It's getting to be a Cyber Monday tradition: as the biggest online-shopping day of the year approaches, the U.S. government seizes Web domains it suspects are selling counterfeit products. CNET's Edward Moyerthat this year's takedown netted more than 130 such sites.
That's nearly double the number of domains seized by the U.S. Department of Justice and the Immigration and Customs Enforcement division of the Department of Homeland Security on the eve of 2010's Cyber Monday. Still, determining just how prevalent counterfeit product sales are online is not easy.
A study by brand-protection company MarkMonitor estimates that businesses will lose $135 billion in 2011 because of fake merchandise sold online, as Katie Deatsch reported last January on Internet Retailer. I was unable to find the original report quoting that figure on the MarkMonitor site.
MarkMonitor's claim has been challenged in this Mike Masnick post on TechDirt, as were other "statistics" quoted by U.S. Chamber of Commerce officials based on the MarkMonitor survey, which the Chamber of Commerce funded.
Everyday items receive the counterfeit treatment
A more reliable estimate of the economic impact of counterfeit products may be a study by the Organization for Economic Cooperation and Development, which claims nearly 2 percent of all products traded internationally in 2007 were counterfeit or pirated. This figure represents up to $250 billion in lost sales, and it doesn't include bogus goods produced and sold domestically, or "nontangible pirated digital products," which I assume include unauthorized computer games and music and video recordings.
A recent report by anticounterfeiting service OpSec Security found that fake products are commonly offered on business-to-business sites such as Alibaba, DHgate, Trade Key, and Made-in-China. OpSec claims a large percentage of the brand-name watches, toys, and home electronics sold on such sites are phony.
While Coach bags and other luxury items have long been a popular target of the counterfeiters, even such mundane products as extension cords, toothpaste, batteries, and maple syrup are being faked, as Kelli B. Grant explains in this SmartMoney post.
Sites offer tools and resources for spotting and reporting fake products
The key to avoiding phony goods is to remember the adage, "If a deal seems too good to be true, it probably is." To verify that a product offered on a Web site is legitimate, begin by checking the manufacturer's Web site for reports of counterfeit versions being offered for sale. Also verify the model number of the product and all components that ship with it, such as USB cables, operating instructions, and warranty cards.
For practice in spotting the telltale signs of a fake product, visit the International AntiCounterfeiting Coalition's Counterfeit Gallery, which displays images of various products and asks you to decide whether they're bogus or the real deal.
The packaging of many counterfeit goods will include labels from certifying organizations such as Underwriters Laboratory (UL) and CSA International, although the copied insignia may be a slightly different color or design. Visit CSA International's Certification Marks page or the UL Marks page to compare the label's certification with the genuine article.
CSA International also provides a searchable Certified Products Listing and a database of Product Alerts & Recalls. Similarly, the UL site features information on the organization's authorized label suppliers.
The CSA site offers a Product Incident Report form you can use to notify the agency of a problem with a CSA-certified product. The equivalent for reporting glitches with UL-labeled products is the Market Surveillance Product Incident Report Form on the UL site.
An eBay seller's tips for avoiding counterfeit purveyors
The eBay auction site has a reputation for being a hotbed of phony merchandise. Not being an online-auction denizen, I defer to the advice offered by eBay seller Chrisid2303 for spotting illegitimate sellers who frequent the site (and others). Among her tips are to watch for sellers' claims of offering products from an "OEM factory," and not to trust Power Seller ratings.
eBay's own "Replicas, counterfeit items, and unauthorized copies" page includes a link for reporting listings that offer counterfeits or replicas.
In this Daily Mail post, Laura Moss takes an in-depth look at the prevalence of fake products on eBay. Moss concludes that the best way to make sure the product you're buying is legitimate is to make your purchase on the vendor's own site, or on one the manufacturer lists as an authorized reseller.
As that other adage states so wisely, "You get what you pay for." Let's hope so, anyway.