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eBay Takes a Small Step Toward Fixing the Internet's Huge Counterfeiting Problem

By Daniel B. Kline – Oct 19, 2017 at 7:09AM

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If a deal appears too good to be true, it probably is.

The internet has made it easier to sell counterfeit or fake goods.

In fact, trade in counterfeit and pirated goods has grown from $250 billion annually in 2008 to $461 billion in 2013, according to a 2015 report from the Organization for Economic Co-operation and Development (OECD). In fact, the international organization that promotes economic development estimated that fake goods make up more than 2.5% of all world trade.

That's a stunning number, and law enforcement has struggled to keep up, according to a 2015 Consumer Reports study. Counterfeit goods are a problem that all retailers must face, but companies with open marketplaces, like eBay (EBAY -0.42%) and Amazon (AMZN -0.77%), remain especially vulnerable to them.

"If you can make it, they'll fake it," Bob Barcheisi, president of the International Anti-Counterfeiting Coalition (IACC), told Consumer Reports. The litany of fakes includes "cheap smartphone batteries and chargers that could overheat or catch fire; substandard appliances ... knockoff brand-name prescription drugs like Cialis and Tamiflu, and substandard auto parts."

Amazon has taken its own step to deal with counterfeit goods in its marketplace, specifically working directly with brands through its Brand Registry, a suite of tools that lets companies root out fakes. Now, eBay has taken another step to stop counterfeiting. 

A handbag sits in a box labelled "ebay."

eBay has taken steps to limit counterfeit, high-end handbags and wallets. Image source: eBay.

What is eBay doing?

The online auction and marketplace site has launched eBay Authenticate, "a white glove authentication service designed to help the marketplace's hundreds of millions of active buyers shop with confidence for luxury handbags," according to a press release. eBay sellers can use the service to list luxury handbags and wallets from 12 high-end brands: Balenciaga, Burberry, Celine, Chanel, Christian Dior, Fendi, Goyard, Gucci, Hermes, Louis Vuitton, Prada, and Valentino.

Bags and wallets sold through the service will be verified as being originals. They will be marked with an "Authenticity Verified" label from eBay, which will also offer a 200% money back guarantee in case the items turns out to be a counterfeit. Sellers receive 80% of the sale price for bags and wallets over $500. For a limited time, eBay will also accept handbags value at more than $250, with sellers receiving 90% of the sale price.

"With tens-of-thousands of high-end handbags currently available, eBay is primed to boost customer confidence in selling and shopping for an amazing selection of designer merchandise," said eBay's Vice President of Consumer Selling Laura Chambers.

eBay expects to expand Authenticate into other categories and brands in 2018. In addition, eBay also has another program, Verified Rights Owner (VeRO), which allows rights owners to report counterfeit goods. 

This is a small start

A service like Authenticate brings peace of mind, but it can also drive prices up. Since sellers will be paying 20% of the sale price on pricier items, up from eBay's standard 10% fee, companies may charge more than what the item is truly worth (kind of like when you buy a certified, pre-owned car). 

However, this move allows for shoppers to buy with certainty, albeit in the tiny, niche market of upscale handbags ad wallets. On the rest of eBay, on Amazon, or really anywhere else, it's best to always take a skeptical attitude. If a deal seems too good to be true, it probably is.

Yes, eBay has some fantastic deals, and many of us have a story of stealing an item at auction for a great price. Still, use common sense. If a $1,200 bag is being sold at 90% off in a "Buy it Now," deal and the seller has more than one listed, well, warnings bells should be going off.

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and eBay. The Motley Fool has a disclosure policy.

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Stocks Mentioned

eBay Stock Quote
$45.04 (-0.42%) $0.19
Amazon Stock Quote
$93.41 (-0.77%) $0.72
Burberry Group plc Stock Quote
Burberry Group plc
$25.00 (9.26%) $2.12
Herm�s International Soci�t� en commandite par actions Stock Quote
Herm�s International Soci�t� en commandite par actions
$1,543.25 (0.57%) $8.75

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