Why unsafe goods are still on sale online

Dangerous products that have caused fires, accidents and deaths, and been withdrawn from sale across the EU as a result, are still available to buy online. That is putting more homes and lives at risk.

Recent examples of known high-risk products continuing to be available on online marketplaces include unapproved “killer” children’s car seats that should never have been on sale and Whirlpool dryers that have been recalled on a huge scale because they pose a fire safety risk.

In both cases risk has been identified and publicised, and in the case of Whirlpool a costly and complex recall process has been implemented. So how come you could still accidentally buy one, putting your family at risk of harm?

It comes down to the way products are distributed, resold and retailed online, and the fact ecommerce marketplaces consist of a dizzying array of unofficial “third party” sellers.

The Whirlpool spokesperson commenting on the dryer recall told the BBC:

We wholly support initiatives to prevent products that are subject to safety notices being sold on the secondhand market. This should never happen. We have been, and continue to, work with various online platforms to help achieve this."

This is an admirable response, and echoes the warnings of consumer groups in the other article about the risks of buying car seats secondhand - but it doesn’t factor in the huge role of third party sellers online, particularly on mainstream ecommerce marketplaces like eBay, Amazon and Facebook.

Third party sellers rarely sell secondhand goods in the sense that consumers use the term

These third parties are not typically secondhand sellers - at least not secondhand in the sense that consumers tend to think of. When shoppers hear “secondhand” we tend to think of a product that has been previously used, and is perhaps being resold by its previous owner. (These tend to be relatively low risk transactions). We definitely don’t think of stock that has been sold on several times through the retail supply chain, way beyond the original brand or manufacturer’s official sales channels, and is now being sold by goodness knows who…

This confusion around third party sellers online is putting consumers at serious risk.

Third parties are those sellers where the brand or manufacturer does not have a formal, official relationship. So Argos, for example, may sell on eBay but it has a formal relationship with the manufacturers of the products it sells - it is part of their official “channel” rather than an unofficial third party. Whereas if I bought a mixed box of department store stock in a clearance auction, and set up my own store on Amazon and eBay to sell it on, I would not be part of the official manufacturer sales channel - I would be a third party seller, part of what is often called the “grey market” or secondary market.

Illicit trade refers to the selling of illegal, unsafe and unauthorised goods and services

You may already be familiar with the concept of black market sellers - illicit traders is the technical term. They are operating illegally in their geography by selling or distributing smuggled or stolen goods, fake and counterfeit products, unbranded or “famous -brand” lookalikes, and unapproved products that have not been safety tested, and may contain dangerous, toxic or illegal components.

Illicit trade is thought to account for at least 7% of the world’s circulating merchandise (these numbers date from 2003, so I’d personally estimate much, much higher). Most illicit trade connects back to organised criminal gangs - meaning this is never a victimless crime, even when there aren’t product safety issues.

Anyone offering illicitly traded goods for sale, from the unapproved “killer” car seat, to factory clearance stock from a famous brand that is really just a cheap counterfeit, or electric appliances that have been withdrawn from sale in the EU for safety purposes - even a seller that regards themselves and their stock as genuine - is an illicit trader and liable to prosecution.

All sellers have to source stock at a price they can afford

The grey market is more complex, but it is an essential component of global retail. All sellers everywhere have to buy their stock from somewhere, and if they are not a big-name player, they may lack the clout, volume or credit lines to buy directly from a big brand or major manufacturer, even if they wanted to.

How much money you make as a retailer depends on finding stock to sell, paying as little as possible for your stock and selling for it as much as you can, ensuring you minimise costs and wastage. So access to stock at a price and on financial terms you can afford, is an essential first step for any seller to overcome.

Grey market sellers are typically legitimate clearance channels for unsold goods which have been manufactured by or with the consent of the brand owner, but are now being sold outside of the brand owner's approved distribution channels. This can be perfectly legal - for example bulk clearance sellers, who buy large quantities of unsold, returned or seconds grade stock at auction or from warehouses/distributors and then sell it on, either directly or to other sellers.

This is usually the reason why you may see the same “interesting” dress or “unusually coloured” pair of trainers across multiple Ebay, Amazon and Facebook stores, as well as standalone website. Official unsold stock has made it into the grey market and will soon be passing the outer limits of the solar system. This makes it a very good place to hide fakes, but that is another blog post!

Third parties can struggle to respond to safety issues

These third party sellers rarely have the processes or capability to recognise or respond to a product safety issue, especially one like a product withdrawal. Ultimately, for a legitimate but unofficial seller who has likely picked up mixed stock at rock bottom prices (probably with little product information, warranties or documentation) a safety issue means that stock they have paid for can no longer be sold on. It may even have to be destroyed - probably at their cost and without them being compensated.

So perhaps it no surprise that some third party sellers choose to turn a blind-eye to safety issues and product recalls, despite the risks to consumers. But there are legal consequences for doing so, if a seller is caught. For example a distributor who is found to have placed an unsafe product on the market, or fails to comply with a recall notice from Trading Standards can face a fine of up to £20,000, up to 12 months imprisonment - or both.

But with so many third party sellers online - both legitimate sellers and illicit traders - and many of them very small businesses, there can be a shocking lack of awareness about the legal responsibilities around selling, and also the attitude amongst some that “I’m too small for the laws of trade, tax and consumer protection to apply to me”.

Your contract is with the third party seller, not the platform

Consumers may assume that buying from a well known ecommerce or social marketplace means that there are higher standards around product safety, the policing of sellers and that they can therefore buy in confidence. Unfortunately, in my view, those standards are either completely absent or woefully low.

It is very important to understand that even if you buy on a credible platform, your contractual relationship is with the third party seller, not with the platform - you are entrusting your consumer rights and personal safety to someone who could potentially be selling from their bedroom, without ever physically seeing or handling the goods that they buy and sell.

New technology reduces the risk of accidentally buying unsafe products

The reason Vistalworks focuses our data technology on identifying illicitly traded goods online - including recalled, dangerous and unapproved stock - and warning shoppers if they face potential harm is because we believe it is these purchases that present the highest risk to consumers, their families and their homes. We’re building the technology to protect consumers wherever and whenever they shop online, which will be available to install on your devices later this year. In the meantime, you can use our free checker (in Beta) to check out eBay seller listings before you buy.