Why Fakes Destroy Value

It's not unusual to encounter people who think that the concern over fakes and counterfeit items is somehow exaggerated.

This often goes hand-in-hand with the view that attempts to track down and punish the perpetrators is somehow the product of commercially jealous 'mega enterprises' that can't compete with the 'little fella' trying to make a living by running rings around them.

However, this really isn't a question of Robin Hood versus the big guys - and here's why.

Who is the big business?

The first thing to note is that, perhaps paradoxically, it is the counterfeiters who are often the big business here. They can be vast enterprises and they're not Robin Hoods. They're actually selling their fake goods for vast profits and getting fat on the results.

True, they might be getting their items manufactured in appalling sweat-shop conditions in undeveloped areas of the world but the people producing the items for next to nothing won't be seeing much if anything of those huge profits.

Who is suffering damage?

Another myth is that it's only big bona-fide manufacturers who are suffering.

The reality is that the consumer also suffers.

Rarely are counterfeit goods ever even close to the same quality as the originals. They may pass a casual visual inspection but ultimately when they start falling to pieces shortly after purchase it's usually the public that suffers.

So, when you actually start to consider the damage caused by fakes and the battle against them, it's easy to identify victims and none of them are the fakers and criminals.

Destroying value and trust

However, the really big and perhaps most serious impact of faking and counterfeiting arises from the almost irreparable damage it can do to trust and latent value.

Let's consider one perhaps slightly obscure example - that of antiques and specifically Confederate State of America memorabilia.

Over many years the fakers of CSA civil war items have become so proficient that now many people, including some experts, can struggle to be sure of the difference between a genuine and fake item. The result is that the re-sale value of many perfectly genuine CSA items has been massively reduced because many purchasers now can't be sure whether they're buying a real or counterfeit item.

This is tragedy not just in value terms but also historical legacy.

Clearly, modern manufacturers do not wish to see consumer confidence in their brand destroyed by similar considerations and that's why they go into battle against the counterfeiters using the most modern approaches including things such as security holograms and DNA encoding.

Summary

For all the above reasons, it shouldn't be the counterfeiters that get our sympathy.

Ultimately their activities are destructive not only to big business but also the consumer, the small collector, the family that has its heirlooms and so on.

The attempt to beat the fakers is a battle that should concern us all and be one that we not only take seriously but actively cooperate in. if we don't, we may find ourselves in a world where you just won't be able to take any commercial description or branding seriously - and that's a scary thought.