Have you ever bought an item from a street vendor, flea market or online at a price that seemed too good to be true? Maybe it was a brand-name purse or the latest phone. It could have been clothing or those expensive running shoes. Whatever the product, when the price is too low to be true, there is a good chance that the product is counterfeit.
Two-thirds of all counterfeit goods come from China, and in 2008 there were more than 4 million possibly counterfeit listings on eBay alone! Squeezing real goods out of the marketplace and adjusting (lowering) what people are willing to pay for them is another detrimental effect of counterfeit goods. They also cost the people making the genuine articles jobs.
Counterfeit goods are simply replicas of the real product. These goods typically include electronics, clothing, handbags, software, toys and even pharmaceuticals. Some of these goods are made in the same factories that produce the real product, while others are made simply by taking apart the real product and trying to imitate it.
Counterfeiting Costs Jobs
One of the costs of counterfeiting is jobs. In the United States alone, close to 1 million jobs are lost every year due to fake products. This job loss affects already struggling urban areas and cities, including Detroit and Los Angeles. Manufacturing jobs, retail jobs, and even transportation jobs are lost. For example, one factory can produce enough product to fill 16 miles of train cars!
Amongst the most popular counterfeit goods are some of the most dangerous. Counterfeit pharmaceuticals account for $94 billion in annual sales. The Food and Drug Administration warns that counterfeit drugs often contain contaminated ingredients or the wrong active ingredient. For people with serious health issues, counterfeit drugs can have a lethal impact.
Other counterfeit goods that cause problems include counterfeit (and defective) automotive parts, electronics that can catch fire and software that is infected with spyware or viruses. The best action for consumers to take is never purchase these poorly made goods.
The Costs, Adding Up
In addition to the cost in jobs and loss in revenue to the manufacturers, additional costs include those take when music, art and other intellectual property is stolen. These costs are compounded by court costs, when and if the criminals are prosecuted. Yet because much of this counterfeiting takes place overseas, many of these counterfeiters will never see justice.
Just take a look at this infographic and see the numbers for yourself!