- A CNBC analysis in October found that Amazon was shipping out expired food items from third-party sellers on its Grocery & Gourmet section.
- Four months later, the sellers are still active and more than half of them have had new complaints about expired products, even as regulation begins to catch up.
- Amazon told CNBC that this happens in very isolated incidents.
A CNBC analysis in October found that Amazon was shipping expired food items from third-party sellers to people shopping on the site's Grocery & Gourmet section. Four months later, the sellers are still active and more than half of them have had new complaints about expired products, even as regulation begins to catch up.
Since Amazon bought Whole Foods for $13.7 billion in 2017, it's become an ever-bigger player in the $800 billion grocery market. It offers free 2-hour grocery delivery with Amazon Fresh and cashierless Amazon Go convenience stores in four cities. A full-size cashierless supermarket store recently opened in Seattle and another is set to open in Los Angeles this year.
But there's also an entire section of food sold through Amazon's regular e-commerce platform. It's called Grocery & Gourmet, and it launched in 2006, selling 14,000 "dry" grocery products. Today, it has hundreds of thousands of items, sold by millions of third-party sellers.
The downside to the convenience created by Amazon's huge marketplace is that some of these food items are falling through the cracks of Amazon's strict regulations. The CNBC analysis found expired hot sauce, beef jerky, granola bars, Doritos, coffee creamer and baby food.
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, 3PM 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 in October. Amazon told CNBC that this happens in very isolated incidents.
3PM says it noticed a pattern among 150 million customer reviews of more than 2 million third-party sellers.
"When a consumer gets an expired product, it not only damages their faith in the brand and the work that the brands put into building a great product, but it also damages the consumer's trust in Amazon," said former Amazon product safety program manager Rachel Johnson Greer, now an Amazon Marketplace Strategist for Cascadia Seller Solutions. "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 before anyway, but also for themselves and the brand."
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. She told CNBC she saw tubs of gummies melted together on the top shelves of warehouses that had reached 120 degrees, and instances where Tide laundry detergent was stored next to oatmeal that had absorbed the chemical smell.
In a statement, Amazon told CNBC that, "We work hard to provide customers with a great shopping experience, and that includes receiving products in the condition they expect and with sufficient shelf life. We require selling partners to abide by strict product quality guidelines and our teams have robust proactive systems in place to prevent expired goods from being shipped to customers."
"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," the Amazon spokesperson said. "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."
This problem persists, in part, because regulation is sparse. The Food and Drug Administration told CNBC that "'best-by" 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."
Amazon is also 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.
"Historically, courts have found that Amazon is not liable for items sold by the third party sellers on the platform. 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," said trademark lawyer Josh Gerben.
A bill introduced in the House on Monday may change this. A group of four representatives, two Republicans and two Democrats, introduced the SHOP SAFE Act, outlining a plan to create liability for online marketplaces like Amazon if they don't have specific safeguards in place.
In January, the Department of Homeland Security issued a report that requires Amazon and other e-commerce platforms to turn over information about third-party sellers and warns the online platforms could face "civil fines, penalties, and injunctive actions" for selling counterfeit or pirated goods.
"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," Greer said.
Watch the video to see how expired food ends up on Amazon, and what's being done to cut back on the problem.