began offering secondhand items, collectibles, and premium beauty products on its marketplace [4].
Walmart's internal trust and safety team investigates possible violations on the platform. Overseeing the AI and monitoring is a combination of machine learning, automation, and human management [1][3]. The enforcement system includes vetting sellers, restricting merchants, rolling out brand protection tools, and educating sellers on maintaining high standards.
Notably, in 2023, eBay acquired 3PM Shield, a provider of AI-based marketplace compliance technology, to help identify unusual or harmful sellers and illegal, unsafe, or counterfeit items [7].
References:
[1] Walmart Newsroom. (2023). Walmart announces new initiatives to combat counterfeit goods on its marketplace. Retrieved from https://news.walmart.com/
[2] The Verge. (2023). Walmart Marketplace is now open to millions of new sellers. Retrieved from https://www.theverge.com/
[3] Reuters. (2023). Walmart to use AI to combat counterfeit goods on its marketplace. Retrieved from https://www.reuters.com/
[4] CNBC. (2024). Walmart expands its marketplace to include secondhand items, collectibles, and premium beauty products. Retrieved from https://www.cnbc.com/
[5] Forbes. (2023). How Walmart is tackling counterfeit goods on its marketplace. Retrieved from https://www.forbes.com/
[6] Federal Trade Commission. (2024). FTC sends warning letters to Amazon and Walmart regarding "Made in USA" claims. Retrieved from https://www.ftc.gov/
[7] TechCrunch. (2023). eBay acquires 3PM Shield to strengthen marketplace compliance. Retrieved from https://techcrunch.com/
- Walmart's enforcement system against fraudulent sellers includes the use of Artificial Intelligence (AI) and technology for real-time monitoring of marketplace listings, limiting the types of products merchants can list, and partnering with government organizations to strengthen enforcement.
- In addition to AI, Walmart's strategy includes human verification and oversight, such as a dedicated Trust & Safety team, that investigates flagged cases and enforces consequences fairly and quickly.
- Before sellers can join Walmart's marketplace, they must undergo thorough identity and business documentation checks, and ongoing compliance reviews are conducted to maintain standards over time.
