Fake Luxury Items Getting Harder to Spot

The Wall Street Journal has a good article on counterfeit luxury goods.  The thrust of the article, and where appraisers should be interested and also concerned is that fakes are getting better, using higher quality materials and better craftsmanship.  It is getting to the point that even sophisticated buyers of luxury items are getting burned on the secondary market.  The WSJ article states to avoid the counterfeit items buy from authorized dealers and if the price is too good to be true, expect the worse.

As appraisers we have always been aware of knock off luxury items such as handbags, but have given them little consideration as many of the fakes were so poorly made they really did not fool anyone, especially general content appraisers or auction house specialists.  Now, with higher quality craftsmanship and materials it will become harder to differentiate between the counterfeit and the authentic.

Can you tell which is the real Hermes bag?  Answer below.

The WSJ reports

"Fighting counterfeit goods is a major concern," a spokeswoman for Chanel said in a statement, adding that the brand dedicates "considerable financial and human resources" to pursue producers of fake goods. The company said that "some counterfeit leather goods do look a lot like the real thing." The only way to ensure a bag is actual Chanel, the company said, is to purchase it directly from Chanel or its authorized retailers.

More than 60% of counterfeit goods seized by U.S. agents last year came from China, which has a sizeable pool of highly skilled labor and is increasingly the source of legitimate luxury goods manufacturing. Seizures from China rose 18%, in part the result of higher mail activity.

Online sales of counterfeit goods make fighting back a much more complex task than it used to be, says Tom Onda, chief intellectual property counsel at Levi Strauss & Co. Instead of scouring flea markets and raiding retailers, "trying to monitor the Internet is a Herculean task," he said.

The jeans maker has a team of 40 employees worldwide who, among other things, keep tabs on unauthorized sites selling its product. When a cease and desist letter doesn't suffice, the company works with the Internet service provider to take down the site, Levi's said. It also may file civil action. But successfully taking down a site doesn't mean removing the product from the marketplace, Mr. Onda said. Often merchants just set up a new domain name.

To fight back, more brands are turning to authentication devices into their merchandise. Levi's is researching a new type of labeling technology to help its own anti-counterfeiting teams identify its products as authentic. Mr. Onda declined to provide specifics. High-end denim brand True Religion Apparel Inc. puts a security device into each pair of its jeans, said Deborah Greaves, security and general counsel. Mr. Onda and Ms. Greaves declined to give specifics citing concerns that details would undermine their security efforts.

The light brown bag is the real Hermes bag, the darker example is a counterfeit.

Click HERE to read the full WSJ article.

---