When it comes to underground criminal businesses, the sale of counterfeit goods is bigger than weapons smuggling and human trafficking , doubling even drug trade in total global worth.
Knock-off Ray Bans, Rolexes and other designer goods, touted on bustling streets, are so ubiquitous and easy to get in urban spaces that the sales pitches often cease to have meaning, receding into the general buzz.
But behind the haggling of “Gucci” handbags is a lucrative industry that generates illegal funds, all the while posing a serious threat to the legitimate economies they circumvent.
Here are 5 things to know about the cost of counterfeit goods.
1. Counterfeit trade is a billion to trillion dollar industry
Estimations range from $250 billion, according to the UNOCD, to $600 billion according to the World Trade Review, and $1.77 trillion according to the IACC. It’s difficult to say which figure is most accurate, but regardless, the number is huge.
2. The sale of counterfeit goods hurts people and the economy.
Though it may be tempting to buy that pair of shoes for a fraction of the designer price, that discount comes at a cost to many.
While it’s been shown to boost China’s GDP, 8 percent of which is thought to come from such sales, it undermines that of the US and other countries the items are sold by depriving governments of revenue and placing additional burden on taxpayers.
That’s not to mention the workers making the products, who almost certainly have little legal protection from sweatshop conditions, given the illegality of their products.
3. There are many, many types of counterfeit goods to look out for.
Your mind may go straight to watches, but counterfeiting is a just about a limitless industry.
In order, the top items are footwear, consumer electronics, bags/wallets/backpacks, apparel, watches/parts, computers and hardware, bootleg media, pharmaceuticals, jewelry, and toys and games.
4. Counterfeits can be a safety hazard for buyers
There’s a reason the real thing is so expensive: it’s properly made and tested for consumer use.
Counterfeit items are not set to high standards, and while this may not be a big deal for handbags, the threat to safety is extreme when it comes to things like automotive parts, pharmaceuticals, electronics, and even toys. Such items can catch fire or poison users.
5. Legitimate companies lose money to counterfeit
About $500 to $700 billion (in earnings, revenue, etc) is estimated to be lost every year to legitimate companies whose products are copied or faked.
Tax revenue is also lost through counterfeit sales to the tune of $125 billion in developed countries alone. Add in the cost of healthcare and crime prevention and an estimated 2.5 million lost jobs, and it’s clear the issue goes beyond faux leather.
Moral of the story? If you’re going to go designer, you might as well go all in. There are plenty of legal options available — like second-hand, or affordable brands — that can satiate your thirst for hot products while still maintaining your moral and legal bearings in a world full of commercial temptations.