According to CNBC, major trade groups estimate that sales for the 2023 holiday season will be in the range of about $950 billion. Much of these sales will be driven by online shopping. Per Gallup, 92% of all holiday shoppers will buy at least one gift online this year, and 47% of all shoppers will buy most—if not all—of their gifts online. This year’s Cyber Monday was the biggest shopping day in U.S. history, with revenue reaching about $12 billion in sales.
But with the increased reliance on online shopping comes a heightened risk of falling victim to scams and sales of counterfeit goods. Such scams involve the sale of fake or knock-off versions of products presented in the marketplace as the real thing. Oftentimes the fake product is poorly made and uses inferior or even illegal materials and ingredients.
In November 2023, Federal authorities in New York conducted the largest seizure of counterfeit goods in U.S. history. Two people were charged with trafficking knock-off luxury and designer merchandise, including handbags, wallets, and shoes valued at more than $1 billion. The counterfeit goods covered many well-known high-end brands, including Louis Vuitton, Gucci, and Burberry. According to an NBC News report, New York City Police Commissioner Edward Caban noted that “[t]he trafficking of counterfeit goods is anything but a victimless crime because it harms legitimate businesses, governments and consumers.”
Counterfeiting is a $2 trillion enterprise that affects every industry. The risks have only increased since the COVID-19 pandemic, during which online shopping saw enormous growth. In response, the United States Patent & Trademark Office has teamed with the National Crime Prevention Council (NCPC) and McGruff the Crime Dog® to develop the Go for RealTM campaign, aimed at educating consumers about the risks of counterfeiting and what to look out for when making online purchases.
According to the NCPC, counterfeit products cause over 70 deaths and 350,000 serious injuries each year. Counterfeit medicines sold online commonly are made with illegal or toxic materials such as fentanyl. Similarly, counterfeit products often bypass applicable safety regulations and testing, and as a result can be harmful to the consumer. Counterfeit batteries, for example, can be faulty and susceptible to exploding.
Counterfeits also inflict a clear economic toll on businesses, governments, and consumers alike, costing over 750,000 U.S. jobs annually and diverting revenue from the sources of real goods, which expend significant resources in research and development, investing in high-quality materials, and complying with labor and safety regulations. And counterfeiting activities are often carried out by international organized crime syndicates, which use the money from sales to carry out other illicit activities such as gang violence, human and drug trafficking, and child labor.
To avoid falling for counterfeit goods, consumers should follow these basic tips when shopping online:
- First and foremost, if the price looks too good to be true, it probably is.
- Investigate the real manufacturer’s website. Look to see if the product is even sold by the real manufacturer. Also look for any differences in product design or the online description.
- Be wary of dubious websites. Look at the entire site. Spelling and grammar errors and replacing letters with numbers (e.g., 0 for o; l for 1), especially in the url, are fairly reliable signs of a scam website. Check the quality of product images on the website – do they look like professional pictures, or something taken with a smartphone in a warehouse? Do product images and descriptions look like they were blatantly copied from legitimate marketing materials?
- Read all reviews –pertaining to the product being sold, yes, but more importantly about the retailer. Note if there were any issues with product quality and flaws, shipping delays, refund difficulties, and questionable product packaging.
- Investigate the seller and the product’s origins. Counterfeiting enterprises tend to be foreign sources, with the biggest culprits being from China, Turkey, Thailand, Singapore, and Malaysia.
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