7 On Your Side: Counterfeit goods end up on store shelves

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Friday, May 15, 2015
Counterfeit goods end up on store shelves
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7 On Your Side looks into how counterfeit goods end up on shelves of legitimate retail stores.

SAN FRANCISCO (KGO) -- The counterfeit product industry is estimated to be a $1.7 trillion criminal enterprise. Experts warn that money supports organized crime, child labor and terrorism.

Counterfeit goods are ending up on legitimate store shelves, so you could buy one and not even know it.

Experts are finding counterfeit products in more places than ever.

"They'll show up in major retailers. It will show up online when you're buying through marketplaces like eBay and Amazon, or even sometimes small neighborhood shops," Dave Tognotti said.

Tognotti is the Chief Operating Officer of Monster Headphones headquartered in Brisbane. He says they've seen cases where major retailers are getting counterfeit Monster products returned to them.

"And in some of those stores they actually put the product back on the shelves," Tognotti said.

7 On Your Side wanted to see how that happens, so we ordered a women's Denali North Face jacket on the Chinese website AliExpress for $33.

The description called it just a Denali jacket, but the pictures looked just like the North Face Denali jackets. The jacket arrived and had the North Face logo, tag with a UPC code and a retail price of $169.

7 On Your Side took it to the North Face outlet in Berkeley. Immediately, the sales person suspected something.

"Did you wash this at all?" she said. She called over her supervisor. "Honestly, this doesn't even look like a real North Face jacket, this looks like a fake one," the salesperson said.

They wouldn't return it without a receipt. The supervisor said the associates are well trained to look out for fakes. She said the logo, zipper ties and material were all different than the real jackets.

7 On Your Side then headed to the North Face store on Post Street in San Francisco and walked in with no receipt, just the jacket.

"This one was not purchased in our store. We can give you store credit if you like," the sales associate said. "Whatever the computer says is what I can give you."

She then punched the UPC code on the tag into the cash register. "It's ringing at $124," the sales associate said. The sales associate apologized she couldn't give the full $169. Accepting the money would be illegal, so 7 On Your Side stopped there.

Craig Crosby runs The Counterfeit Report, a watchdog organization for counterfeit products. He did this same thing in Southern California at the North Face store.

"They actually offered to exchange the item and told us it would go back on the shelf as an item available for retail sale," Crosby said.

7 On Your Side contacted the North Face, but the store never responded.

"The retail employee, really their obligation is to keep the customer happy, so it's always a challenge to confront a customer if you believe the product is a counterfeit," Crosby said.

Monster now requires all returns to be sent back to Monster headquarters.

"We inspect them very closely and if anything has been opened, or anything has been used, or anything is counterfeit, we shred it," Tognotti said.

Other retailers recognize returns are a problem.

"I understand from Macy's that they are no longer placing any returned cosmetic or fragrance back on the shelf," Crosby said.

Buying directly from the retailer is still the best way to ensure a product's authenticity. Also, if there's a problem, take the product back for a refund.

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