The holiday season is fast approaching and despite the COVID-19 pandemic consumers are expected to partake in a substantial amount of holiday gift giving. A recent report by Deloitte suggests that holiday retail spending could increase as much as 1.5% this year, rising to over $1.15 trillion in sales between November and January. When coupled with the rising dominance of e-commerce, which has been fueled by the pandemic, it can be expected that much of this spending will happen online as consumers continue to grapple with the impact of COVID and retail closures. Yet, as highlighted by a recent NPR story on counterfeit Lego kits, consumers must remain ever vigilant about the threat of counterfeit toys, gifts and other products that make up the bulk of holiday purchases. Whenever and wherever consumers spend their hard earned money, counterfeiters seemingly are standing ready to take advantage and make a profit.
According to a Toy Association report, counterfeiters’ use of deceptively similar logos, artwork and trademarks creates serious issues for consumers seeking to purchase legitimate products. Consumers equate product quality and safety with a brand’s reputation and counterfeiters will use consumer trust in a brand to mask the illicit nature of their products. The Toy Association report goes on to highlight the risks posed by online marketplaces, stating that “consumers are largely unaware of the scope of infringing product available” on these sites. Furthermore, the Toy Industries of Europe, an industry association, states that “toys are the 6th most counterfeited product in the EU, and online sales pose an increasing challenge for EU enforcement of IPRs [Intellectual Property Rights].”
For consumers, the risks of online shopping during the holiday season are increased because they are at an informational disadvantage. When shopping online consumers only have access to the data and information that are provided by sellers and the platforms. Online platforms offer counterfeiters a high degree of autonomy and invisibility, which they use to deceive consumers into believing that their illegal products are legitimate. Many of the cues that consumers use to distinguish counterfeit products from legitimate goods are not effective in the online environment. For example, researchers from the University of Nebraska, University at Albany (SUNY), and Arizona State University identified the following cues most prominently used by consumers:
· Where the item is being sold. The more legitimate the outlet, such as an established marketplace or retail establishment, the more trust consumers had in the legitimacy of the goods.
· The price of the items being sold. Pricing that was deemed to be ‘substantially lower’ than what a consumer would expect to pay was seen as a major cue that the item was fake.
However, the consumers who participated in this study also stated that they would have a very difficult time distinguishing legitimate from fake if both goods were available in the same outlets at similar prices. When such confusion exists, consumers indicated that they would rely upon an assessment of the product’s quality or performance, once purchased, to make a determination about its legitimacy. By this point it is really too late to do anything about identified counterfeits, particularly if the item is already in the hands of a child.
For consumers shopping online the value of using location and price as indicators of illegitimate goods is negated by the fact that counterfeit products are distributed, sold and purchased through legitimate e-commerce marketplaces that are considered reputable. Additionally, many consumers go online in search of low-price bargains and use e-commerce as a way to find “deals” that are not available in physical retail outlets. The goal-oriented nature of consumers’ online shopping behavior is associated with a desire to find the best available price for a specific item. Low prices are no longer signals that a product may be fake, but rather a draw to consumers who are shopping in very purposeful ways through online marketplaces. In essence, e-commerce platforms such as Aliexpress and Alibaba
E-commerce platforms pose significant challenges to consumers who are looking to purchase legitimate goods, yet are often duped into buying products that look authentic but in reality are fake. The coming shopping season will pose additional threats to consumers a spending is expected to be up over last year, and online spending is expected to sharply increase over previous holiday shopping seasons. So what can consumers do to protect themselves? First, it is essential that consumer do all they can to verify the sellers of products they find in online marketplaces. Ensuring that products are being offered by the company that actually produces the product they are seeking is one way to reduce risk, yet this is not foolproof. Counterfeiters have stolen legitimate company names before to act as an authorized seller on major e-commerce platforms. In addition to this, is it recommended that consumers seek to delay their gratification a bit and do some due diligence before handing over toys to children. If something about the product or packaging seems a bit off, consumers are encouraged to contact the product manufacturer and seek assistance. Finally, consumers should remain vigilant about the realities of holiday shopping – if one person or seller is offering a product that is out of stock with the legitimate manufacturer, be wary of that seller. Counterfeiters thrive off of consumer demand, and having the ability to meet the needs of every consumer who is in search of the hottest, most in-demand toy is every counterfeiter’s dream. Consumers, take notice: counterfeiters don’t take holidays, they thrive off of them!