Amazon resold a used diaper, tanking a small family business

Seattle - Mr Paul Baron and his wife Rachelle were an Amazon success story. The washable swim diaper they designed for their infant son quickly became a best-selling product as the online retailer’s algorithm worked its magic.

Satisfied parents left five-star ratings and glowing feedback, elevating the diaper in search results and steering more shoppers their way. The momentum seemed unstoppable.

Then one scathing review changed everything.

“The diaper arrived used and was covered in poop stains,” a shopper wrote in a review with a one-star rating. “Nothing could have been more disgusting!! I am assuming someone returned it after using it and the company simply did not check the item and then shipped it to us as if it was brand new. These were not small stains, either. I was extremely grossed out.” Worst of all, the review featured photos of the stains for all to see.

This was not supposed to happen. Amazon.com has committed to inspecting each return for issues before reselling it.

But selling returned products as new is a major and growing problem, according to consultants who advise merchants how to navigate the online marketplace. When the practice spawns negative feedback, merchants say, the damage increases exponentially.

A person who spent years in Amazon’s returns operation said the sheer volume of returns makes it hard for employees to thoroughly inspect products before they are restocked. Earlier in 2024, Amazon instituted a new policy that for the first time lets sellers instruct the company not to resell any returned products.

The Barons told Amazon repeatedly that they were not at fault and that the review should be taken down. Yet it remained on the site, inflicting lasting harm. The couple says they are US$600,000 (S$806,000) in debt, including a loan secured by their home that complicates the prospect of filing for bankruptcy. They make enough selling diapers to pay down debt and order more inventory, they say, but it is not a living.

“The last four years have been an emotional train wreck,” Mr Baron said. “Shoppers might think returning a poopy diaper to Amazon is a victimless way to get their money back, but we’re a small, family business, and this is how we pay our mortgage.”

Amazon removed the review a few hours after Bloomberg published this story.

“When we learnt about this incident four years ago, we quickly made improvements to our product returns process to prevent this type of used item being returned and sold as new,” Amazon spokesperson Chris Oster said in an e-mailed statement.

“During the returns inspection process, our teams are instructed to open the box every single time and validate the integrity of the inner seal. We are not aware of further incidents with this type of product since these improvements were made several years ago. More recently, we have updated our policy so that no returned products of this type can be resold under any circumstances.

“It’s extremely rare for these types of mistakes to happen, and when they do we take them very seriously to improve the experiences of customers and sellers. There is no data to suggest this was anything but an isolated incident. We have removed the negative review in question and are investigating why it was not removed previously.”

The amount of time Amazon workers spend inspecting returns varies, depending on what the item is, according to the former employee.

But on balance, a worker should not spend more than a minute eyeballing each return, the person said.

Employees often do not even bother opening packages if they appear to be sealed and just assume they are unused, the former worker said.

But because seals are often just a sticker or zipper it is not always clear if the product is as-new, the person said.

The breadth of Amazon’s catalogue exacerbates the problem. The company sells hundreds of millions of items. An Amazon worker handling returns might see a particular product only once and never develop expertise about a given category. It might seem unlikely that a stained diaper would be resold, except that Amazon also sells fake dirty diapers as gag gifts.

Amazon says it does not allow reviews that address packaging or shipping problems or product condition and damage.

The guidelines appear to prohibit the stained diaper review since it suggests the item had already been used, and the Barons were hopeful that a quick note would fix things.

But their e-mails went unanswered. Mr Baron recalls spending hours on the phone, getting passed from one department to another.

Seller support representatives acknowledged a used diaper had been mistakenly resold, but told him they could not take the review down, he said.

The couple tried the famous jeff@amazon e-mail that supposedly goes to founder Jeff Bezos himself. Nothing happened.

Amazon knew reviews could be misused when it designed the system, according to a person who worked on the project.

Executives realised it would be impossible to hire enough people to adjudicate every disputed review. The best remedy, they decided, was to encourage as many authentic reviews as possible so that false ones would get washed out, the person said. The company also does not let businesses respond to critical feedback, unlike Google and Yelp.

“There should be a very simple appeal process where a seller can get the review removed if a used item is resold as new,” said Mr Jason Boyce, a long-time Amazon merchant who now runs a consulting business for online sellers. “But that process has been broken for a long time.”

For a long time, the Barons wondered if the first review was fake, posted by a competitor bent on sabotage. Merchants have been known to buy a competitor’s product solely to leave a bad review with hopes that it elevates their business – a tactic known as “sniping”.

Competition among the more than two million sellers on the site is so fierce, merchants have even stooped to bribing Amazon workers to give their products an advantage and sandbag their competitors.

One scheme for sale was a “take-down”, in which critical reviews were left on a competitor’s product to hurt their sales, according to a 2020 federal indictment.

As it turns out, the diaper review was real. Ms Erin Elizabeth Herbert, a teacher from Redlands, California, confirmed to Bloomberg that she left it to spare other shoppers a similar experience.

The diaper arrived encrusted with faeces and had not been washed, she said. It looked as though someone used it at the beach and rinsed it in the ocean.

Ms Herbert said she got her money back from Amazon and ordered a swim diaper from a different company.

The Barons “reached out to me and said they were mortified and offered to send me a new product”, she said.

“They explained to me that Amazon handles all the returns and shipping. I always meant to go back and revise my review to reflect that, and life got busy, and I never did.” Ms Herbert forgot all about the review until Bloomberg contacted her in June.

The Barons spent a year trying and failing to get the review taken down, despite following Amazon’s instructions on how to do so. Today, the couple is trying to salvage a once-promising business. Mr Baron works on the side as an e-commerce consultant, and Mrs Baron is seeking a job in logistics.

“Amazon talks a big game about helping small businesses,” Mr Baron said. “But they really don’t.” BLOOMBERG