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eCommerce Marketplaces Crack Down on Fakes to Boost Consumer Trust

retail counterfeit, eCommerce

With trust proving to be a key factor for consumers’ decisions about where they want to spend their money digitally, online merchants are cracking down on fakes.

eCommerce giant Amazon, for instance, shared Monday (March 25) in announcing its 2023 Brand Protection Report that it has been removing scam products by the millions in partnership with brands and law enforcement.

“Since its launch in 2020, Amazon’s Counterfeit Crimes Unit has pursued more than 21,000 bad actors through litigation and criminal referrals to law enforcement,” Dharmesh Mehta, the company’s vice president, worldwide selling partner services, wrote in the news release. “In 2023, we identified, seized, and appropriately disposed of more than 7 million counterfeit products worldwide, preventing them from harming customers or being resold elsewhere in the retail supply chain.”

The scale of the issue is significant. For instance, a news release last month from U.S. Customs and Border Protection noted that officers had seized three shipments of fake luxury merchandise that would have retailed for $1.2 million altogether “had the merchandise been genuine.”

Michigan State University study last year found that nearly seven in 10 people had unknowingly bought counterfeit items via eCommerce channels at least once in the previous year.

Amazon is not the only eCommerce marketplace cracking down. A report earlier this year from Bloomberg said luxury giant LVMH is collaborating with TikTok and its parent company ByteDance to curb the sale of counterfeit products on the widely-used video-sharing platform.

While TikTok Shop has gained traction in the U.S., attracting numerous merchants and creators, concerns persist regarding the presence of counterfeit goods and third-party sellers offering discounted items. The potential partnership between LVMH and TikTok could represent a significant step in bolstering the platform’s credibility.

 Counterfeits on eCommerce platforms can have a negative impact on consumer spending and engagement. When buyers unknowingly purchase counterfeit products, they may feel deceived and lose confidence in the platform’s ability to provide authentic goods, leading to decreased loyalty and repeat purchases. Additionally, counterfeit products often fail to meet quality standards, resulting in dissatisfied customers who may share their negative experiences, damaging the platform’s reputation and deterring potential buyers.

Indeed, consumers prioritize trust when shopping online, according to findings from the PYMNTS Intelligence report “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” created in collaboration with Adobe. The report, which drew from a survey of more than 3,500 U.S. consumers, revealed that three-quarters of consumers consider trust to be a pivotal factor in their choice of eCommerce merchant.

Additionally, research from PYMNTS Intelligence’s 2022 story report Satisfaction In The Age Of eCommerce: How Build Customer Loyalty Trust Helps Online Merchants Build Customer Loyalty,” created in collaboration with Riskified, showed that 59% of online retail shoppers who have had unsatisfactory experiences with a given merchant say they are “slightly” or “not at all likely” to trust that merchant.

“Trust is the currency between consumers and retailers,” Doriel Abrahams, head of risk in the U.S. at Forter, told PYMNTS in an interview last year.