Counterfeiting is a form of theft that has been growing steadily in recent years, with an estimated value reaching over $917bn per year from this illegal trade in goods. Counterfeiting has a hugely damaging impact on businesses, the economy, and the population in general. Here are some of the main ways that counterfeiting can harm society, and what brands can do to tackle this issue.
Health and Safety Risks:
Since counterfeit goods are not subject to the regulatory standards and production rules that govern legitimate goods. They can even pose serious health and safety risks depending on the product. For example, counterfeit electronics goods might pose a fire hazard, and in some cases, the consumer might not even be aware that the product that they are using is fake. Businesses in this industry can help to tackle the production and sale of counterfeit goods by using unique serial numbers that can be tracked to determine whether or not a product is genuine. Check out Diagraph to find out more about adding unique serial numbers and codes to your products.
Increased Crime Rates:
While counterfeiting is a criminal activity in itself, it is also often used to support wider criminal acts by providing funds that may be used illegally. Access to more funds from the sale of counterfeit goods will strengthen criminal organizations and can make it more difficult to reduce the damaging impact of criminal activity on society.
Less Public Money:
Businesses pay taxes, which provides essential funding for governments. This is through direct transfers such as income tax and corporation tax, along with the sales tax that is levied on the products that are sold. Sales tax is estimated to make up around seventy to ninety percent of the finances that are lost through non-genuine economic activity. Counterfeit products may not always be sold by businesses that are legally registered and paying sales taxes, which means fewer funds for essential public services like schools, roads, and more.
Economic Damage:
Consumers who purchase counterfeit products knowingly will often do this because the counterfeit versions are available at a much cheaper price. But as a result, legitimate companies are then facing competition from companies that are stealing their intellectual property without paying tax or being compliant with regulatory standards. This has many negative effects on both business and consumers, including job losses and reducing economic growth in general.
Business Reputation Risk:
On the other hand, some consumers might not be aware that they are purchasing a counterfeit product. The problem here is that since counterfeit products do not follow the same manufacturing regulations as legitimate products, this could turn out to be genuinely harmful to the reputation of the business that sells the legitimate products. This is just another reason for brands to ensure that they place unique markers on products to distinguish them from counterfeit copies.
Counterfeiting might not seem like a huge problem at first glance, but the bigger picture shows that it can have a very damaging impact on individuals, businesses, and society in general.
