Real Product, or is it Counterfeit?

Hey, cool designer wristwatch you've got there! But...is it real or counterfeit? Chances are it's real, assuming you purchased it from a reputable merchant. However, many people are finding that their name-brand product is nothing but a "knock-off."

According to a very interesting piece up at 24/7 Wall Street:

Counterfeit products may cost the global economy up to $250 billion a year, according to estimates from the Organisation for Economic Co-operation and Development (OECD). Millions of those shipments enter the United States.

Governmental agencies are doing their best to head off what has become a tsunami of fake goods, but they're only stopping a small fraction. However, that small fraction adds up to some serious money. 1.2 billion dollars worth of goods were seized in 2012, with 1.7 billion dollars worth grabbed up last year, an increase of 38% in one year. What's leading the pack as far as counterfeit items seized?

Luxury items tend to be the most counterfeited products because they are more valuable. And with better counterfeiting methods, there is a greater challenge of detection as well as potential for even higher profits. Consumers can no longer take for granted obvious signs of imitation such as poor stitching or bad zippers. “Now, the quality [of fake products] has improved so dramatically that [criminals] have been able to charge at prices closer to the price of the genuine article.”

24/7 Wall Street goes on to take a look at the most counterfeited products in the U.S. Things like "optical media." What's optical media, you ask? Good question:

The number of shipments of counterfeit optical media products, such as games, DVDs and CDs, the CBP seized fell to 1,409 last year from 2,892 in 2012. The value of the seized counterfeit optical media products fell by 30% from $38.4 million in 2012 to $26.8 million in 2013. According to IPR’s Randazzo, the drop in seizures may be partly attributable to the Internet, as “the piracy has moved to websites and moved to downloads.” Last year, in an effort to fight online piracy, Internet service providers banded together to introduce the Copyright Alert System, designed to fight copyright infringement by warning users against illegal file sharing and downloading.

Then, of course, you have labels and tags.

The number of counterfeit labels — trademarked logos and hang tags that are not attached to products — seized in 2013 was effectively unchanged from 2012. The value of these seizures, however, increased more dramatically than of all but two other products. Last year, the market value of counterfeit labels seized rose by 59% to $41.8 million. Because consumers recognize many products and brands according to their labels and tags, the fake labels help deceive buyers and make imitations look more authentic. Counterfeiters often smuggle the fake labels and the fake products into the United States separately, Randazzo told 24/7 Wall St. That way, “if the counterfeiters lose the shipment of labels and tags, it’s not that big of a loss because they still have the shipment of handbags [or other goods].”

Pharmaceuticals are big, simply because some believe they can avoid the high price of their prescription(s) by "getting it cheaper online."

CBP agents seized nearly $80 million worth of counterfeit pharmaceuticals and personal care products last year. This was 4% lower from the nearly $83 million of such shipments seized in 2012, and down 44% from $142 million in 2011. Total seizures of such products fell in 2013 to 2,215 from 2,350 the year before. The decrease in seizures can be the result of increased international efforts to crack down on the sale of fake prescription drugs. Randazzo noted that the CBP and other groups have aggressively pursued counterfeit drug operations and shut down websites selling drugs online “because of the threat to consumer health and safety.” More than $18 million worth of fake pharmaceuticals and personal care goods originated in India, accounting for 88% of illicit goods seized from the country last year. An additional $43.7 million of such goods came from China.

Alright, let's fast-forward to the most counterfeited product(s). Drum roll, please...

Handbags and wallets were again the most seized counterfeited product, by MSRP, in 2013. The roughly 2,200 shipments seized had a total MSRP of more than $700 million, accounting for 40% of the total value of all goods seized. Because these products are valued so highly, a drop in total handbag and wallet seizures between 2012 and 2013 did not correspond with a drop in the market value of the items seized. In fact, while seizures fell by 17% in that time, the value of goods seized rose 37%, or by nearly $189 million. Randazzo explained that the retail value of the genuine goods can increase the value of the seized counterfeits considerably. While a fake Coach bag is often valued in the hundreds of dollars, “if we seize a counterfeit Hermes bag, the value …of some of those bags is thousands of dollars.” Most such counterfeits originate in mainland China, which alone accounted for more than half a billion dollars in fake purses last year, according to the CBP.

The entire list can be found here. Happy shopping.