CNBC Special Report: How Walmart Marketplace’s Rapid Growth Came With Fakes And Scams 9/19/25

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Gabrielle Funrush (0:48)

Just down the street from Chicago's iconic Wrigley Field is Demos Pizza, known for serving up slices to hungry baseball fans. Its menu has classics like pepperoni pies to creative combos like chicken and waffles. What's not on the menu? Luxury beauty products. But here's Demos Pizza selling Lancome face cream on Walmart's online marketplace for just $25.99.

A 91% discount from its typical retail price of $280. Just to be clear, you don't have a side hustle selling beauty products on walmart.com, right?

Dimitri Circa Nicolaou (1:27)

I do not know. We just make pizza here.

Gabrielle Funrush (1:30)

And so if someone comes in and asks for double pepperoni, that's not like a code word for a knockoff beauty product?

Dimitri Circa Nicolaou (1:35)

No.

Gabrielle Funrush (1:36)

Dimitri Circa Nicolaou, the restaurant's owner, was startled when we told him there was a third party seller on walmart.com using his business credentials to sell Lancome beauty cream. And to make matters worse, lab testing confirmed the cream was counterfeit. Consumer buying high-end beauty products from Demos Pizza, I mean, does that make sense to you?

Dimitri Circa Nicolaou (1:57)

No, it seems ludicrous. We spent 16 plus years building the reputation here in Chicago and 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.

Gabrielle Funrush (2:11)

And Demos isn't alone. During our investigation into Walmart's marketplace, we identified at least 43 instances, including Demos, where a business' name and address were stolen to create a third-party seller account, from a New York grocery chain to publicly traded companies. Take this Walmart seller account fraudulently posing as Thermo Fisher Scientific, one of the world's leading biotechnology companies. Instead of selling the lab products you'd expect, like beakers and pipettes, its Walmart seller page featured numerous beauty products, often at steep discounts. So this is the order of confirmation that I received when I purchased the Solda Gennaro hair and body mist from the seller purporting to be Thermo Fisher Scientific, Inc. I paid $14 for the product. It typically retails for about $25, so this is a 44% discount. Like many third-party listings we analyzed, it looked highly rated, at least at first glance. So you have the ability to filter by verified purchases only on these reviews, and when you click that, it goes from 2,300 reviews to 388 So it's a huge drop-off, and verified purchases only are what Walmart knows for sure is a review from somebody who actually bought the item. So out of 388 reviews, let's look at one-star ratings, 209 of them are one-star ratings. Most of those reviews are calling out the item as fake or counterfeit. Thermo Fisher told us it does not have a Walmart seller account. Its business name and address were stolen, and lab testing conducted by St. John's University confirmed the Sol de Janeiro product was counterfeit. Walmart declined an on-camera interview, but in a statement wrote, trust and safety are non-negotiable, and that it has a zero tolerance policy for prohibited or non-compliant products.

It told us complaints are flagged, reviewed, and action taken as appropriate. Walmart also said it's investing in new tools and technologies to keep counterfeits off the platform. Walmart said it could share more details about its robust vetting processes, but only on the condition that we would not report it publicly because it could compromise the integrity of our trust and safety systems. We declined to accept information we could not report. Our investigation focused on fraudulent third-party sellers offering health and beauty products, ones that experts say posed the greatest risk to consumers because we put them in and on our bodies. As part of our reporting, we tested items sold by third-party sellers that had stolen the identity of a real business to see if the products they were offering were fake. We purchased six items to test. They were all highly rated, deeply discounted beauty products from third-party sellers confirmed to have stolen the identity of a legitimate business. 14 additional items we tested were purchased by Walmart customers and returned to a legitimate business that says a third-party seller stole its identity. These items were later provided to us. And testing by the brands or lab testing by St. John's University confirmed all of these items were fake. Of course, these items are just a sample of the hundreds of millions of goods sold on the platform. To understand how imposter selling counterfeits make it onto the platform, we spoke with more than a dozen current and former Walmart employees about the company's vetting process. Tammy Jones was one of those employees. She said she worked at Walmart Marketplace from November 2021 and left in April 2024 for personal reasons, including health issues and family matters that made it difficult to maintain the hours needed to keep her benefits. While she was at the company, she joined Walmart's Trust and Safety team in September 2023, where she said she was tasked with reviewing seller applications that failed the initial automated process. When she first took the role, she said the requirements to join the marketplace were strict.