Counterfeits Wreck The Economy – Here’s How

Apr 23

Online bargain hunting is great, but sometimes those bargains turn out to be counterfeit. One study found that as many as two in five name brand items purchased online is counterfeit. Counterfeiting can be costly to businesses that have intellectual property stolen and sold out from under them, but counterfeiting can also be dangerous to consumers and can diminish the public image of counterfeited brands.

Counterfeits Are More Pervasive Than Ever

Thanks to online marketplaces where anyone can be a seller, highly convincing counterfeits make their way into homes and businesses across the world on a daily basis. An astounding 39% of the merchandise on online marketplaces is counterfeit, while 34% of search engine results yield counterfeit products as well. Makeup and skincare products are the most frequently counterfeited items outside of electronics, but supplements and medications are also counterfeited more frequently than you might suspect. While 16% of medications sold online are counterfeit, 10% of all medical products sold in developing countries are counterfeit, and most people don’t know they’ve used counterfeit medicines or medical products until they have had a bad reaction.

Counterfeit electronics are also a lot more common than most people realize, and they can be very dangerous. 99% of fake iPhone chargers failed critical safety tests, causing electrical shocks and even sometimes electrical fires. Even secure cryptocurrency wallets are subject to counterfeiting, leaving valuable cryptocurrency in danger and most consumers wouldn’t even know it unless they were trained on what to look for. Many of the bargain electronics on online marketplaces are counterfeits; everything from replacement batteries to SD cards are commonly counterfeited.

The Problems With Counterfeiting

Not only is counterfeiting extremely costly – it’s estimated the global economy lost $323 billion from it in 2018 alone – it can leave consumers at risk and give companies an undeserved bad reputation. Most counterfeits are so convincing an unsuspecting consumer might not know it’s not a genuine article, and once something goes wrong the defrauded company is going to get the misplaced blame for the malfunction.

Counterfeiters are also often associated with organized crime, and the profits from counterfeit merchandise can fund the drug trade, human trafficking, and more. Websites that sell counterfeit merchandise can often be used to steal the identities and bank card information of the unsuspecting people who use them, leading to still more crimes.

Counterfeiting has also led to a trade war with China. One of the major complaints of companies that have manufacturing done in China is that some of those manufacturers are stealing intellectual property and using it to create an entire market of counterfeit products. This led to tariffs, which has led to a trade war standoff. Ironically, this trade war is pushing up the cost of genuine products, which in turn fuels the demand for counterfeits.
Counterfeiting is a serious problem for everyone, and it doesn’t just take money out of the hands of wealthy purse designers. It causes genuine harm to consumers, businesses, and the economy as a whole. Learn more about the global cost of counterfeiting from the infographic below.

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