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.” 

Walmart.com customer Mary May pictured at her home in Pleasant Shade, Tennessee.

CNBC

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. 

Counterfeit Neuriva Plus Brain Health and Immuno 150 supplements purchased from Walmart.com.

CNBC

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 prohibited or noncompliant products and continue to invest in new tools and technologies to help ensure only trusted, legitimate items reach our customers.” 

Counterfeits and fraud are endemic to third-party marketplaces. Amazon, among others, had trouble policing counterfeits as they grew. But Amazon has since tightened its vetting, according to interviews with sellers and e-commerce consultants. Meanwhile, it became easier for bad actors to join and sell on Walmart’s marketplace, CNBC’s investigation found. 

A misspelling on a bottle of counterfeit Neuriva Plus Brain Health supplements purchased from Walmart.com.

Adam Jeffery | CNBC

A misspelling on a bottle of counterfeit Immuno 150 supplements purchased from Walmart.com.

CNBC

Walmart has required less documentation and vetting to sign up for its marketplace and had imposed fewer restrictions on the types of products people could sell than its main e-commerce rival, according to a review of Walmart’s and Amazon’s seller applications and interviews with sellers, former employees and e-commerce consultants.

“If you look at Walmart, they look more like a flea market than a trusted marketplace. It’s like the Wild West on their platform,” said Bob Barchiesi, the president of the International Anti-Counterfeiting Coalition, a non-profit that fights counterfeits and warns fake goods can pose serious health and safety risks. “You can’t try to sell trust from aisle five and then let counterfeiters in” online.

As part of its reporting, CNBC tested the authenticity of 20 items offered by third-party sellers that had stolen the identity of a real business. All of the products were determined to be counterfeit.

The 20 counterfeit products CNBC tested for its investigation.

CNBC

Beyond the tests, CNBC reviewed hundreds of product listings and seller pages on the platform and reviewed hundreds of securities filings, earnings call transcripts and internal documents for its investigation. CNBC also interviewed more than 90 people, including third-party sellers on Walmart and Amazon, marketplace consultants, professors, members of law enforcement, and more than a dozen current and former Walmart employees. Some of those current and former staffers declined to be named because they said they could face termination or because they signed confidentiality agreements. 

CNBC also spoke with Walmart shoppers about their experiences. While some consumers know the risks of buying health and beauty products on online marketplaces, some said Walmart’s brand brings a different level of legitimacy than traditional platforms because it is a trusted brick-and-mortar retailer. Other shoppers told CNBC they weren’t even aware they were buying from third-party sellers when shopping on Walmart.com.

“I trust Walmart, I thought I was buying it from them,” said Aurora Aguilar, who bought skin-care products from a seller impersonating a legitimate business. “It’s their website.”

Product tests and stolen identities 

CNBC purchased and tested six items for its investigation, all of them highly rated, deeply discounted beauty products offered by sellers that were impersonating legitimate businesses. It also tested 14 more items that were purchased by Walmart shoppers and returned to Lifeworks-ACS, which sent them to CNBC. 

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Counterfeit beauty products CNBC purchased from Walmart.com

Christina Locopo | CNBC

In most cases, brands authenticated the products for CNBC. In other instances, lab testing conducted by scientists at St. John’s University determined whether products were fake by comparing them to an authentic product. 

These items are just a sample of the hundreds of millions of goods sold on the platform.

CNBC centered its investigation on beauty products and health supplements because they’re some of the most dangerous counterfeits on the market, often made with harmful ingredients that can make people sick, counterfeit experts said. The fact that consumers ingest them or rub them into their skin increases the safety risk, the experts said. 

Typically, marketplaces aren’t liable for the products their sellers offer. But legal experts said the argument that certain platforms could be held responsible for the sale of harmful products is gaining momentum.

In July, weeks after CNBC shared its reporting with Walmart, the company tightened vetting for some third-party sellers who list health and beauty products on its marketplace, according to emails sent to sellers that were reviewed by CNBC.

The fraudulent sellers uncovered by CNBC took credentials from a wide range of companies. Some purported to be large, publicly traded businesses, such as Thermo Fisher Scientific and Rockwell Medical. Others were smaller companies, including a California juice shop, Chicago pizza chain Dimo’s Pizza and the New York City grocery chain D’Agostino. 

Fraudulent Walmart seller accounts

CNBC

Most of the sellers were offering high-end beauty products at as much as 91% off the typical retail price listed by the brand or one of its authorized partners. 

Representatives or owners of the companies that were being impersonated by sellers on Walmart.com all told CNBC they did not have marketplace accounts. They said details like names and addresses listed on publicly available documents were used without their consent. All of the accounts were eventually taken down. 

Dimitri Syrkin-Nikolau is the owner and founder of Dimo’s Pizza. He said he felt “powerless” as he waited for Walmart to take down the fraudulent page and was concerned about damage to his business’s reputation. 

“We spent 16-plus years building the reputation here in Chicago,” said Syrkin-Nikolau, adding it took weeks for the page to be removed. “To know that somebody could just take our name and sell whatever they would like on Walmart’s website where we have no control doesn’t feel good.” 

The cost of growth

Walmart, headquartered in Bentonville, Arkansas, has become a core part of tens of millions of Americans’ lives since its founding more than six decades ago. In its most recent fiscal year, it posted a staggering $681 billion in revenue. The discounter has more than 4,600 U.S. locations, and about 90% of the country’s population lives within 10 miles of a store. 

Still, even the largest U.S. retailer has to grow somewhere. At Walmart, that expansion is happening online. 

Through Walmart’s third-party marketplace, which fuels novel business like its Amazon Prime rival Walmart+ and its advertising platform Walmart Connect, the retailer can grow profit faster than sales, Walmart executives and Wall Street analysts have said. 

The platform also allows Walmart to increase its range of merchandise, which means more customers buying from its website.

“The more sellers that you have selling product, the more customers are going to come and take advantage of that marketplace,” CFO John David Rainey said at a conference in June. 

As Walmart scaled its marketplace, it positioned the platform as more seller-friendly than Amazon, the place to go to avoid its rival’s restrictions and policy changes, sellers and former Walmart employees said. 

Between 2019 and 2024, the number of sellers on Walmart’s marketplace grew more than 900%, according to estimates from Marketplace Pulse, which collects data on leading e-commerce platforms. The increase came as the company made the marketplace a core piece of its strategy, but also overlapped with a period when Amazon ramped up security controls on its platform, banned many sellers and became known as one of the strictest marketplaces to sell on, according to interviews with sellers and e-commerce consultants. 

As a result, some sellers sought refuge on Walmart.com during that period, telling CNBC there was less vetting and looser restrictions on the types of goods they could sell. Walmart rarely, if ever, asked them to provide details on how they sourced their goods, the sellers added. 

Some sellers, industry experts and former employees said the relatively lax controls made it easier for bad actors to join the platform and sell fake, stolen or dangerous products. 

“Walmart has evolved into kind of a dumping ground for all the banned Amazon sellers,” said Chris McCabe, who used to be a member of Amazon’s seller performance team and now runs the consultancy firm ecommerceChris, helping Amazon sellers reinstate suspended accounts. “Walmart doesn’t seem to have as robust a system of enforcement.”

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Customer returns of counterfeit products purchased from Walmart.com

Christina Locopo | CNBC

Walmart didn’t comment specifically on McCabe’s remarks. An Amazon spokesperson, when asked if the company has made its platform more strict for sellers, told CNBC that “we are proud of the progress we have made in preventing counterfeits within the Amazon store.” 

“This has required significant innovation and perseverance, and it would not be possible without the partnerships we have been able to build with brands, associations, policymakers, law enforcement, and others,” the Amazon spokesperson said.

Marketplace Pulse estimates Amazon had 21 times the number of sellers that Walmart had at the end of 2024. Given that scale, some brand owners have had more issues with fakes on Amazon’s platform than on Walmart’s, according to interviews with brand protection firms, e-commerce consultants and counterfeit experts. But Amazon has shown more of a willingness to address some of its problems, said Barchiesi, the president of the IACC.

When the IACC reached out to Walmart in November 2024 inviting the company to join its Marketplace Advisory Council, the retailer stopped responding and didn’t ultimately join the initiative, Barchiesi said. The program, which officially launched in May, brings together brands, payment processors and e-commerce platforms like Amazon, eBay and Alibaba to develop best practices and work to get fakes off of online marketplaces.

Bob Barchiesi, the president of the International Anti-Counterfeiting Coalition, pictured at the group’s headquarters in Washington, D.C.

CNBC

In response, Walmart said it has a relationship with the IACC and has attended many of its conferences since 2019, where the retailer discussed marketplace safety with the organization and industry partners.

About a week after CNBC shared its reporting with Walmart and asked for a response, including to Barchiesi’s comments, the company reached out to the IACC to set up a meeting and later agreed to join the advisory council, the group said. 

Barchiesi later said the meeting, and the steps Walmart recently took to tighten vetting for some third-party sellers, are a “critical step forward.”

‘There’s a lot of money to be made in the gray market’

In the early days of Walmart’s marketplace, it had a stricter approach to combating counterfeits and a higher bar for approving sellers, former employees told CNBC. 

Seller vetting was considered more stringent than Amazon’s, and was so strict that ubiquitous computer maker Dell didn’t make the cut when it first applied, said Steve Grigory, who worked on the platform’s business development team between 2016 and 2019.  

“The trust and safety team rejected them because they weren’t good enough and I’m like, ‘What the hell are you talking about?’” said Grigory, who eventually got Dell onto the platform.

But then the Covid-19 pandemic hit the U.S. and Walmart’