Amazon's Expired Food Problem

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A lot of shady 3rd party sellers out there, the Chinese for counterfeit products and the domestic locals selling expired or open boxed products as new. Everyone looking to make a quick buck, Amazon doesn't have the manpower to monitor every single listing.

👍︎︎ 2 👤︎︎ u/nightynightywing 📅︎︎ Mar 05 2020 🗫︎ replies
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Since Amazon bought Whole Foods for $13.7 billion in 2017, it's become an ever more popular place to buy food items. With Amazon Fresh, Prime members get groceries delivered for free in two hours from local Whole Foods stores in select cities. But outside Amazon Fresh, there's an entire section of food sold through Amazon's regular e-commerce platform. It's called Grocery and Gourmet, and it launched in 2006 with 14,000 dry grocery products available. Today, it has hundreds of thousands of items sold by millions of third-party sellers. Chances are you can find your favorite variety or obscure flavor on Amazon. And if you're a Prime member, many of them will have free one-day shipping. But there's a downside to the convenience created by Amazon's huge marketplace. Some of these food items sold through third-party sellers are arriving expired, stale or tampered with. That focus on selection, relentlessly offering more stuff, allows those expired or unsafe foods to fall through the cracks. I do buy my creamer there because I can't get it in the store where I live now. It was chunky and curdled and that's when I noticed the expiration date was I want to say two or three months before. It was shocking. They m ailed us actually like over a year old brownies. I've never experienced anything like that. Like, it tasted disgusting. It tasted like, I don't know, cardboard. A CNBC analysis found expired hot sauce, beef jerky, granola bars, Doritos, coffee creamer and baby food. We wanted to find out why expired food ends up on Amazon and what's being done to cut back on the problem. Amazon currently just has the potential for a massive liability, and they're certainly trying to take steps to clean things up and make the products that are being sold through the platform more reliable. To understand how expired food gets on the Amazon marketplace, it's crucial to understand who is selling it. Consumers have this false sense of security that because it's coming from Amazon, it must be OK. But what consumers really have to know is they're not buying from Amazon. They're buying from somebody else. Amazon's algorithms work behind the scenes to automatically suggest a seller when you shop. These listings are actually official brand names appearing there. So it looks really official that it's coming from like, let's say, Kraft. People don't know that there's a big third-party marketplace right behind the listing. While Amazon sells its own groceries through its Fresh program, the Grocery and Gourmet section is mostly made up of products sold by third parties. 3PM Solutions, a data analytics firm that specializes in e-commerce, analyzed Amazon's 100 best-selling food products for CNBC in October. Of the sellers that had over 1,000 customer reviews in the last year, 40% had more than five customer complaints about expired goods. Almost four months later, 3 PM found that all these sellers are still active and at least 50% of them have had more customer complaints of selling expired products since the initial story ran in October. I would hope that Amazon is reading these stories in the news and understanding that third-party sellers are abusing their platform and selling these types of products and doing everything possible to clean it up and start to protect consumers better. In a statement, Amazon told CNBC, "We require selling partners to abide by strict product quality guidelines and our teams have robust practice systems in place to prevent expired goods from being shipped to customers." Amazon told CNBC it will terminate bad actors for violating its policies around expired foods. But the question that we should be asking is: how often are you checking to see if these sellers are following your guidelines? Amazon told CNBC that it happens in very isolated incidents. 3 PM says it's noticed a pattern among 150 million customer reviews of more than 2 million third-party sellers. Sometimes you're buying from very unprofessional sellers that are literally just trying to unload product and make a quick buck and they don't care about your safety. Among the recent food products that customers say arrived expired or tampered with are various coffee creamers, Doritos, Fiji water bottles and Similac baby formula. In order to be eligible for its fulfilled by Amazon program, food and beverage products must have a minimum remaining shelf life greater than 90 days. Amazon says items within 50 days of the expiration date at the time of arrival at a warehouse will be marked for disposal by Amazon. Bulk items must also include extra time for consumption. Amazon cites an example. A 240-count bottle of daily supplements must have a remaining shelf life of 240 days plus an additional 90 days at the time of check-in at the fulfillment center. And Amazon takes product safety really seriously. The problem is just how big Amazon is and it just is really difficult to police a system that big effectively. Amazon says it has millions of sellers worldwide, including at least 800,000 in the U.S. Third-party sellers make up 58 percent of merchandise sold on Amazon. Amazon as a company, they have a $1 trillion market cap now. A big part of their growth has been opening up the third-party marketplace. That's the only way you can get that volume and that huge growth as a company. The thing is, that growth needs to be tempered for the reasons of safety for the consumer. And this issue is more and more important as a growing number of shoppers head online for their groceries. A recent report by Nielsen and the Food Marketing Institute found online food and beverage sales will top $143 billion by 2025. And last year, 44 % of U.S. households purchased food and beverages online, up from 39 % in 2017. I know of sellers who've sold chips, crackers that are expired, ramen packets that are expired and also flavored waters. Although many of these grocery items are sold by third parties, Amazon gets a cut of each sale and provides the selling platform, which makes culpability a hot topic. It's not just a flea market, a local flea market where a few goods are going to be sold. Folks can go on there and sell at scale expired items, items that can harm consumers. And ultimately, Amazon needs to be liable for that harm that's caused in order to induce Amazon to take the appropriate action to protect consumers from those types of sellers. So where are third-party sellers getting expired merchandise? The short answer is: it's usually changed hands a few times before it ends up on Amazon. So-called banana box stores sell pallets of goods deemed unfit for sale at normal grocery stores. Think overstock, discontinued items, returns or inventory that's been damaged, like when a pallet gets knocked over. If you go to a banana box store, probably two-thirds of the stuff in the store is expired. Closeout sales and liquidation warehouses are other common sources. For example, a U.S. company cancels an order, so the overseas manufacturer sells it at a discount to a liquidation company who then sells it on Amazon. Another example: even though Starbucks closed all its 379 Teavana stores in 2018, you can still buy Teavana sugar and fruit tea on Amazon in 2020. From sellers who purchased it from closeout sales. Now the problem with passing visual inspection for anything that's liquidation or that has some sort of broken supply chain is that no one knows how it was stored in the meantime. You don't know if it got overheated. You don't know if it got dinged and now there's a hole in the seal. You don't know if it was too cold. Plastic gets brittle and cracks when it's cold. Sellers can also stock up on seasonal items that become wildly popular when normal grocery sellers take it off the shelves. You would be amazed at what people will pay for that package of Oreos that they can't get anymore. So something that was originally $3.50, these sellers had people buying for $25 and $30 a package. So they would ignore the best-buy dates and ship the product. And then there's dumpster diving. People going to Trader Joe's and going through the dumpster and finding products that they've thrown out and reselling them on Amazon. Brand owners have a real problem here in the sense that once somebody gets an expired food product and has a problem with it, maybe they get sick or it's just a horrible taste, they've probably lost a customer for life at that point. An online Amazon policy says all sellers must place a label showing both the manufacturing date and expiration date in at least 36 point font so warehouse workers can easily spot the dates on each box or bundle as well as on each individual item inside the box or bundle. So then how does food past its best-buy date actually make it out the door of Amazon's warehouses? Unfortunately, a very large percentage of third-party sellers aren't even aware of this particular rule. And even if they are, they tend to not follow it. And Amazon also does not always enforce its own rules. Simple mistakes are bound to happen at this scale. Pickers and packers in the warehouses are working at high speeds to keep up with Amazon's 2019 promise to make one-day shipping the default for all 100 million-plus Prime members. In January 2020, Jeff Bezos told shareholders that more people joined Prime last quarter than ever before. So if it's hard for the guy doing pick and pack who's picking your order and sending it out to you, he might not notice that the item is expired because it's printed in really small type or whatever the case might be. Amazon has more than 175 warehouses across the world, covering 150 million square feet of space. Product is shipped to all these warehouses. It's trucked everywhere that one seller owns the product. So sometimes the older units have been sold by Amazon without the seller meaning to take part in that behavior. And sometimes problems with food items are caused by how Amazon stores and handles them. One of the things that we found was like oatmeal next to really smelly Tide. And I know like Tide has a very strong chemical smell, especially like, you know, the big jugs of it. And oatmeal is one of those grains that absorbs flavor. And so sometimes , there's nothing wrong with it inherently, it doesn't damage the oatmeal, but you might have Tide flavored oatmeal, for example. When Congress passed the Food Safety Modernization Act in 2011, Rachel Johnson Greer's job at Amazon was to bring its food storage and handling procedures into compliance. Some of the temperatures were reaching over 120 degrees inside the facility and we just did spot checks throughout the facility to see different things. That particular one, the top shelf, was a giant tub of gummies that had all melted together because it was 120 degrees. And so it was literally a melted tub of gummies. Another issue: returned food items can get mistakenly entered into the wrong category and end up being resold. If someone screwed that up, either the seller screwed it up or Amazon screwed it up and assigned it to the wrong category, t hen it wouldn't follow the food process. So Amazon has a really solid food process where if a return comes in it should never be put back on the shelf, right? Someone could have opened it. Someone could have eaten part of it. Someone could have gotten it gross. Amazon workers can also make mistakes when manually entering expiration dates. That's the problem with the system, is that if there's anything that gets manually keyed in wrong, if anything gets received incorrectly, then things can still sell that aren't really supposed to be selling. And occasionally bad actors fake a later expiration date. I don't think that anyone at Amazon would look at that in any detail because the policy does require stickering over manufacturer dates. And then there's the whole slew of products that are not fulfilled by Amazon. So that's when you buy from a third-party seller and they ship it to you directly instead of Amazon having any part of the shipment process. In that case, Amazon doesn't have any visibility to that product. In a statement to CNBC, Amazon said, "We also use a combination of artificial intelligence and manual processes to monitor over 20 million pieces of customer feedback we receive weekly for any concerns. If one arises, we work quickly to investigate, take the appropriate actions and use this information to improve our systems. Appropriate actions include warning, suspending or terminating a bad actor's account. If customers have a concern with a potentially expired product, we encourage them to contact our customer service directly for a full refund of their purchase." In the case of the spoiled creamer, Amazon did offer to compensate Atkinson after she spoke to CNBC in October. Wilson also received a refund for her year old brownies. It makes me think twice and so we haven't ordered anything since then. In another statement, Amazon said, "With the A-to-z Guarantee, customers are always protected whether they make a purchase from Amazon or a third-party seller." Former Amazon employee Rachel Johnson Greer explained how the process works. A seller will get a warning from Amazon saying a customer complained and said that they received an expired item from you. Explain yourself. And you get a chance to do what's called an appeal. And then whoever at Amazon receives that says, "All right, legit, you're back on. Thank you." Or, "Absolutely not. That was a terrible appeal. Go away." Amazon says in 2018 it spent more than $400 million and employed 5,000 people to fight fraud and abuse. A year ago, Amazon also launched Project Zero, allowing certain trademarked brands to directly remove third-party sellers who are tarnishing their reputations. When an item expires, a rguably it's been altered in some way. It could have spoiled. So at that stage, that's when trademark owners and brand owners can jump in and do something about those listings. But at this point, the damage could already be done. Who knows how many hundreds, if not thousands of people have received the expired item and had a negative experience with your branded product. One way customers can avoid b uying expired items is to read the reviews. But Amazon's platform can make it confusing for customers to pinpoint the right reviews and for reviewers to leave their feedback in the right place. I didn't understand, even when I wrote the review, that it was a specific seller that was different than Land O'Lakes. I had no idea. Because when you looked at the listing, it said the manufacturer was Land O'Lakes and there was a hyperlink. Really, the negative review for an expired product should be left on the seller's feedback page, not the product listing. So even other sellers' actions can actually damage your brand or someone selling a knockoff item or they're selling full outright expired items. Any reviews that come in stay forever. Some brands have decided the risk is too great. Nike and others have stopped selling on Amazon in recent months. Although this doesn't prevent third parties from selling these brands on Amazon. For seller reviews, however, Amazon will cross out some negative reviews for products fulfilled by Amazon. And that strikethrough basically means they support that seller and they're addressing the issue at hand. And more often than not, the ratings that you see on Amazon are actually very inflated in the positive sense. In a positive move, 3PM Solutions has noticed fewer instances of crossed out reviews since CNBC first highlighted this issue in October. Still, Amazon's platform can make it complicated for shoppers to figure out which sellers to avoid. Unlike product reviews, which you can sort by number of stars, seller reviews can't be parsed out into one-star reviews. So some startups like Fakespot have created apps to help consumers and manufacturers sniff out unreliable sellers. As we're getting more data about the seller, t his warning count will go up and this warning count will tell you if there's a problem with expiration or if there's liquidated products being sold or stale products being sold. Fakespot says its free app and Chrome extension have 20 million users so far and that it's analyzed six billion reviews across seven e-commerce sites since 2015. And there are complaints, the same complaints that you guys saw many months ago, still happening on the platform. Fakespot allows you to sort a seller's reviews by number of stars so you can check for problems. For example, selling stale Doritos. There's 34 % of the reviews are mentioning stale for these chips, 19% are mentioning expired. Infant formula with a broken seal. Seal was broken. The outside tamper seal was broken. Broken seals. So it's a recurring theme in this listing. Or fake Fiji water bottles that may have been filled with tap water. Do not buy, it's a fraud. Tastes like tap water. The bottles are sealed differently from the one in the bottom. I'm attaching pictures of the fake one and a real one from the local supermarket. Amazon says product listings like these with scathing reviews haven't been removed because there isn't a problem with the actual product. Rather, problems come with specific sellers who send out an expired or unfit version of the product. You're getting a product that somebody has already opened and just filled up with something else and they're able to sell it to you. That's scary. Another tool for consumers is a Chrome plug-in called ReconBob. It was created by 3 PM Solutions as a simple way to check the reliability of the seller Amazon's algorithms have automatically selected for you. It scans the seller's reviews for one-star ratings and certain keywords like "expired" or "stale" and gives a stamp of approval or not. Last resort, consumers can simply try to stay away from third-party sellers altogether. One big reason this problem persists is that expiration dates are not mandated. The Food and Drug Administration told CNBC that best-buy or sell-by dates are not required under federal law, with the exception of infant formula. The FDA calls expiration dates "manufacturer quality dates" that are "not indicative of the safety of the product." On a more recent box of creamer Atkinson purchased on Amazon in January, it included a bright green sticker explaining something called septic packaging. Amazon says this sticker is not its doing. Food products are sterilized, ensuring no microorganisms which cause either food decay or food poisoning are present. As a result, this product is offered on Amazon with no concern of expiration past date on this box. With "expired" I think people immediately jump to it's somehow going to harm them if they consume it and most of the time it won't. It's just stale or icky. In January, the Department of Homeland Security issued a report cracking down on the online sale of counterfeit and pirated goods, including things like unsafe food and medicine. Amazon and other e-commerce platforms will now be required to turn over information about third-party sellers to the government. And Amazon could face civil fines, penalties and injunctive actions. But so far, Amazon has been regulated differently than its brick and mortar competitors. If a traditional grocery store sells a defective product, the store can be sued alongside the company that made the product. And that liability means conventional retailers are careful about the products they stock. But Amazon has successfully avoided liability in court by arguing it's a platform for the sale of goods rather than a seller. The legal theory is that Amazon was just providing the space like a flea market and the individual sellers were actually liable for the goods they sold and not Amazon. That has recently changed, though. Last summer, the Third Circuit Court of Appeals ruled that Amazon could be held liable for products sold by a third party seller on its platform. The court found that Amazon was doing much more than just providing the platform. They were accepting shipping information, coordinating returns. The case was brought by a customer who lost vision in one eye when a dog leash she ordered on Amazon broke during a walk. It's still making its way through the courts. When you walk in to Target or you go to Target.com, you're buying from Target. You're not buying from somebody that's shipping out of a warehouse that is not Target related. So that's just the biggest difference that you have with Amazon is that they don't even control all their inventory. With its abundant variety of food products for sale, Amazon is certainly here to stay as a major player in the grocery business where it hopes to keep consumer trust. I mean, I feel like I should be able to trust what I buy from Amazon, you know, and I don't know. Now I doubt it. It not only damages their faith in the brand, but it also damages the consumer's trust in Amazon. So hopefully Amazon will fix this and will make it easier to find these expired products and to manage food, not only for the consumer which they should be doing it for anyway, but also for themselves and the brand.
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Channel: CNBC
Views: 1,595,188
Rating: 4.8380876 out of 5
Keywords: CNBC, business, news, finance stock, stock market, news channel, news station, breaking news, us news, world news, cable, cable news, finance news, money, money tips, financial news, Stock market news, stocks, classic footage, retro footage, amazon waste, food waste, amazon expired goods, amazon returns, sustainable retail, amazon shipping, amazon food, amazon groceries, amazon whole foods, does amazon, is amazon prime free
Id: jnuczi9aBqQ
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Length: 19min 27sec (1167 seconds)
Published: Wed Mar 04 2020
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