Counterfeit Crisis
Emily Burns
A customer walked into North Shore Exchange, a consignment store in Glencoe, Ill, looking to consign a $3,250 Louis Vuitton Monogram Kimono bag with red handles and a gold V on the front. Wendy Serrino, president of North Shore Exchange, had never seen this style counterfeited before but had a gut feeling it was fake because the stitching did not look correct. However, Serrino took it to the Louis Vuitton store for authentication where the employee checked the serial number and date code to confirm it was fake.
Consignment stores and name-brand designers are using new ways of authentication to counteract the selling of fake designer items. Luxury designers are suing counterfeit retailers and using microchip technology that can be scanned to prove an item’s authenticity. Consignment stores in the Chicago area are now training employees to spot fakes and keep authentication manuals on site to confirm styles, manufacture dates, stitching and material, and serial numbers.
The market of counterfeit designer items is calculated to be a $461 billion industry based on sales, according to the Organization for Economic Cooperation and Development, a corporation that promotes economic growth.
Federal law forbids knowingly selling and purchasing fake designer items; it can result in a ten-year prison sentence for first-time offenders.
Customers are drawn to these counterfeited items because of their affordable prices and accessibility. Northwestern University student Kayla Reardon owns a pair of knock-off Gucci slides. She purchased them because the real shoes cost $1,000, but her pair cost $50. Reardon said because fashion trends come and go so quickly counterfeit items are becoming more prominent.
“Even if I saved for them, it would be so long, and they would be out of season,” said Reardon.
Consumers can access fake luxury goods more online. Six of the top ten online fake designer websites are based in China, according to Red Points, an anti-counterfeit initiative.
Luxury designers are being forced to take action to protect their brand. Designers, such as Salvatore Ferragamo and Moncler are adding radio-frequency identification chips to their products; these can be scanned using a phone to confirm the item’s authenticity. Designers are also using holographic stickers, serial numbers, and fabrics infused with different substances, such as beeswax to make their items harder to replicate.
Some designers are taking this issue to court. Moncler went to court with a Chinese company, Beijing Nuoyakate Gourmet, which was selling counterfeited jackets. Moncler received $470,000 for trademark infringements from China’s Intellectual Property Court.
Chicago is the third most popular city for counterfeiting, according to the U.S. Immigration and Customs Enforcement’s Office of Homeland Security Investigations.
In the Chicagoland area, local consignment stores are taking action because customers are beginning to question whether their items are authentic, and counterfeits are getting harder to identify. Luxury Garage Sale, eDrop-off, and North Shore Exchange, consignment stores in Chicago, have authenticators on site who confirm the materials that items are made of, stitching and logos, serial numbers and date codes; they also investigate the weight and measurements of items. These stores have manuals with specifications on designer items for employees to authenticate anything that is brought in.
President of North Shore Exchange Wendy Serrino has resorted to taking items to the luxury store for authentication. In the case of the counterfeit Louis Vuitton bag, the employee at the luxury store knew it was fake because of the date code and the code’s location. If Serrino had consigned the item, the donor would have received $1,200, and the bag would have sold for $2,000.
“It would be fraud on our part selling to a customer who was buying it in good taste, and that’s our reputation,” said Serrino.
Bre Collins, an Authentication Associate at Luxury Garage Sale, said the critical aspect when authenticating an item is the date code. For example, she explained Louis Vuitton’s date codes follow a specific formula that represents the year it was made; Collins deciphers the code and confirms the bag was being produced that year.
“A red flag would be if it was a bag that had a year that didn’t exist or a year that was too early or too recent for the bag to have been created,” said Collins.
Collins said they also compare items to photos of the authentic ones to confirm overall craftsmanship. It takes her between 5 and 30 minutes to authenticate one item.
Each item sold through eDrop-off has a tag that is signed by its founder Corri McFaddon confirming the item has gone through their authentication process. McFaddon expressed her passion in authenticating items because she can protect shoppers; some counterfeit items could be detrimental to someone’s health or cause injury, such as counterfeit shoes with unsupportive soles or makeup made with harmful chemicals.
“We show all key points for a particular item that you need to buy it safely,” said McFaddon.
President of North Shore Exchange Wendy Serrino believes consignment stores are helping to counteract the trend of fake designer items because they are selling affordable, authentic ones.
“I think the resale market booming has helped people gain appreciation for authenticity,” said Serrino.
Authenticator Bre Collins believes consignment stores will become more popular online. She said for future online stores to combat the trend of counterfeit items, the authentication process is going to be essential, so online shoppers and designers are protected; Serrino of North Shore Exchange believes a store’s dedication to supply their customers with quality items will decrease the production of counterfeits.