If What You Are Buying Is Counterfeit, It Isn’t a Good Deal

Counterfeiting is a conundrum for manufacturers, retailers, and consumers.

Colorful handbags and purses in a shop
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In fiction, evil twins and parallel universes pop up all the time. In real life, the equivalent is counterfeit goods.

Everyone knows money can be counterfeited, and savvy adults understand that a super-cheap Gucci purse sold at a flea market is likely a fake. But these days, almost any purchase can be counterfeit. If you aren't careful, you can buy counterfeit computer products, electronics, furniture, auto parts, toys, shoes, cigarettes, exercise equipment, batteries, sunglasses, and, as the TV ads say, much, much more.

It's a conundrum for manufacturers, retailers, and consumers. Last year, U.S. Customs and Border Protection kept $1.26 billion of counterfeit merchandise from getting into American borders, but it's likely that a healthy portion of counterfeit goods made it into the country anyway. After all, a 2007 report from the Organization for Economic Cooperation and Development estimated that $250 billion worth of counterfeit goods were crisscrossing global borders, while the International Chamber of Commerce's estimate around the same time was closer to $650 billion. By 2015, the chamber says $1.7 trillion in counterfeit goods will have infiltrated international markets.

The good news is that it's still relatively easy to be a frequent shopper and never purchase counterfeit products. But it depends where you're shopping. The big, name-brand stores are still generally safe, although even they can be taken in. In 2006, Wal-Mart was sued by Fendi for selling counterfeit handbags and wallets in its Sam's Club warehouse stores (Wal-Mart ended up settling). Two years ago, a federal jury found Costco guilty of selling counterfeit flat hairstyling irons made by Farouk Systems, Inc. And on Valentine's Day of this year, Tiffany & Co. launched a lawsuit against Costco, accusing the chain of selling counterfeit Tiffany diamond rings.

[Read: Confessions of Former Shopaholics.]

So where else are counterfeit goods showing up? As noted, everywhere, but here are some places to be aware of:

In your kitchen. Scary to contemplate, but counterfeit food is beginning to become a problem. In January, the U.S. Pharmacopeial Convention, a nonprofit with the mission of improving the world public's health, put out a warning that food fraud has shot up 60 percent in the past year.

Typically, it's the ingredients in food products that are counterfeited. That means a perfectly respected brand, if its supply chain isn't up to snuff, might unknowingly produce an inferior product.

"Companies have processes and controls where they're testing and making sure the ingredients are up to par, but in some cases, some of these companies have obviously had a breach in their system," says Gregory Thomas, a Chicago-based supply management executive at BravoSolution, which manages sourcing strategies for food and consumer packaged goods. He says a breach in a supply chain may explain how in January, tests conducted by the Food Safety Authority of Ireland discovered traces of horsemeat in a supplier to major retailers and restaurants, including Burger King, in Britain and Ireland.

Food counterfeiting can also occur when an inferior food product is slapped with the label of a trusted brand. Last year, in Dover, N.J., authorities discovered a warehouse filled with hundreds of crates of fake Heinz ketchup. The ketchup was real enough, or appeared to be, but it wasn't made by Heinz.

Michigan State University has an Anti-Counterfeiting and Product Protection Program as well as a national database for tracking counterfeit food. Its list of foods most likely to be counterfeit include vanilla extra, maple syrup, grape wine, apple juice, coffee, orange juice, honey, milk, and olive oil.

To be clear, there's no reason you shouldn't trust what you're buying in your grocery store. But if you're purchasing food at an outlet you don't know well, and if an item is priced unbelievably cheap—especially on the aforementioned food items—that might be a tip-off that something smells funny, even if the food itself smells fine.