Global Innovation Policy Center

Thanksgiving weekend isn’t just about stuffing the turkey – more and more Americans are using Thanksgiving weekend as an excuse to stuff their stockings and get an early start to their holiday shopping. Many Americans will find the perfect gift, but some will end up with more than they bargained for: dangerous counterfeit goods. Counterfeit goods pose a serious threat to consumers and businesses alike.

Counterfeit goods bypass important safety and quality tests, and they can harm consumers.

Counterfeit goods are created and distributed without proper regulation, meaning they’re the result of shoddy work. The shoddy work that hallmarks the counterfeit trade translates into downright dangerous products.

Counterfeiters know exactly what’s on your holiday shopping list: whatever you’re shopping for, you can guarantee there are counterfeit versions on the market.

Counterfeit clothing often fails fire resistance standards, and fastenings, dyes, and other materials used in the production process reeks of chemicals and metals that can affect your health. Counterfeit cosmetics tout high levels of mercury, arsenic, and even traces of urine and feces, all of which can cause severe allergic reactions and possible long-term harm to your skin, eyes, and hair.

Counterfeit toys are built with flimsy parts that pose undisclosed choking hazards and contain high levels of lead and other dangerous chemicals. Counterfeit electronics, like phone chargers and battery-powered gadgets, will melt, catch fire, or even explode.

Counterfeit medicines may contain uselessly low or dangerously high amounts of active ingredient. Some counterfeit medicines contain no active ingredient; others contain a different active ingredient altogether.

With your health and safety in the balance, you can’t overestimate the damaging weight counterfeits can carry.

Counterfeit impacts every sector of the economy and stifles economic growth.

Globally, counterfeit has nearly doubled in value since 2008 – amounting to $461 billion annually. That’s more than double the 2014 profits of the world’s top ten companies combined. Additionally, studies estimate that counterfeiting costs the U.S. 750,000 jobs a year.

It’s clear that counterfeit products steal market share from legitimate businesses. But counterfeit also undermines innovation, one of the largest drivers of economic development. Counterfeit robs businesses the ability to benefit from the breakthroughs they make in creating new products and services, discouraging future innovative activity.

Moreover, counterfeiters avoid paying taxes, so governments lose valuable tax revenue that could be used to develop important initiatives, like public health and education.

Counterfeit funds organized crime and rewards the exploitation of workers.

It’s clear that counterfeit escapes regulatory certifications, taxes and duties, and other relevant legal checkpoints. But counterfeit also finances crimes of a much larger scale.

Counterfeiting funds international illicit trade and criminal groups. Terrorist networks and organized crime rings use the profitable counterfeit industry to sponsor their organizations’ activity, from drug smuggling and weapons trafficking to military operations and member recruitment.

Counterfeit also perpetuates the systematic exploitation of labor. Counterfeit employees are low paid and vulnerable, exposed to egregious violations of labor laws and basic human rights. Many counterfeit producers also infringe upon child labor laws.

According to the International Labor Organization, the majority of the 246 million child laborers work in the “informal” economy, the economy hidden from government and other authoritative supervision, which includes counterfeit.

Counterfeiting is certainly not a victimless crime, affecting people and communities in the U.S. and around the world.

We can work together to combat global counterfeiting.

Businesses and law enforcement agencies are working tirelessly to fight fakes. But they need consumers’ help.

Make sure you know how to avoid counterfeit – and help teach your friends and family.

Here are GIPC’s top ten tips to shop safe:

1. Trust your instincts. If it’s too good to be true, it probably is.
2. Insist on secure transactions. When doing business online, make sure your payments are submitted via websites beginning with “https” (the “s” stands for secure) and look for a lock symbol at the bottom of your browser. This helps you know that you are working with a trustworthy retailer.
3. Watch for missing sales tax charges. Businesses trading in counterfeit goods often do not report their sales to financial authorities – a difference you may notice in the price you ultimately pay, particularly in states that collect sales taxes.
4. Seek quality assurance in the secondary market. Reputable and reliable resellers have comprehensive inspection and authentication procedures and technicians to inspect the equipment they sell.
5. Buy medicines only from licensed pharmacy websites. Reports suggest that 96% of online pharmacies do not meet safety or legal standards. Trustworthy websites should be licensed by the relevant state board of pharmacy, should provide a licensed pharmacist to answer questions about your purchase, and should always require a prescription for prescription medicines.
6. Be vigilant when buying abroad. When shopping on international websites, look for trusted vendors that use identifiable privacy and security safeguards and have legitimate addresses.
7. Guard your personal information. Illicit websites often install malware that can steal your credit card information and other information stored on your computer. Don’t install add-ons or apps if you don’t know their purpose and don’t click on suspicious pop-up ads.
8. Scrutinize labels, packaging, and contents. Look for missing or expired “use by” dates, broken or missing safety seals, missing warranty information, or otherwise unusual packaging.
9. Report fake products. Report unsafe products to the Consumer Product Safety Commission.  Consumers can play an important role in keeping the market free of fakes.
10. Spread the word. Share these tips! Teach your family, friends, and coworkers about counterfeits.

 

ABOUT THE AUTHOR
Kasie Brill is the senior director of brand protection for the U.S. Chamber of Commerce Global Innovation Policy Center.