BrainTrust Query: Fake Products Provide More Than Headaches for Consumers and Independent Retailers

Dec 23, 2009

Commentary by Doron
, president, Captus Business Consulting

on the CBS Early Show on December 18th
about the danger of fake goods, especially in the seasonal and electronics
categories. The report talks about the danger of selling uncertified electronic
items such as extension cords and Christmas lights.

In true exposé style, Susan Koeppen tags along with Maryland Fire
Marshals to see if retailers carry these goods. Their first three stops netted
goods with no or fake certification labels. The merchants that made it on camera
complied with authorities and took down the sub-standard merchandise without
incident. Ms. Koeppen ends her report suggesting that consumers can protect
themselves by shopping at well known retailers and avoiding small mom and pop
shops. Small merchants should take note of this as there are an ongoing quality
issues with discount products made in China and elsewhere in the Asian

So whose fault
is this? Who is responsible for selling products that can turn your home
into a horrific fireball? Independent discounters and dollar stores purchase
their inventory from distributors that source their products from other
distributors overseas. Unfortunately for merchants, there is little support
and training. Retailers are on their own when it comes to purchasing these
types of electronic goods from this type of distribution channel.

Does anyone
remember the great lead crayon scare dollar stores were contending with
in the mid 90’s? Certain lines of crayons contained unacceptable amounts
of lead and a recall was announced by federal agencies. Distributors and
wholesalers washed their hands of the issue and left merchants to deal
with this massive recall. Owners (some with huge language barriers) struggled
to understand what was happening and what had to be done. I was working
for a regional franchise in the San Diego area at the time. I can remember
drafting a memo and having it translated into four different languages.
A quick call to some of my clients revealed most didn’t know what or who
Underwriter’s Laboratory was.

merchants are at a huge disadvantage when it comes to purchasing inventory.
While big box can enjoy dealing with vendors directly, most independent
merchants are acquiring inventory through distributors who do not provide
the necessary training and support to their clients. This increases the
chance of fake and sub-standard merchandise making it on the shelf. Retailers
are not without responsibility though and must do a better job of understanding
the products they carry.

Questions: Are independent retailers at a huge disadvantage when it comes
to assuring their inventory isn’t counterfeit or sub-standard? What steps
could they be taking to assure the public of the quality of their merchandise?
Should government agencies or even wholesalers and distributors provide
more resources and training to independent merchants?

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6 Comments on "BrainTrust Query: Fake Products Provide More Than Headaches for Consumers and Independent Retailers"

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David Livingston
11 years 4 months ago

Retailers and consumers know what they are getting into when they buy counterfeit products. That computer from the dollar store or the purse from the street vendor, most people are not so stupid to think they are real. Most retailers and consumers are educated enough that they don’t need protection from big brother. And if they do get burned, it’s a good education.

Bob Phibbs
11 years 4 months ago

Caveat emptor–buyer beware. The merchants who buy the “too low to be true” are to blame for supporting this shoddy enterprise. You get what you pay for–if we got off the fixation on price in our messages to consumers, perhaps they would pay more critical attention to what was left out than how much it cost.

Gene Detroyer
11 years 4 months ago

It is a bit outrageous when the newsperson suggests that shoppers avoid mom & pop retailers. Let’s damn all hardworking, independent retailers because there is a systemic problem with a supply chain. The biggest companies and retailers have accepted and sold products that did not meet safety standards.

While all should be aware, the responsibility goes to those who import the products and the customs facilities that inspect and regulate. Anyone who has been involved in importing (legitimate items) knows that customs inspections can be grueling. When going through these bureaucratic inspections, one wonders how any illegal drugs or illegitimate items ever get past the border.

But be realistic. Electrical products that might cause fires should go through the same scrutiny that imported drugs go through. A purse, even though it may be a fake, should not demand the same resources for scrutiny.

Roger Saunders
11 years 4 months ago

PT Barnum may have been right in his assessment that “There’s a sucker born every minute.” However, no one sets out to be duped. And, when the consumer is duped by a retailer–national chain or independent–they seldom forgive, and they never forget.

Honesty and integrity is what the consumer is seeking and expects at retail. Give it to them in that manner, and you keep them for a lifetime.

Kai Clarke
11 years 4 months ago

Caveat Emptor has always been a phrase emphasized in American Business! Here is no different. Small retailer, large retailer…they all have issues with products meeting certifications or offering a true representation of a specific product. This has not changed and will not change until consumers continue to demand strong suppliers, strong retailers, and verifiable offerings on all levels of the retail trade.

Marshall Kay
Marshall Kay
11 years 4 months ago

I realize that I may be exposing myself to a charge of touting RFID as the answer to all the world’s problems–or at least all retail problems–but one of RFID’s many applications is the authentication of merchandise.


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