Will Seippel | March 21, 2023

fraud alert warning
Consumers, collectors, and dealers must be vigilant to detect counterfeit collectibles.
Image: Shutterstock

Last month, a couple in Columbia, Missouri, was sentenced in federal court for smuggling counterfeit collectibles into the United States and selling them on eBay. Undercover Homeland Security Investigations (HIS) officers conducted a sting operation and nailed the perpetrators. They were charged with criminal copyright infringement, convicted, sentenced, and fined.

The couple had sold counterfeit Disney DVDs for years and profited handsomely from their illegal activities. Even though they may have thought they were only harming Disney, they were doing much more than that. The economic harm caused by counterfeit products affects honest online sellers & consumers in several ways.

How Do Counterfeit Collectibles Cause Economic Harm?

First, peppering the market with fake goods increases a given product’s supply. Increasing supply drives down sellers’ prices and cheapens the value of collectors’ assets. By offering counterfeit collectibles at low prices and undercutting legitimate sellers, dishonest actors undercut the competition, driving down prices across the board. This negatively affects profit margins for legitimate sellers at the wholesale and retail levels, leading to revenue losses for sellers and tax losses for public coffers.

Second, counterfeiting erodes consumer confidence and trust in online marketplaces. When consumers buy a counterfeit item, it wastes their money and chips away at their faith in online marketplaces as reliable places to shop for goods.

The sentence handed down to these criminals is a cautionary tale for online sellers and consumers across the United States. Counterfeit products are rampant on the internet, particularly in popular online markets. Fortunately, online platforms are actively striving to fix the counterfeit collectibles problem. To protect honest sellers and consumers from unethical sellers selling fake items, companies such as eBay and Amazon have implemented stringent measures that include verification processes for sellers and data-driven detection algorithms that scan for questionable products on their sites. Additionally, some organizations have even gone so far as to create anti-counterfeiting technology that allows them to monitor and trace counterfeit collectibles sold on third-party platforms.

These efforts by online marketplaces represent a significant step forward in the fight against counterfeit collectibles. By making it harder for dishonest sellers to peddle fake items on their platforms, these marketplaces incentivize legitimate businesses to join their ranks and provide honest shoppers with greater confidence when buying from them. But ultimately, it is up to consumers to practice due diligence when purchasing goods online to guarantee they get what they pay for—a genuine product that is not just a knockoff.

What can online sellers do to prevent product fraud?

  • Source products carefully. Buy only from reputable sources. Read reviews and investigate a seller’s reputation before making a purchase.
  • Research thoroughly before listing online.
  • Write clear product descriptions.
  • Review your return policy and adjust it to strengthen buyer confidence.

types of intellectual property
Protect your brand by registering your intellectual property.
Image: Shutterstock

Tips for Preventing Online Product Fraud

1. Protect your brand by registering your trademarks, patents, and copyrights with the U.S. Patent and Trademark Office (USPTO). This can prevent counterfeiters from using your branding and intellectual property without permission.

2. Be wary of unsolicited offers from suppliers. If you receive an email or message from a supplier claiming to have a “hot” or “exclusive” product, it is likely a scam. Stick to reputable suppliers that you have established relationships with.

3. Use a reputable payment processor to reduce the risk of chargebacks and fraud. Look for payment processors that offer fraud detection services and can help you resolve customer disputes.

4. Monitor your product listings regularly to ensure that no one else is selling counterfeit versions of your products. If you find any counterfeiters, report them to the online marketplace immediately.

By taking these steps, online sellers can protect their businesses from the harm caused by counterfeit collectibles. In addition, they can help to maintain consumer trust in online marketplaces and promote the growth of legitimate sellers.

smiling man with a shopping basket
Fighting online fraud builds consumer confidence.
Image: Shutterstock

Avoiding Counterfeit Collectibles

Ultimately, consumers should trust their instincts and be willing to pay a fair price for a quality product. Supporting legitimate businesses that provide authentic goods is good for the economy and the integrity of online marketplaces.

With the joint efforts of online platforms, legitimate sellers, and conscientious consumers, the fight against counterfeit products can be won. It may take time, but protecting the economy and people’s trust in online shopping is necessary.

The couple in Columbia is just one example of how online platforms can be used to facilitate product fraud. However, it serves as a reminder that the consequences of falling victim to counterfeit products are severe and far-reaching. We must be vigilant when shopping online and do our due diligence before making any purchases to ensure that the goods we buy are authentic and come from trusted sources.

Will Seippel is the CEO and founder of WorthPoint®, the world’s largest provider of information about art, antiques, and collectibles. An Inc. 500 Company, WorthPoint is used by individuals and organizations seeking credible valuations on everything from cameras to coins. WorthPoint counts the Salvation Army, Habitat for Humanity, and the IRS among its clients.