How To Avoid Counterfeit Goods This Christmas

by Ryan Guina

Counterfeit goods cost consumers and legitimate manufacturers hundreds of billions of dollars every year. Yes, that is billions with a “B.” Big deal right? You buy a knock off Coach purse or Prada hand bag for $30 and no one is the wiser. What does it matter?

Well, aside from ethical considerations, there is a lot at stake with counterfeit goods. You need to consider the quality of the item, who is making the item (child labor anyone?), where the money goes (organized crime or terrorists?), and most importantly, the safety of the item. Many counterfeit electronics and batteries have been known to explode or catch fire, which can be particularly dangerous. Counterfeit pills, medicines, and toothpaste can also be extremely harmful.

Here is a guide to help you avoid unknowingly purchasing counterfeit goods:

Buy from a reputable source:

Very few counterfeit products reach the shelves of well established retailers. Buying from established retail outlets also provides something counterfeiters never will – a money back guarantee! Another thing to consider – many designer labels only sell their items through their own stores and outlets, and they will never sell via another store or vendor – especially not on a street corner!

Use caution when buying on-line:

Be sure to check the reputation of the store you are purchasing the item from. Another option is to look for the Buy Safe logo, which can provide guaranteed on-line transactions. The Better Business Bureau is not always the best logo to look for, because the BBB does not actually guarantee anything. Be particularly careful when buying on-line through a 3rd party vendor such as on an auction based website. These virtual stores are rarely guaranteed and you may find it impossible to get your money back.

This video gives more information about how to protect yourself when making on-line purchases: (please click through if you are reading via a feedreader)

Inspect the item:

Does the item look like it is good quality? Are the words and logos on the labels correctly spelled or sewn on properly? Are the zippers and stitching high quality? Is the item actually leather, or does it appear or feel fake? These can be tell-tale signs that the item is counterfeit.

Is the deal too good to be true?

C’mon, do you really think someone will sell you a $2,000 handbag for $40? Of course they wouldn’t! But what if they offer it to you for $200? Then you know one of two things – it is either A) stolen, or B) fake. Either way, it is not a good purchase for you! Be careful when judging by price alone. Price is not always an indicator of fake goods as criminals sometimes charge high dollar amounts for very good counterfeits.

Are you being pressured or persuaded into buying?

If so, walk away. People who sell the genuine items will almost always be able to sell them, and are under little pressure to make a sale. They will almost never force an item on you or pressure you to buy it. If there is a pressure tactic involved, chances are the item is stolen or a fake.

Be safe when purchasing products. Following these tips will not guarantee every item you purchase is 100% authentic, but it will greatly enhance the odds against being swindled. Above all, exercise caution and good judgment and hopefully you can avoid spending your hard earned dollars on… junk.

Published or updated June 15, 2010.
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{ 11 comments… read them below or add one }

1 FinanceAndFat

Interesting. I had no idea that was such a big business.


2 Ryan

One article I read stated the amount at $250 billion dollars annually, but it was in a Consumer Reports article that you have to subscribe to, so I couldn’t link to it. That is a lot of money!


3 debtdieter

I was in China earlier this year & went to a massive mall that was counterfeit stuff from top to bottom. Anything you could think of, they had.


4 Ryan

I’ve been to similar places in Korea and the Middle East – anything you want can be had at a fraction of the cost and a fraction of the quality. You can usually tell which items are fake by the quality of the items. And I would never recommend buying counterfeit electronics – that can be dangerous!


5 SingleGuyMoney

I have an even better your money and don’t buy it at all. LOL.


6 Mrs. Micah

Not cool. I’m all about generics–and sometimes legit knockoffs (like the kind you get in real stores). But I’ve never bought from a street vendor–bad vibe. Well, never knockoffs from a street vendor anyway.


7 Ryan

Single Guy, I agree, I don’t recommend buying any counterfeit items – but especially anything that can be physically harmful!


8 PT from Prime Time Money

Thanks, Ryan. Good advice


9 JM

People buy counterfeit handbags not because they are being tricked into thinking they are real, but because they want to trick *others* in their casual peer group into thinking they are real. I don’t think there is anybody who thinks that the $2000 bag they are getting for $20 is real.

I also doubt your assertions that the profits from these things go to organized crime and terrorists. and I flat out don’t believe the statement “Counterfeit goods cost consumers and legitimate manufacturers hundreds of billions of dollars every year.”.

Just because someone buys a knock off of a $2000 bag doesn’t mean the bag manufacturer is out $2000. In fact, the bag manufacturer has lost nothing, because the person couldn’t afford the bag in the first place.


10 Ryan

Hi JM,

You bring up some very good points, some of which I agree with. Most people do buy the fake items to trick others into thinking they own the real thing. Even though many of the people could not afford the real item, I do believe the real manufacturer is losing out big time. Their intellectual property and reputation are the basis of their business. When too many fakes are out there, it commoditizes an item that was previously a luxury item. Each counterfeit that is sold undermines the true value of the real thing.

As for organized crime – it has been proven many times that these items are made in illegal sweat shops (both within the borders of the US and outside). Many of the workers in these sweat shops do these jobs because they are forced to or have no other work. I can guarantee you they are not paid minimum wage and do not show up on any official pay charts. The factories steal intellectual property, do not pay taxes, probably don’t meet any OSHA standards, and are otherwise illegal. I don’t believe 3 women decided to get together on a weekend a make a few fake purses to sell for some spending money. I will venture to say it takes a lot of organization to pull this off and I strongly believe this is a part of organized crime. Yes, making fake purses is less of a social stigma when compared to smuggling and selling drugs and guns, but it still illegal, and is probably just a small part of a larger organization.

As for terrorism, I am not limiting this statement to the US. There are many illegal factories and sweatshops worldwide that produce goods to fund terrorist activities. Counterfeit items are not limited to purses and include money, electronics, clothing, car and aviation parts, medicines and medical supplies, and many other products (including poisonous toothpaste). There are hundreds of billions of dollars at stake and potentially people’s lives.

But the whole point of this article was to share some tips about how not to get ripped off on-line. Thanks for your comment. 🙂


11 Michelle

A good article. A world without counterfeit goods would be a better place.


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