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Amazon’s Pooled Inventory Increases Chances for Fraud and Altered Seller Ratings

AmazonNot everything sold on Amazon comes from Amazon. It has “marketplace” sellers too. These are independent third party companies that contract with Amazon to include their offerings in Amazon’s product listings and pay them after they are sold. Some of the marketplace sellers will ship goods directly to shoppers from their own warehouse. Others will use a service provided by Amazon called “fulfillment by Amazon.” In those cases, the outside sellers send their inventory of the item to Amazon to be warehoused by the Internet giant. Amazon then apparently pools or commingles those goods, if the seller so chooses, with its own inventory of that item and with the same item sent in by other sellers too.

So, when you buy an item from Amazon, you may never know the actual source of it. Items with the same UPC code are generally warehoused together but may well have come from different places.

In an ideal world, this is would probably be considered good inventory management. In the real world which is inhabited by some number of crooks, this can be problematic.

Some categories of goods are more likely to be counterfeit (designer handbags) or be bogus (prepaid telephone cards), for example. When these items are stored in a pooled inventory, you the consumer have no way of knowing who actually provided that item to Amazon.

Now how is this a problem for shoppers? If you wind up with worthless goods, as our reader David B. did, you may have a fight on your hands with the marketplace seller who claims to only sell legitimate goods or with Amazon itself. And the problem may also manifest itself in a different way for shoppers.

Here is the rating of one marketplace seller on Amazon (Note: this seller is being used as an example and is not to suggest that this company did anything wrong. It may in fact be a victim.):

marketplace seller

With a 100% rating and a good number of reviews, as a shopper you would feel confident in doing business with this marketplace seller. However, if you look at the actual reviews, a different picture is painted.

*MOUSE PRINT:

reviews

There are actually 15 one-star reviews for this seller alleging the receipt of prepaid cards with invalid PINs, broken or missing contents inside the box, etc. Those 15 one-star complaints out of a total of 49 reviews for this seller amount to just over 30%. Yet, Amazon says there are only 34 ratings, thus giving this seller five stars with a 100% rating. What’s going on here?

Each of the one star reviews is crossed out with a notation from Amazon:

Message from Amazon: This item was fulfilled by Amazon, and we take responsibility for this fulfillment experience.

Apparently all the items that this seller was down-rated for came from Amazon’s pooled inventory of goods since the company used “fulfilled by Amazon” to ship out the orders. And Amazon didn’t want to brandish this seller with bad ratings when those goods may actually have come from a source other than this seller. This is completely understandable, but there are some downsides. See Amazon’s strikethrough policy.

We asked Amazon why they eliminate the one-star ratings from the calculation of a seller’s total rating when the seller uses fulfillment by Amazon (“FBA”). An Amazon spokesperson replied:

“For FBA orders, Amazon takes responsibility for fulfilment-related issues. When a customer leaves negative feedback that mentions the fulfilment experience of an FBA order, the Seller can request that feedback be struckthrough. This doesn’t affect the Sellers rating because FBA is a fulfillment service provided and operated by Amazon.”

Huh? This makes it sound like Amazon denies tinkering with sellers’ star ratings.

The company did not reply to other questions about whether they refund complaining consumers in full, and whether they understand that artificially increasing a seller’s rating can potentially mislead shoppers.

Our advice: don’t rely on the summary rating for marketplace sellers. Read reviews in full on their full website (not app) to see if the particular seller deals in items that have a high risk of fraud.

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“This is Not a Bill”

Most people have no idea when their newspaper or magazine subscription is set to run out. So when you get a bill in the mail like this, it must be time to renew, right?

People around the country have been receiving bills like this:

Invoice frontClick to enlarge

Not so fast. The back of the invoice says the following.

*MOUSE PRINT:

“This is a magazine subscription offer, not a bill or invoice. You are under no obligation to either buy a magazine or renew at this time.”

And despite the appearance of this “bill,” the front bottom left hand corner says in small letters “RENEWAL OFFER – NOT A BILL.”

If it looks like a duck, it’s a duck, no matter what the fine print says. That’s the opinion of the Federal Trade Commission which recently filed a lawsuit against a web of companies for sending out these notices to subscribers of newspapers such as The New York Times, The Wall Street Journal, The Seattle Times, The Denver Post, and over 350 others.

The notices claim that that the price is one of the lowest available rates and is authorized by the publisher. In fact, the FTC alleges the defendants do not have the publishers’ authorization and they charge up to 40 percent more than the newspapers typically charge. Purchasers often overpaid, got the wrong publication, and had difficulty getting refunds.

We say: go get’m!

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Walmart Drops Price Match Guarantee in 100s of Stores

Since May, Walmart has been quietly discontinuing its price match guarantee (“Ad Match”) in hundreds of stores nationwide. This is a marked change from a policy the company promoted for years in TV commercials like this:



When one goes online to Walmart.com these days to read their terms of their policies, this is all they say about matching prices in stores:

*MOUSE PRINT:

Check with your local store for additional details on the price match policy.

Walmart spokesperson John Forrest Ales told us recently that “more than 200 but less than 1000” stores are affected nationwide. He said that in place of the price guarantee, they are instituting “long term rollbacks.” That means that thousands of items, mostly groceries and consumables, are going to have lower everyday prices, with no set expiration date. Large blue signs are being posted in stores where Ad Match is no longer available.

Walmart sign
from WhatsYourDeal

How can you get around the discontinuation of their price match policy? You can still use their Ad Match app to scan your store receipt and automatically be entitled to any lower prices the app can find. Secondly, their price match policy still applies to purchases at Walmart.com and stores not participating in the new lower prices campaign.

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