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How to Combat Counterfeit Fraud

Retail storefront with multicolored handbagsWherever there is opportunity, companies want to gain as much share as possible. Unfortunately, opportunity also means that there are criminals that see potential for themselves – from counterfeit money to counterfeit goods.

Counterfeit Fraud on the Rise

And, with the rise in online shopping for all types of brands, there is also an increase in counterfeit goods being sold online. According to Mary Meeker’s 2019 Internet trends report, e-commerce sales are continuing to grow, especially with more marketplaces like Alibaba, eBay, and Amazon that offer access to even more recognizable brands.

The 2018 Global Brand Counterfeiting Report noted that retail losses associated with these counterfeit sales reached $323 billion. It is estimated online counterfeit business will grow to $1.8 trillion by 2020 mostly in areas like branded makeup, skincare, and related products.

According to another article, 70 percent of counterfeit goods come directly from marketplaces like Alibaba and others, which has led many clothing, accessories, and perfume brands to sue these sites. Even consumers who are buying products via social media sites, like Instagram, are finding they are stuck with counterfeit goods.

As a retailer, it’s important to know how to combat this counterfeit fraud so you don’t perpetuate it and inadvertently sell these goods to your customers.

Beware of these 6 fraud tactics

How to Fight Online Counterfeiting

There are numerous ways that online retailers can help stop these counterfeiters.

  • Incorporate new technology solutions that employ blockchain. Using this technology can be a way to ensure that every item you are selling on your online store is legitimate. Verifying the authenticity of everything you sell can help increase your online store’s credibility with customers.

  • Monitor distribution channels where you buy from. To push the counterfeit detection farther up the chain, it helps to monitor the distribution channels you use to get your products. While these counterfeiters work diligently to present themselves as legitimate, you may still be able to identify them through their promotional efforts that often include paid search advertising and social media links. Research these distribution companies before you do business with them. Only work with distributors where you can confirm they have real products.

  • Have a minimum advertised price (MAP) policy. Invest in brand protection, MAP monitoring, or brand compliance software. The software uses machine learning to predict words and images associated with your product portfolio. The software monitors thousands of marketplaces, social media channels, search engines, and websites to stay updated on unauthorized sellers who are offering counterfeit goods. That way, you can avoid partnering with these sellers or distributors to ensure you only work with legitimate branded product sources.
  • Educate your audience. Do your part in shutting down these counterfeit companies by getting your audience to understand what to look for and how to avoid these counterfeit dealers. By taking away their audience through education, you’ll be able to cut them off from the opportunity that originally drew them to your sales channel.
  • Become globally aware. Since much of the counterfeiting is occurring in other countries around the world, you’ll need to expand your anti-counterfeiting strategy to the global stage. Be attuned to the tactics used by these international counterfeiters. This includes accessing resources that help you with language translation, price monitoring, and international crime operations.
  • Be proactive and vigilant. The reality is that as long as e-commerce continues to grow so will the attempts by criminals to profit from counterfeit merchandise. That means you’ll need to continue paying attention to the tactics of counterfeiters, what they are trying to sell, and how they are trying to make themselves – and their merchandise – appear legitimate. Over time, they may change their tactics, approaches, and even names to catch you off guard, so you’ll need to continue monitoring each distribution relationship you form.

Following these strategies can help you diminish the risk of selling counterfeit goods, while helping your audience feel confident in buying from your brand. Work with third-party sales platforms to help identify and stop these counterfeiters so they have fewer opportunities to leverage online. By doing so, you’ll be able to create a more secure selling environment for everyone.

READ ABOUT FRIENDLY FRAUD


BluePay is pleased to bring you this valuable information from, Due, makers of a free digital wallet that allows users to easily make and accept payments online.

Topics: Due.com Partner Posts, E-Commerce and Online Payments, PCI Compliance and Fraud Prevention

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