Counterfeiting isn’t a victimless crime since it’s so prevalent worldwide, but do you understand why counterfeit goods are bad? Who is paying the price – sometimes literally – for the rampant counterfeiting of consumer goods, pharmaceuticals, and food?
The answers depend on who’s asking the question, so here’s what we know about how detrimental counterfeiting can be for brands, local economies, and global markets too.
What are the dangers of counterfeit products
The Counterfeit industry has consequences in the real world, yet many people assume the problem isn’t as severe as it actually is. After all, if a product looks similar to a genuine item and works the same way, is there a reliable way to tell whether or not the product is legitimate? The answer is no. No, you don’t know at a glance, especially if it’s a noteworthy forgery.
In a worst-case scenario, it becomes a safety issue. Indeed, counterfeits like adulterated medications can cause death, severe injury, or introduce unnecessary health risks. Not only that, but this illegal activity decreases a product’s quality in general since consumers won’t be able to tell if the sold items are authentic and or fake. The only natural result is that the brand loses revenue, reputation and struggles to maintain profitability.
Making matters more challenging, counterfeiting can also be a financial crime if the forgery is blatant and supports illegal activities like selling illicit drugs online on the internet. No matter how you examine the problem, there’s no denying it’s persistent, threatening, and demands a solution before counterfeiting increases any further.
Types of counterfeits – Why is buying counterfeit goods bad?
Unfortunately, many people don’t consider buying counterfeit goods morally wrong. In fact, they may seek it out to pay far less than what a genuine product is really worth. For example, there’s no way an authentic Rado luxury watch should cost only $50, yet many consumers choose to make themselves part of the crime and knowingly buy fake products from suspicious sellers.
But it’s a different story when consumers are victims of deception, like when they buy a fake Rado watch for a retail price of $2,000. And there’s yet another type of counterfeiting that fools consumers into believing a product comes from a legitimate brand when it’s a lookalike.
Counterfeiters and criminals have every financial incentive they need to forge products with meticulous detail, and most of us will never be able to distinguish fakes from real items.
Why are counterfeit goods a problem?
Overall, counterfeiting is a global problem with billions of counterfeits seized each year by customs, but some parts of the world are hot zones for forgeries and fakes. While counterfeit goods can come from anywhere, the consensus among authorities is that China is the main culprit, followed by Hong Kong and Thailand, but why? What makes these countries more culpable than others?
The answers revolve around loose oversight, loose enforcement of intellectual property laws (if any), or the financial incentive to damage international brands to help domestic companies instead.
Generally, the worst counterfeit items include brands of consumer goods from the following industries:
- Luxury apparel
- Financial documents
- Health supplements
Those might be the most common, but criminals will go to any lengths to forge any product (such as toys for instance) if they can turn a quick profit – and avoid arrest and imprisonment.
On the demand side of the equation, the biggest market for fake goods is still China despite increased enforcement to keep counterfeit products from entering the economy.
The authorities and customs in the U.S. are working hard to catch lookalikes and knock-offs as they come ashore and ensure citizens safety, but law enforcement can’t stop everything since the problem is so persistent. However, the penalty for counterfeiting merchandise alone is still high: a maximum of 10 years imprisonment and up to a $2 million fine.
The direct bottom line is this: A Holy Grail to prevent all counterfeiting doesn’t exist, and it never has because visual solutions are inevitably forgeable. It’s not a matter of skill; it’s a matter of will. As in, how much effort are criminals willing to spend to ply their trade and turn a profit?
Currency notes have dozens of security features, which ideally prevent or deter counterfeiting, but there’s no way to protect physical products the same way. Sometimes, the only effective strategy to combat counterfeits is to educate consumers on why it’s essential to only purchase through legitimate vendors, especially when the items are sold online.
Ultimately, the best way to thwart counterfeiting is to put a plan in place and execute it step-by-step.
Invisible solutions are most suitable for anti-counterfeiting
Visual markers, no matter how subtle or hidden, are forgeable. That’s the truth about why traditional anti-counterfeiting protections don’t work. Counterfeiters eventually catch up to the measures and adjust their methods accordingly. It’s a constant back-and-forth between brands and counterfeiters that isn’t getting better at the time of this writing.
As an alternative, a better solution is to make counterfeit protections invisible to the naked eye and trick the tricksters working hard to outsmart traditional safeguards. The ideal solution would first identify and alert you when it’s time to fix the problem. Still, the best measures actually fix the problem, and the end-user has no idea that invisible identifiers exist.
Cryptoglyph – Packaging and Label Protection
AlpVision digital anti-counterfeiting solution is Cryptoglyph, a packaging, and label protection software, among other technologies AlpVision can provide. With Cryptoglyph, you can optimize anti-counterfeiting measures at scale since the solution imprints microscopic holes that counterfeit artists can’t imitate.
Instead of placing a glyph in a prominent place, Cryptoglyph marks products in the varnish layer, solid colors or other areas that make these tiny identifiers invisible.
Cryptoglyph allows you to scale up anti-counterfeiting measures when appropriately configured, especially when you add our next layer of protection: AlpVision Fingerprint.
AlpVision Fingerprint – Physical Products Protection
At its core, AlpVision Fingerprint gives brands the ability to verify the authenticity of a product through digital imagery but at a granular, microscopic level invisible to the naked eye. Our technology captures reference images, saves the information in a database, and verifies that the surface structure coincides with a legitimate physical product.
If the software identifies any defects or oddities, a smartphone app will notify you that the item didn’t come from the same molding, rolling, and stamping manufacturing processes. With AlpVision Fingerprint, there’s no need to change products or production since the solution relies on digital imagery, verifying authenticity based on the unique microscopic irregularities on the surface.
Yet, when companies deploy both of our technologies to bolster anti-counterfeiting – Cryptoglyph and AlpVision Fingerprint – you can combine the best of both solutions to stay ahead of fraudsters and con artists.
Would you like to read on about how we can help you improve anti-counterfeiting measures?
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