The Costs of Counterfeits

Ryan Heshmati

March 10, 2023

Many think, “what’s the harm?” They want the name brand but nothing else. Counterfeit goods are plaguing society. From markets to e-commerce trading, fakes are dominating. The U.S. Chamber of Commerce estimates, “Counterfeit products cost the global economy over $500 billion a year.” Fake Gucci, Louis Vuitton, and Rolex not only cost consumers economically, but they also cost consumers integrity. If one believes that the hefty price tags accompanying luxury goods are unjustifiable, that is fine; however, buying the fake is not and involves many problems.

First, where does the money a buyer spends on a fake go? Illegitimate businesses produce illegitimate goods. In the most serious cases, that fake watch one purchased online could be funding terrorist organizations. Homeland Security’s Bruce Foucart spoke regarding the connection between the sale of counterfeit goods and one French terrorist incident, “There’s a direct link.” However, the issue with counterfeits does not end with the trail of money.

Beyond societal harm with the funding of criminal enterprises, fake goods can also cause direct harm to users. Counterfeit goods are often made as cheaply as possible; after all, doing ethical business generally is not at the forefront of these producers’ decisions. Red Points’ Ryan Williams uses the example of fake cosmetics, asserting, “… [they] are often riddled with a huge variety of disgusting and toxic ingredients, including… mercury, lead, cyanide, arsenic, [and] paint-stripper.” The inherent lack of regulation surrounding these products makes them uniquely susceptible to becoming health hazards.

Further, the use of counterfeit goods is a projection of falsehood. Take the instance of a Rolex Daytona super clone, as highlighted by Watchpro’s Andrew Seymour. Even the experts concede the fake is so close that “ … [it] has been designed to fool all but the most avid Rolex experts.” While the wearer can fool others with a knockoff, they can never fool themselves. These counterfeits push individuals to be a person they are not, which adds to their detriment, extending beyond economics.

Counterfeits are everywhere, and there is a significant market for them. The profits from that industry do not go to the best places, however, and can fund terrible activities. These fakes can also pose health risks, particularly highlighted by counterfeit cosmetics. Ultimately, the products cannot fulfill as their wearers will be forced to recognize the constant fraud they propel with every use. While authentic luxury goods are expensive, on aggregate, the counterfeits prove more costly.