Mix-ups at Amazon.com Inc.’s warehouses have led to customers receiving counterfeit products — even when they’re buying from a legitimate third-party seller. But experts say eBay Inc. and others have also struggled to stem the rise of counterfeit goods, leaving it up to the consumer to distinguish what’s real and what’s fake.
Online retail giant Amazon “comingles” products from third-party sellers, according to a report in The Wall Street Journal, which has resulted in some consumers receiving counterfeit goods even though they were bought from a legitimate manufacturer. (A spokesman for Amazon declined to comment.)
In January, online auction site eBay reached a confidential legal settlement with French cosmetics company L’Oreal relating to the sale of fake L’Oreal goods via eBay. “The parties believe that cooperation, rather than litigation, is the way forward to fight against counterfeiting,” the two companies said in a joint statement.
But that means consumers are often left to discern if a product is genuine, experts say. Counterfeit goods account for almost 10% of worldwide trade, totaling $500 billion annually, according to the World Customs Organization. “It’s hard enough to detect counterfeit goods in the physical world,” says Jeff Hardy, director of Business Action to Stop Counterfeiting and Piracy at the International Chamber of Commerce. “There are hundreds of thousands of rogue sites out there.” Sites peddling phony merchandise can disappear overnight and reappear under a different name the next day, he adds. He advises double-checking the product with the manufacturer’s site, especially if there’s a steep discount.
While fake designer perfume or designer watches might emit a bad smell or simply stop working, other purchases could be life-threatening. Food, electrical and safety products should only be bought from online retailers you know and trust, says Joseph LaRocca, vice-president of loss prevention at Retail Partners, an L.A.-based consulting company for retailers and law enforcement agencies. They include cellphone chargers, power tools and lithium batteries, Christmas tree lights, power-extension cords, life vests for sailing, car safety seats for children, and children’s toys and stuffed animals that could become a choking hazard. “All these items can be very dangerous if they’re not constructed properly,” he says.
For over-the-counter medication, the Food and Drug Administration has a list of state boards of pharmacy on the National Association of Boards of Pharmacy website and also encourages consumers to report unlawful sales of medicine online. Resist the temptation to buy cheaper over-the-counter drugs from websites that may offer online questionnaires for a diagnosis, the FDA advises. Drugs can be made from dangerous ingredients; they could also be too strong or weak, not approved by the FDA, or stored or shipped incorrectly. And certain drugs — such as anti-malaria pills and Viagra — should never be purchased online.
Don’t shop on websites based overseas if the product is from a U.S.-based company, says Michelle Boykins, spokeswoman for the National Crime Prevention Council. If a fake product does get sold through a major site here, most offer money-back guarantees for the item. For example, eBay will reimburse the customer within 30 days of receiving the item, if the item was ordered via eBay and doesn’t arrive or isn’t as it was described in the listing, an eBay spokesman says.
Defective items bought on Amazon from a third-party seller can be refunded through its “A-to-Z Guarantee Claim,” the site’s policy states. (But you are limited to a lifetime maximum of 50 claims for purchases from Amazon’s sellers.)
When buying memorabilia or antiques, consumers should always insist on documentation of its provenance and use a payment system like PayPal to track the payment, says Michele Forzley,senior scholar at the O’Neill Institute for National and Global Health Law at Georgetown University Law Center. (There is a brisk business in memoirs reportedly signed by dead movie stars that sell for hundreds of dollars, for example.) When the product arrives, packaging will often have clues to its authenticity, she says. “If you don’t see a phone number, address or name of the manufacturer on the packaging, it’s likely to be fake,” she says. Another tell-tale sign: there may be spelling errors on the packaging.
Despite the risks, more than half of people say they’ve intentionally bought some kind of counterfeit product such as designer clothing and accessories, and film and music, according to a 2013 U.K. survey of over 1,000 respondents by PriceWaterhouseCoopers. “Consumers die from not getting proper medication and the people making these products,” Forzley says. “But it’s not just about asking if this product is hurting you. People who make these products are likely working in substandard labor conditions and are using child labor.” What’s more, proceeds from counterfeit trade are used to fuel other illegal activities.
Consumers are not naïve to those facts: 90% of people told the same PwC survey that counterfeiting was “morally wrong.”
Quentin Fottrell is a personal finance reporter for MarketWatch based in New York. You can follow him on Twitter @quantanamo. This article originally appeared on MarketWatch.com and is reprinted by permission from Marketwatch.com, ©2014 Dow Jones & Co. Inc. All rights reserved.