Counterfeit Goods are Everywhere – Here’s How to Avoid Them
Are you getting a good deal, or is it a fake product? Most of us are aware of designer knockoffs of products like luxury handbags. But it’s not just high-end products anymore. Counterfeit goods can be clothing, electronics, medications, cosmetics, toys, and even food. And they’re much more dangerous than people often think. It’s important to know how to spot the warning signs in order to keep yourself safe while shopping.
See The Counterfeit Economy with Kari Kammel for a complete transcript of the Easy Prey podcast episode.
Kari Kammel is the director of the Center for Anti-Counterfeiting And Product Protection (A-CAPP) at Michigan State University, where she leads research and education on counterfeiting and brand protection. Specifically, she looks at protecting consumers from purchasing fake products. She is a licensed attorney and works extensively with brands, law enforcement, and lawyers to do research, education, and outreach to learn more about this issue and raise awareness.
Kari didn’t start out interested in counterfeit products. She went to law school and did international law. One day while overseas, she got sick and went to a local pharmacy. The pharmacist offered four choices for the medication she needed—the counterfeit from China, the counterfeit from Türkiye, the real version from Türkiye, or the real version from Germany. She asked why anybody would want to buy the counterfeit. The pharmacist said because it was cheaper, and even though they didn’t know what was in it, it would almost certainly have at least some of the active ingredient. Obviously, she bought the genuine version, but it was a surprising interaction. When she heard about an opening at the A-CAPP Center, she was excited that someone was studying this.
Everyone has Bought Counterfeit Goods
Everyone in the A-CAPP Center has accidentally bought a counterfeit product at least once. Kari thinks probably everyone in the brand protection space has. It’s changed a lot. When she first got into this area over a decade ago, it was just starting to get onto the internet. Mostly it was brick and mortar establishments – flea markets, garage sales, small shops. Now counterfeit goods are everywhere online, especially on sites that let individuals sell things directly.
Everyone has a hard time telling if something for sale online is authentic. Sometimes you purchase something, it arrives, and you can tell just from the packaging that it’s off. Sometimes it’s obvious once you look at the thing or once you compare it to the previous version you bought. The quality of these fakes is getting better, though. These days, sometimes it’s hard to tell if something is counterfeit even if you have the real and fake products side by side.
[Counterfeits are] getting better and better quality … some are so difficult to determine, even if you have it side by side, whether it’s fake or not.
Kari Kammel
It’s becoming an ever more serious issue. But experts are no exception to the deception. Kari would love to be able to say she’s never fallen for it, but that isn’t true. Just a few months ago, she bought something, and as soon as it showed up, she could tell that she’d been had. The A-CAPP has a “counterfeit museum” in the office, so she added it to that collection.
Counterfeiting is a Big Problem (But We Don’t Know How Big)
Like all criminal activity, it’s challenging to get accurate numbers. Legitimate companies can report how big their sales are, but can’t accurately measure how much of that was lost to counterfeiting. The best estimates are from the Organization for Economic Cooperation and Development, and they estimate globally it’s about 7% of GDP. That’s billions of dollars. And with online sales exploding in the past ten years, that’s been growing exponentially.
In the past, a counterfeiter might have had a hard time reaching customers. Online sales has real benefits for startups, small businesses, and mom-and-pop shops, but those same benefits apply to counterfeiters too. Sellers anywhere in the world can reach potential buyers with a click of a button, and that just makes the problem bigger. In the past, the only option for selling fake products was to have a warehouse and distributors. Those things have to be paid for, which leaves a paper trail. But someone overseas selling online might not have any physical presence in the U.S. Both kinds of sales happen these days.
All the benefits that we’ve seen of online sales for real businesses and small businesses and startups and mom-and-pop shops, the counterfeiters have also taken advantage of that.
Kari Kammel
One way counterfeiters avoid getting caught by customs is selling direct to consumers. Customs does try to spot counterfeit goods and prevent them from getting into the country. But if they’re getting shipped direct to consumers, it’s much harder to check thousands of small packages than one pallet of goods. There’s no way any agency can look in every single package and determine if it’s legitimate. And laws are designed for big shipments, not individual packages. Online shopping is great in many ways, but makes it much harder to stop counterfeits getting to consumers.
Any Product Can be a Fake
When most people think of counterfeit goods, they think of fake luxury goods. Luis Vuitton and Gucci bags, for example, have been heavily counterfeited. Clothing is also one that people think of a lot. A big term used for the past several years has been “dupe” – but the term has various meanings. Sometimes it means a real product that’s just a cheaper version of something more expensive. If a high-end hair dryer is $700 but there’s a $120 hair dryer from a legitimate brand with similar features, the $120 hair dryer is a dupe of the $700 one. But “dupe” could also mean a counterfeit. And sometimes people use the term interchangeably.
It’s not just clothing and accessories that can be fake. Any product can be counterfeited, and if it exists, it probably has been. If a company is successful, Kari almost guarantees someone has counterfeited it. This is true across any industry. Luxury products, clothing, shoes, car parts, electronics, pharmaceuticals, kids products from car seats to toys, batteries, alcohol, cigarettes, nicotine pouches, guns, even the nuclear industry recently – if there’s a brand name on it, it’s probably been counterfeited. Most people don’t understand how pervasive it is, but anything you buy could be a fake.
Any branded product that we have seen in the marketplace has the potential to be, and probably has been, counterfeited.
Kari Kammel
Counterfeit Goods are More Dangerous than You Think
A lot of people have the mentality that if you bought a knockoff Gucci purse, it’s a case of buyer beware. The extent of the crime is that you didn’t get what you thought you paid for. But because there’s such a wide variety of counterfeit goods out there, there’s a wide variety of potential harms. It ranges from just getting a fake version of something to actually deadly consequences.
The type of harm depends on the product. A recent study showed a lot of apparel has stuff in it that’s harmful on skin contact. There are a lot of counterfeit drugs out there, and you have no idea how much of the active ingredient is in it, if any. You also have no idea what else is in it. People have died from not getting the actual medication they needed or from the fake having something else in it.
Lots of studies have shown that people know there’s risks of these kinds of things, but they think if their friends are doing it or they’re seeing it on social media, the risks aren’t that bad. They think it’s just a cheaper version and not actually hurting anything, and the worst-case scenario is that they got ripped off. But the real worst-case scenario is they’re putting something in or on their body that is actively toxic.
Some of this is caused by the online shopping environment. If someone in a store said a product was fake, you wouldn’t buy it. But the online space is so overwhelming, with tons of messages and ads from scammers and counterfeiters, that people often go, “Whatever, I’ll try it.” We also make more impulsive decisions when shopping online and don’t always pause to think before buying. That can also lead us into danger.
Warning Signs of Counterfeits
Ultimately, only the brand itself can really identify if something is authentic or not. The rest of us can only look at warning signs. And right now, counterfeits are so good that if you aren’t trained by the brand to identify fake products, you probably won’t be able to tell. But there are a couple things you can do to spot warning signs and weed out the obvious fakes.
If you want to be safe, Kari recommends buying directly from manufacturers. Most manufacturers have some sort of store to buy directly from them. Alternatively, you could buy from a well-known retailer who is sourcing directly from the manufacturer. That’s one of the only guaranteed ways you can get the genuine product.
If you really want to be safe [from counterfeits], buy directly from the manufacturer.
Kari Kammel
If you aren’t buying directly from the manufacturer or from a well-known retailer, these tips will help you spot suspicious sellers and products.
Always Look at the Seller
Some platforms make it difficult to tell who’s selling the product. Sometimes you have to click through a lot of pages to find out. They may choose a name that’s similar to the real brand name to try to trick you. And sometimes, like on Amazon or Walmart’s website, they hope you will just assume Amazon or Walmart is selling it and not check the seller.
If you’re on a website, look at the About section. Do they have a real address, phone number, and email? If they don’t have a physical location listed, that’s suspicious. If they do have an address, put it in Google Maps or your maps app of choice and see if that pulls up a real business. Kari has seen many beautiful, professional websites that either have no address or the address doesn’t lead to a business.
Be Suspicious of Shortages
If there is a shortage of a particular project and you manage to find it online, there’s a good chance that it’s not real. Shortages are a big opportunity for counterfeiters. We’ve seen many times that they immediately jump in. During covid, they made fake N95 masks and even toilet paper. You don’t want to be using counterfeit toilet paper! They fill the gap quickly and rely on supply and demand to make a quick buck. If you can’t find a particular product and then all of the sudden you can, be very cautious.
If there’s a shortage of a certain product out there and all of the sudden you magically find it online, it’s probably not the legitimate product.
Kari Kammel
Price Isn’t (Always) a Tell
In the past, counterfeit goods were always significantly cheaper than their genuine counterparts. You knew the headphones you were looking at were fake because they’re normally $150 and these are only $20. But as counterfeiters have gotten more sophisticated, they realized it’s easier to deceive customers if it’s closer to the price of the real thing. Especially online, they often set the price to just a cent or two cheaper than the real product so that the fakes show up first when customers sort by price. If someone has to wade through pages and pages of genuine-looking fakes before they get to the real thing, they’re much more likely to buy a fake.
Images and Reviews are Obvious
Looking at product pictures and reviews are one way to weed out the more obvious fakes. Unfortunately, with technology these days, they aren’t foolproof. AI can create convincing fake images and bots can write fake reviews. But not every counterfeiter puts in the effort to make it look real.
Check the images in the listing. Are they grainy or low-quality? Does the product not quite look how you’d expect? Do you just feel like something is wrong? It’s probably a fake. It’s also a good idea to check the reviews, especially the negative ones, to look for warning signs of something weird going on.
Check After You Buy
Just because you made the purchase doesn’t mean you can stop checking for counterfeit goods! Once the product arrives, take a look at the packaging and the product itself. Where does the shipping label say it came from? If the real version is made by a U.S.-based company but the shipping label says it came from Vietnam, that’s suspicious. Also look at the product. Does it look how you’d expect? If it’s a product you bought before, does it look like the previous version? If anything seems off, return it or just throw it away. It’s not worth the risk of using a counterfeit.
Following the Money in Counterfeit Goods
One of the reasons consumers buy counterfeits is because they are often cheaper. But they are cheaper because the criminals making them are cutting costs. They use child labor and human trafficking victims in their factories. There is no testing, quality assurance, or oversight. Making sure products are safe for consumers costs money, and counterfeiters just don’t bother with that.
Another thing to think about is where your money is going. If you buy a particular product, it’s for a reason. Whether you prefer that product for whatever reason or like something about the brand, when you buy a legitimate product, the money goes to that brand. When you buy a counterfeit, it goes to criminals. And most counterfeiters are involved in other illegal activity, too. Counterfeiting is rarely a stand-alone operation. It’s often used to finance a criminal organization’s other activities, like drugs, weapons, or human trafficking.
Oftentimes, they’re not a standalone counterfeit criminal organization. They’re usually using it to fund other activities.
Kari Kammel
Buying a counterfeit may seem like a way to get a product you want for cheaper. But your money isn’t going to the company that makes the product you like. Instead, you’re financing the criminal activity of cartels and organized crime. Combined with the dangers of using products made with no safety procedures in place, this makes counterfeit goods way more dangerous than most people think.
Counterfeiting is Hard to Fight
Most brands do everything they can to fight counterfeits. But there’s only so much they can do. Even though counterfeits look like their products, legally, they aren’t. Brands don’t want their customers to buy fakes, lose money, and get hurt. So many of them do what they can to scour marketplaces, find listings for fake products, and take them down. But it’s a lot of effort.
Unfortunately, the laws around this are old. The laws around counterfeit goods on the internet are from the 1990s, and the internet has changed a lot since then. If a brand sees a fake product for sale, they can report it to the platform and the platform will pull it down. But platforms aren’t required to proactively look for listings that might be fake. It becomes a Whac-A-Mole problem – as soon as you take down one counterfeit listing, even more pop up.
Brands are doing what they can, but right now, there’s only so much they can legally do. Kari has worked with brands who have entire teams whose whole job is doing this kind of thing. But for smaller businesses who only have a couple people in the entire business, they don’t have the staff to dedicate to chasing fakes. Which means that right now, the counterfeit problem is still running rampant. Any time a business does well or a shortage happens, counterfeiters will be right behind.
Learn more about Kari Kammel and what A-CAPP does at a-capp.msu.edu. To learn more about counterfeiting, Kari also recommends checking out documentaries on the problem that are available on Netflix and Hulu.