Millions of parents turned to online shopping this past holiday season to get the toys on their kids’ wish lists. But with this greater reliance on e-commerce, including third-party marketplaces which often have lax rules for sellers, comes with an increased threat of knockoff and potentially dangerous products ending up in children’s hands. We expect the online shopping trend to continue to accelerate even beyond the pandemic, which means now is the time for lawmakers to strengthen regulations that will end the online sale of unsafe, knockoff toys and games.
Toy companies invest significant resources in product testing and other quality controls to ensure that the merchandise they sell to parents is safe for children to use. And responsible retailers have robust compliance programs and work with trusted suppliers and product manufacturers to ensure the products on their shelves and their online storefronts meet or exceed all safety regulations. Incidents of defective or unsafe products sold by legitimate retailers are very rare, but when a retailer detects any quality or safety issues with a product, those products are removed from their shelves or website. Consumers can be assured that whether they buy a product in the store or directly from a legitimate retailer’s website, those products have been vetted for safety.
Unfortunately, these checks are often not in place when it comes to third-party marketplaces — and as long as loopholes exist that allow criminals and unscrupulous sellers to peddle fake or stolen toys on these online platforms, there will be a cottage industry of counterfeit and tampered toys that pose a threat to consumers. A natural first step to stopping this nefarious activity would be to require third-party marketplaces to verify the identity of individuals and companies that sell on their platforms — the same standards brick-and-mortar retailers adhere to.
Many of the top e-commerce platforms have turned their backs on the faulty merchandise that once ran rampant on their websites. The Toy Association recently found that fake toys are easily ending up in the hands of children, with 83 percent of parents saying that their kids receive toys which are suspected to have not originated from verified sellers. Nearly a fifth of parents report that their child has already received a counterfeit or knock-off toy purchased online.
In a January 2020 report titled “Combating Trafficking in Counterfeit and Pirated Goods,” the Department of Homeland Security warned that counterfeit goods sold to consumers by online third-party marketplaces “threaten public health and safety.” These online marketplaces — which have become a haven for scams — have a direct responsibility to prevent the sale of these substandard products, especially when children’s lives are at stake.
The risks posed by faulty toys cannot be understated. Counterfeit toys sold by unverified sellers go untested and do not meet federal safety standards. For parents, this means that the toys they just purchased online might not have met small parts regulations and could result in a choking incident — the worst nightmare for any parent – or pose any other safety risk to their child.
This deadly safety hazard demands action from policymakers. Last year, a bipartisan group of lawmakers introduced the INFORM Consumers Act, which would establish identification and verification requirements for e-commerce platforms. It will require online marketplaces to collect and verify third-party sellers’ government ID, tax ID, bank account information and contact information and require high-volume sellers to disclose contact information to consumers.
The glaring lack of verification processes on third-party platforms is part of what has allowed bad actors to build a business trafficking stolen and counterfeit merchandise. A verification process and other policies aimed at promoting transparency would make it harder for these criminals to operate in the shadows, and it would stop many dangerous items from being shipped to unsuspecting families in the first place.
Ed Desmond is executive vice president of external affairs for The Toy Association.