Avoiding the gray-market grinch this Christmas

These fake jeans for sale in a street market in Thailand show the spreadsheet code (=if(Label="","RMA","?") that the factory uses to determine which fake brand label to add -- only this label shows the code instead of the "correct" brand name. If only all fakes were this easy to spot!

First off, let me say that what I am posting here is largely a blatant rip-off from my friend and former business partner Te Smith, and her company Mark Monitor.  Mark Monitor is the global leader in helping big brands track and stop the gray-market and counterfeit goods who steal millions in revenue that could keep people working, or ruin a reputation that took generations to build.

Everybody understands counterfeit goods.  We sometimes make ourselves feel better by calling them “knock-off” or “faux” designer brands, but deep inside we understand that even though a purse has a distinctive print on it, or a scarf looks like a famous plaid, it isn’t likely to be a designer original if we bought it from a street vendor.

A lot of us don’t know what the gray market is, though.  And it’s the gray market that causes people the most trouble at Christmas time.  BusinessDictionary.com defines “gray market” as, “Genuine branded goods (called ‘gray goods’) sold outside of an authorized sales-territory (or by non-authorized dealers in an authorized territory) at prices lower than being charged by authorized dealers.”

Some of you are saying, “So?  What’s the problem?  Lower prices are great at Christmas time.”  I like saving money as much as the next person (and I happen to know that my friend Te can spot a pair of discounted designer shoes from a city block away).  But I absolutely hate paying for something that comes without a warranty, no factory service, and no quality guarantee.

There are a lot of iPads, iPods, Blu-Ray players, digital cameras and other gray market electronics for sale on the Internet — and even more Kate Spade, Coach, and Marc Jacobs handbags and fashion accessories that have no more relationship to those brands than the duct-tape wallet my grandson made in arts & crafts at camp last summer.  You don’t have to be buying an expensive item to run into a fake — there are fake sneakers, jeans, perfume, DVD’s and CD’s and other fake goods at every price point.

Some fake product show up in street markets and resale shops, but online sales account for the bulk of it.  Some sites, like eBay, do their best to police sellers so that only genuine used or licensed goods are sold.  (Note that I say “they try”, because they don’t always succeed.)

The gray-market Grinch isn’t always stupid.  (And sometimes he is.) Most of the people I know who’ve been victimized by these scammers bought something that they thought was a new, legitimate product only to find out that it was a refurbished or returned item with known defects and no warranty.

Make no mistake:  if you buy a discounted iPad from anyone other than an authorized Apple dealer, Apple won’t fix it, exchange it, or even let one of their “genius-bar” employees help you learn how to use it.

That’s my personal gray-market nightmare:  explaining to one of my grandkids that I saved money by buying the hot new gadget they wanted, only now I can’t get it to work, and no one will repair it.  (Or worse, paying the credit card bill for a worthless item I thought was a bargain!)

The gray market also includes stolen merchandise and factory seconds.  (I don’t mind buying factory seconds in some products — as long as I know what I’m buying.  But I wouldn’t give a factory second as a gift, would you?)

Te says that in a study her company conducted on popular search terms for holiday gifts, 17% of the searches led to sites offering suspected counterfeit and pirated goods. “By adding a term like ‘cheap’ or ‘discount’ in front of a product name or category, the number dramatically increased – almost  50% of paid search ads for those phrases linked to suspicious sites,”  she added.

So how can you spot bargains that aren’t?  Mark Monitor offers these tips:

  1. Prices that are too good to be true are always a tip-off.  There are plenty of sites selling fake high-end purses at 10-20% of full retail but some counterfeiters are getting smarter and selling their goods at 40-60% of full retail – in other words, the type of discount that you might see at a big holiday blow-out sale.  It’s important to check out the site — not just the photo and description of the purse.
  2. When examining a site to determine whether it is legit, look at the ‘About’ or ‘Company’ page. Counterfeiters lavish a lot of care on the product pages, picking up descriptions and photos from legitimate sources, but they sometimes skimp on the company pages.  Does the ‘About’ or ‘Company’ page seem professional – well-written copy, no spelling or grammatical mistakes, clear and up-to-date info.   Does the site provide a physical address or phone number?  Check the number and see how professional the customer service reps are when answering your questions.
  3. What about shipping and return policies?  Privacy policies? Legitimate sites will take the time to craft well thought out policies that follow best practices and spell out the particulars clearly.  Not only will you be able to make a fully-informed decision on the total cost of the purchase, but you’ll get important clues on the legitimacy of the site – and the goods.
  4. Is there an FAQ (Frequently Asked Questions) link on the site?  Again, this is an area where many sites peddling fakes will skimp.  Some of them, though, will specify that they are selling ‘replica’ goods or ‘homage’ goods, a sure sign of fakes. 

Listen to my friend, and the lyrics of  one of Kameron’s favorite Christmas song: “You’re a monster, Mister Grinch… I wouldn’t touch you with a thirty-nine-and-a-half foot pole!” 

Photo credit:  This photo taken in Chatuchak market, Krung Thep, Thailand. (Bangkok) was offered on Flickr under a Creative Commons License. 

About debmcalister

I'm a Dallas-based marketing consultant and writer, who specializes in helping start-up technology companies grow. I write (books, articles, and blogs) about marketing, technology, and social media. This blog is about all of those -- and the funny ways in which they interesect with everyday life. It's also the place where I publish general articles on topics that interest me -- including commentary about the acting and film communities, since I have both a son and grandson who are performers.
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2 Responses to Avoiding the gray-market grinch this Christmas

  1. Serena Daley says:

    This blog was… how do I say it? Relevant!! Finally I’ve found something which helped me. Appreciate it!

  2. Human Rights says:

    Hi there! This blog post couldn’t be written any better! Looking at this post reminds me of my previous roommate! He constantly kept talking about this. I most certainly will send this post to him. Pretty sure he’ll have a good read.
    Thank you for sharing!

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