BY MARK ELLIOT
This holiday season, for the first time ever, shoppers are buying more of their gifts online than in brick-and-mortar stores. Forty-seven percent of Americans are doing their shopping on the internet, compared to 37 percent who say they still prefer conventional retailers.
As consumers move online, the manufacturers and distributors of counterfeit goods follow them. But selling low-quality knock-offs isn’t just a way to make a harmless buck — it actually endangers consumers and hurts the American economy.
Consumers need to take extra precautions online in order to avoid buying dangerous fakes.
The counterfeiting business is booming. Between 2012 and 2013, the value of fake goods seized by U.S. Customs and Border Protection increased by $500 million. What’s more, these seizures represent only 0.5 percent of the imposter goods traded worldwide every year.
The counterfeit goods industry makes up roughly 7 percent of world trade. If counterfeiting were a single business, it would be the third largest in the world.
Counterfeiting isn’t a victimless crime. Every year, counterfeiting and piracy cost the world economy $360 billion. The United States’ share of that loss? A cool $215 billion.
Lost economic activity means lost jobs. According to U.S. Customs and Border Protection, 750,000 Americans are put out of work every year by counterfeiters.
It’s not just about job loss or economic damage, though. Counterfeit goods harm consumers as well.
Many consumers fall prey to a fake watch whose band breaks or a knock-off bag with faulty zippers. But these mere annoyances are the least of consumers’ worries.
Counterfeits have made their way into our prescription drug supply. Overall, 97 percent of online pharmacies operate illegally.
When the swine flu rapidly spread across the globe in 2009, fake Tamiflu quickly became the most advertised counterfeit drug online. The sellers of these dangerous imposters profited handsomely from fearful consumers — and prevented people from getting the treatment they needed.
In the years that followed, counterfeit pharmaceutical production exploded. Between 2010 and 2011, the value of counterfeit pharmaceutical seizures in the United States doubled.
Today, as many as 10 percent of all medications worldwide are fakes. These fakes cost the pharmaceutical industry $46 billion every year. At best, they’re ineffective. At worst, they contain harmful substances like lead that put patients’ lives in jeopardy.
Fortunately, consumers can protect themselves from fraudulent goods by taking a few simple steps.
First, they should trust their instincts. If a product appears to be much cheaper than it should be, it’s probably a fake.
The same common sense applies online. For instance, if a website is offering downloads of a movie that’s still in theatres, there’s a good chance it’s pirated. The sites that traffic in these sorts of corrupted movies can often install malware on a computer and steal consumers’ credit card information without their knowledge.
Consumers should also insist that online retailers transmit their payment information securely. A lock symbol in an internet browser window and a web address that begins with “https” are both signs of secure transactions.
Finally, shoppers should look at labeling. If there’s no “use-by” date, no safety seal, or no warranty information, the product could be a counterfeit. Legitimate refurbished goods, meanwhile, should come with inspection and authentication certificates.
The internet has revolutionized the way consumers shop. But it’s also given counterfeiters a direct portal into Americans’ homes. These simple tips can empower consumers to protect themselves from the dangerous fakes that counterfeiting criminals are trying to foist upon them.
Mark Elliot is Executive Vice President of the U.S. Chamber of Commerce’s Global Intellectual Property Center. Visit globalbrandcouncil.com to learn more.