Sweatshops; source: fee.org

What’s wrong with buying fake luxury goods?

Let me be honest. I’ve done it. In my checkered student past, I bought a couple of fakes. In the first case — I wasn’t even aware I’m buying one. How come? — you may think. Well, following latest fashion was never my thing and while scrolling through thousands of dresses on famous marketplace I stumbled upon one dress. I like to shop for original (pun intended) designs, something edgy and non mass-made, and that dress was exactly what I liked.

I didn’t know it was a copy of a famous designer until the dress arrived to my door. On the product photos on the website there were no tags, no names, just words high quality summer dress Italian inspiration design. At that time Aliexpress was just starting to become popular so I didn’t really pay attention to WHAT I’m buying. I just liked how it looked. When it arrived, I noticed that the dress was of beautiful quality. There was just one problem — the tag was carrying a very well known brand name.

Sellers smartly declared the minimum value of the package of couple of $ so the package didn’t even go through customs inspection to be taxed. Yes, I loved the product when it arrived two weeks later, but it made me feel phoney wearing it.

I was just a regular student with no rich family or running business, so I was fighting a hidden war with myself. And it turns out I wasn’t the only one. I later read about the research conducted by three scientists — Francesca Gino of the University of North Carolina at Chapel Hill, Michael I. Norton of Harvard Business School and Dan Ariely of Duke University, who have been exploring in the laboratory the power and pitfalls of fake adornment. Their research suggested that knockoffs may not work as magically as we would like. Wearing counterfeit not only usually fails to bolster our ego and self-image the way we hope, it actually undermines our internal sense of authenticity. “Faking it” makes us feel like phonies and cheaters on the inside, and alienated on the outside. Counterfeit “self” leads to cheating and cynicism in the real world.

So, apart from hidden psychological costs, why is buying fake luxury goods wrong?

Well, counterfeiting is a serious economic and social problem, saying that it’s epidemic in scale — won’t be an exaggeration. Most people buy these fake brand-name items because they are a lot cheaper than the real deal and for some reason there is some kind of social consent for selling and wearing counterfeit items. You don’t also need to dig deep to find hundreds of websites shamelessly explaining how to find and buy a good quality fake. Cartier would be found under “c luxury watch”, while Chanel would go under cc/ double C.

The problem with this is that a designer that lends her/his name to the brands is just one player in a whole ecosystem. If a person buys a fake, it means that they don’t buy an original. True, some people wouldn’t be able to afford one anyway, but as we know, scarcity and limited access drives value up (or at least keeps it firmly in place). However, if enough people buy and wear fake, plummeting sales lead to changes in the industry. Typically, companies develop new technology to combat counterfeiting or end up having to sue copycats. These costs end up getting passed to the consumer. Another scenario is that lower demand could lead to lay-offs for people involved in the manufacturing process. Counterfeiting ends up damaging the very industry it tries to copy.

Charade woven of Hermes silk

Ultimately, the main ingredient of a counterfeit is deception. Something is passed off as something else. When you purchase a fake item, you become a part of this charade. This brings the question: Why the need for all that deception? Surely, it’s not the quality, because copies are never as good as the original. It is also not an investment piece because a fake piece does not appreciate in value like some luxurious bags do.

The popularity of fake goods and defense of counterfeiting should offer an opportunity for introspection. To some degree, fashion is form of expression. You inevitably say something about yourself. This is true with luxury brands. Gucci is hip. Hermès or Philippe & Patek value heritage. Goyard is about craftsmanship. In patronizing copies and choosing to brandish them despite knowing their fakeness, what do you end up saying about yourself?

Buying fake luxury handbags isn’t as innocent as you think. There are many hidden dangers behind the illegal trade.

The wrongness of purchasing counterfeit items doesn’t limit to moral integrity impact or the lost sales of the rights owner. It reveals many hidden dangers behind the illegal trade.

Last week I’ve had the chance to attend OECD Task Force forum on Countering Illicit Trade in Paris and the findings are more than worrying. You don’t need to be genius to see that counterfeiters do not pay taxes, which results in less money for your city’s schools, hospitals, parks and other social benefits. Most counterfeit goods are produced in sweatshops run by organised crime in a professional manner.

Media like to report decreasing numbers of violent street crime related to illicit trade, but the truth is — it’s getting of bigger and bigger problem. The only difference is, that it’s no longer baseball bats and fists, but hidden from a daylight organised operations with great use of technology. Blockchain and cryptocurrency can help with staying anonymous while decreasing chances of tracing the roots of particular crime.

In other words, profits often support terrorist groups, drug smugglers and sex traffickers, although it’s hard to estimate the real scale of this problem.

Smuggling cigarrettes; Source: Wikipedia

Would you buy Viagra if you knew it’s not legit?

Unlike legitimate products, counterfeits aren’t inspected or regulated by government agencies. Fake goods are often bad quality and in many cases — unsafe. Counterfeit electrical goods are not put through the same vigorous safety checks as legitimate items and are often very dangerous. Fake cosmetics, pharma and fragrances have been found to contain toxic levels of chemicals and unpleasant substances, such as arsenic, mercury and even urine, that at best — would simply not work, and at worst — could seriously harm your health.

Because of this lack of regulations, there are no guarantee of safety or productiveness. You’re never sure if the products are sourced from seedy sweat-shops that employ children.

If you still need convincing on the dangers associated with this phenomenon, I recommend watching Alastair Gray’s TED talk on counterfeits:

As we at at Tracemarq.com are building a Blockchain-based tool helping to trace counterfeited goods, I’d love to hear your thoughts — do you approve or disapprove buying them?

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