"A number of high-profile toy recalls combined with a slower economy doesn't bode well as the holiday shopping season begins. And shoppers will find an increasing number of online sites continuing to sell recalled toys," the MarkMonitor Brandjacking Index said.
The international brand-protection firm's latest quarterly report exposes risks of online holiday shopping for toys, after a rash of toy recalls, many of them Chinese-made, for lead paint, loose parts and toxic chemicals.
In an online search of 1,157 different auction listings for nine toy brands, MarkMonitor said it had found 349 auction listings for four specific recalled toys that contain lead paint: Dora the Explorer, Thomas the Train, Elmo, and a Barbie and Tanner play set that has loose magnets.
The vast majority of these auctions of recalled toys were from US-based sellers and many of them offered steep discounts from the retail toy price, MarkMonitor said.
"Eighty-three percent of auction listings selling recalled toys ship from the United States, more than all other countries combined," MarkMonitor said, adding "Britain is the second largest at six percent."
None of the auctions mentioned that the toys were recalled, it added.
The survey found 30 percent of online auctions continue to sell products after they have been recalled for lead paint or loose small parts.
Business-to-business (B2B) exchange sites that sell in bulk to online and brick-and-mortar retailers were selling suspicious and recalled toys for sale, "which is even more of a threat as large quantities of these dangerous toys could enter the retail stream," the report said.
The firm said that on one day in September, it found 1,150 listings for the nine toy brands offering a total of a million toys.
"One site, made-in-china.com, accounts for 79 percent of toys in this channel," the firm said.