Nice kicks. But what if they were made by a slave?

If you’d like a luxurious handbag or a pair of top-of-the-line sneakers for a fraction of the retail cost, you’re not alone.

Consumer demand for steeply discounted designer merchandise ensures street vendors a brisk business in fashions and accessories that look like authentic runway styles. But while those trendy handbags might appear to be a bargain, the hidden costs are staggering.

Handbags stacked at a market (Ian Law/Shutterstock)
Counterfeit handbags are displayed at an outdoor market. (Ian Law/Shutterstock)

Counterfeit products cost the global economy an estimated $250 billion a year. That figure translates into lost revenue to legitimate designer businesses and their employees — and, as a consequence, lost jobs.

Manufacturing, distributing and selling counterfeit goods is illegal and unethical. Buying designer “fakes” (goods that carry a designer’s logo or label but were not made by the designer’s company) violates the intellectual property rights of the designer.

Infographic showing the differences in terms between counterfeit, knockoffs and pirate (State Dept./D. Woolverton)
(State Dept./D. Woolverton)

The costs of being a fake fashionista

Purchasing counterfeit products isn’t a victimless crime.

  • The buyer deprives designers and other copyright holders of the fruits of their labors and unfairly transfers those profits to others.
  • Fake goods undermine innovation, hurting consumers and businesses alike. Why should talented designers create an awesome handbag or iPhone case if they can’t reap the financial rewards of their creativity?
  • Counterfeiters “do not pay taxes, meaning less money for your city’s schools, hospitals, parks and other social programs,” says the International AntiCounterfeiting Coalition (IACC), a nonprofit organization devoted to protecting intellectual property.
  • Because most counterfeit goods are produced in sweatshops run by organized crime, profits often support terrorist groups, drug smugglers, sex traffickers and street gangs. Sweatshops, in turn, are notorious for violating child-labor laws and basic human rights, and many workers are coerced through a system of indentured servitude, a form of modern-day slavery.
Counterfeit electronics on display at an outdoor market (Ian Law/Shutterstock)
Counterfeit electronics, seen here at an outdoor market, offer cheap prices but no assurance of quality. (Ian Law/Shutterstock)

Few consumers want to subsidize organized crime, of course. Most simply don’t realize that’s what they’re doing when they buy logoed items or pirated DVDs from a vendor charging rock-bottom prices for goods that are supposed to be the real thing.

Not just fashion: Deadly fakes

The problem isn’t confined to fake designer apparel. There are counterfeit pharmaceuticals, consumer electronics, computer parts and software, cars and car parts, motorcycles, airplane parts, compact discs, DVDs, toys, watches and jewelry, just for starters.

Some fakes are unsafe, or worse. Counterfeit drugs that supposedly treat cancer, HIV and malaria have led to deaths, as have counterfeit electronics, vehicle airbags, cosmetics, baby formula and other food products.

Counterfeit pharmaceuticals in packaging with skull and crossbones it (Shutterstock)
Bogus pharmaceuticals can pose a deadly threat to people who use them. (Shutterstock)

Unlike legitimate products, counterfeits aren’t inspected or regulated by government agencies, so consumers have no guarantees of safety or efficacy. Cracking down on counterfeiting protects consumers — and legitimate jobs and industries worldwide.

Consumer beware — and be aware

The United States, with its huge markets, remains the Number 1 destination for fake merchandise.

Federal agents work hard to block counterfeit goods at the border and seized $1.2 billion worth in fiscal year 2014.  Apparel and accessories ranked Number 1 on the U.S. Department of Homeland Security’s list of top 10 counterfeit commodities seized that year.

Federal agent examining seized counterfeit goods (U.S. Dept. of Homeland Security)
A U.S. Customs and Border Protection agent examines counterfeit goods seized at a Los Angeles–area cargo processing facility. (U.S. Dept. of Homeland Security)

Fake luxury items are also sold online, frequently through websites designed to look like legitimate retail sites.

Doing business on those illegal websites could cost you dearly.

Buying on illegal websites puts you at risk for identity theft and credit card fraud when you provide a counterfeit merchant with your information, says the IACC, and “downloading or streaming from illegal websites could put you at risk for malware, which can steal your personal or credit card information.”

Consumers of counterfeit goods are also at risk of fines or even arrest.

“In France and Italy, the penalty for purchasing a counterfeit item can be as much as 300,000 euros [$322,176] and, in France, even jail time,” adds Susan Scafidi, an expert on international fashion law who directs the Fashion Law Institute at Fordham University Law School in New York.

Man standing on the street trying to sell counterfeit goods (Tupungato/Shutterstock)
Vendors attempt to lure passers-by in Rome by offering counterfeit goods at cut-rate prices. (Tupungato/Shutterstock)

According to the blog nepaliaustraliana tourist was fined $1,450 for buying a fake Louis Vuitton handbag for $10 in Italy. “Officers taking part in a crackdown on counterfeit goods observed the transaction through binoculars,” the blog reports.

The U.S. concentrates its law enforcement efforts “on the supply side rather than on the demand side; that is, on manufacturers and retailers rather than consumers,” says Scafidi. “It is, however, illegal to bring into the U.S. more than one counterfeit item per class of goods” — that is, more than one fake handbag or one pair of fake sunglasses. “Any more than that may be considered trafficking.”

In the U.S., the Department of Homeland Security combats counterfeit goods. (English video)

How to spot a fake

If you aren’t sure whether an item is authentic or fake, visit the Authentics Foundation, an international nonprofit group that aims to educate consumers about the counterfeiting industry’s links to crime. In addition to a roundup of anti-counterfeiting news, the site offers guidance on how to spot fakes and how to avoid being scammed.