People now are willing to consider online retailers when they want to buy items unavailable or hideously marked-up in Saudi shops. Unfortunately, while searching online for bargains, consumers can be fooled into purchasing counterfeit goods. Last week, the US Federal Courts ordered the seizure of 150 website domains involved in selling counterfeit products.
In addition to the fact that counterfeits are substandard products which steal profits from legitimate businesses, after the websites' seizure, US Immigration and Customs Enforcement’s (ICE) Director John Morton stated, "the ramifications can be even greater because the illicit profits made from these types of illegal ventures often fuel other kinds of organized crime.”
"Consumers have a misconception that on the Internet everything can be purchased at a lower price than in traditional retail outlets," said Alina Halloran, VP of Online Brand Protection for OpSec Security, Inc. "Consumers must consider if it's a five or ten percent savings or if it's thirty to forty percent off, or even more. If you're getting a designer handbag at fifty percent off, it's clearly not going to be genuine. I don't think that people
understand this. Consumers think that they're getting a special deal or that it's coming from another region where it's sold for less and that's usually not the case."
Makers of luxury goods, electronics and other branded consumer products are remarkably consistent in their pricing worldwide. Doing a little pre-purchase research is a great strategy to help consumers discover if items offered for sale online are genuine products. Determine the country where the brand owner manufactures goods. Check the Protection forOpSec. product number and see a picture
of the item from the manufacturer's website. Find the price at the manufacturer's website or at reputable online retail establishments online. Halloran commented that incorrect product numbers, a misspelling or distortion of a label or logo, missing accessories or a product that doesn't have the same attributes as the genuine one are all indications that an online retailer is stocking counterfeit goods.
Counterfeiters can sell at low prices because there's no need to use quality workmanship and material in the manufacturing process. Product development and marketing costs are non-existent and there's no requirement to set up decent working conditions for employees. The shoddy workmanship of fake products goes beyond issues with appearance. OpSec has found that counterfeiters cut corners by substituting low-cost ingredients, materials and parts that can be harmful, such as urine or toxic chemicals in perfumes, and malfunctioning batteries in electronics.
According to Halloran, the sale of counterfeit goods worldwide is estimated to be worth $600 billion annually. Huge amounts of money are made by counterfeiters through online sales. In a recent industry snapshot that examined consumer products listed on popular business-to-business trade boards which sell goods to businesses at wholesale prices, OpSec found that the watch category contained more than 1.3 million listings. Fossil branded watches had an average
quantity of 206,000 units based on a random sampling of listings. From OpSec’s years of experience in analyzing activity on these trade boards, the company has found that a large percentage of branded accessories offered on trade boards are counterfeit. At an average retail price of $75 per unit, the total retail value of a typical listing was estimated at $15.45 million, an indication of significant potential sales loss for the actual brand owner and potentially a massive gain for the criminals.
Of course there's a reason why product counterfeiting is becoming increasingly popular with organized criminals compared to other profit-making crimes, such as money laundering. "Counterfeiting doesn't come with the kinds of penalties common with many illegal transactions such as selling illicit drugs," explained Halloran. "It's an easier way to stay under the radar and perhaps fund other types of criminal activities."
OpSec is providing anti-counterfeiting technologies as well as solutions and services for physical and online brand protection to over 300 companies across industry sectors and over 50 governments worldwide. Regrettably intellectual property laws and enforcement are not strong enough everywhere and the large quantities of fake goods coming across borders lead to counterfeit goods popping up in almost every country. If at inspection, Saudi Customs authorities do recognize that a package sent from an online vendor contains a counterfeit product, it won't be allowed entry to the Kingdom, and the buyer would lose the purchase price.
Halloran is of the opinion that changing laws to drive counterfeiters out of business will take a long time and Customs authorities can't be expected find all the fakes. However, there are many ways to reach out to consumers directly and educate them on what to look for and the dangers of buying counterfeit goods. It's common for consumers to give priority to the price of an item in a purchasing decision. If more people thought about how idiotic it would be to buy a watch that won't keep time, jeans that will probably fall to pieces after a few washes, or an espresso machine that's only guaranteed to melt into the kitchen counter, they might think twice before giving their hard earned cash to organized criminals through buying counterfeit goods online.
