Amazon Still Plagued by Counterfeits as Prime Day Approaches

By Douglas A. McIntyre Updated Jan 11, 9:01PM EST · Published Jul 14, 8:10AM EDT

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Amazon Still Plagued by Counterfeits as Prime Day Approaches — © Poike / iStock

Amazon.com Inc. (NASDAQ: AMZN) is about to kick off its Prime Day, the largest single e-commerce event in the United States. Amazon continues to press its dominance in online retail. New research shows it takes close to half of the money spent on e-commerce in America, a position Prime Day leverages to the tune of well over $1 billion. However, the volume of sales on Prime Day will serve to highlight the blight of counterfeit products sold on Amazon and the extent to which it has not come close to a resolution of the problem.

Prime Day will stretch for 36 hours, straddling July 16 and 17, starting at 3 p.m. Eastern. The event will cover most of Amazon’s largest markets around the world, which means the vast majority of Amazon’s over 100 million Prime members can participate. The deals will include groceries from its Whole Foods division, adding a new brick-and-mortar aspect to Prime Day. Amazon will expand its already impressive reach into consumer electronics, which recently has extended to its home assistant product powered by its Alexa software. Amazon also will use the event to promote Prime itself. For $119 a year, Prime offers a set of features that range from access to its massive library of streaming media, a portion of which Amazon produces itself, to free shipping, exclusive discounts, music streaming and photo storage.

The problem of counterfeits at Amazon and other companies, such as eBay, has gotten worse over time. While watchdogs and the media have set off alarms, the most notable criticisms recently were from the Federal Communications Commission and the U.S. Government Accountability Office. A letter from FCC Commissioner Mike O’Rielly directly to Amazon CEO Jeff Bezos pointed out that fake set-top boxes continue to be sold at Amazon. Organizations like The Counterfeit Report log thousands and thousands of fake items sold on Amazon, including surgical items, lithium-ion batteries and police badges.

[nativounit]

Amazon does have policies that cover the sale of fake items. Its Amazon Anti-Counterfeiting Policy states:

Products offered for sale on Amazon must be authentic. The sale of counterfeit products is strictly prohibited. Failure to abide by this policy may result in loss of selling privileges, funds being withheld, and destruction of inventory in our possession.

Critics say Amazon does not put enough muscle behind the policy, particularly given its financial resources. Amazon, they argue, counts too much on customer reports.

Prime Day will bring a much larger stream of customers to Amazon than it would receive in a typical day. That means counterfeiters will have an especially large opportunity to prey on shoppers.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.