December 15, 2004
For some, buying fake designer duds in a no-brainer,
but does going cheap end up costing you the most?
This season's "it" bag, a $900 leather tote from designer Luella, is way out of reach for most women. But no worries. Now that the purse is stocked at Neiman Marcus, carried on the shoulders of celebrities and plastered across fashion magazines, the next best thing is available just down the street: a cheap fake.
Say the magic words at Sav-a-Lot, a Lincoln Park drugstore, and a salesclerk will open up a back room lined to the ceiling with shelves of counterfeit handbags, brand labels and logos stamped right on. Here customers can buy a knock-off Luella, Prada, Fendi, Louis Vuitton, Marc Jacobs or Kate Spade for $25 to $160, a pittance compared to the authentic versions' retail prices.
A Sav-a-Lot manager denied that the store carries the handbags but last week a RedEye reporter viewed the entire stock. On Tuesday, a salesclerk said that access to the stockroom had been limited to evenings and weekends.
Illegal? For sellers, yes. For buyers, no. Trafficking fake products is a federal crime, but forking over cash for a good deal is fine.
"Everybody above the consumer can be caught in the web," said Tim Trainer, president of the International Anti-Counterfeiting Coalition. That means those who produce, distribute or sell the goods may be criminally liable for violating copyright, patent or trademark laws, but the customer is off the hook.
And not all consumers know they're getting a fake product, said Michael G. Kessler, president and CEO of Kessler International, a leading corporate investigation firm with offices all over the country, including Chicago, that helps manufacturers track down the source of counterfeit merchandise.
While finding a Rolex for $50 (instead of $5,000) is probably a good tip-off that it's a fake, some counterfeit products are sold in legitimate outlets or mixed in with the real thing.
Luxury goods such as handbags, watches, perfume and electronics make up more than two-thirds of the multi-billion-dollar counterfeit market. Investigators aren't terribly interested in the frontline sellers unless it can lead them further up the criminal food chain to the illegal distributors and manufacturers, Kessler said.
Police and other local authorities keep watch, but because most counterfeit goods are imported and the crime is not a high national priority, most of the investigation footwork falls to federal authorities and privately hired detectives.
There is no specific Chicago Police team designated to counterfeit goods, but in the last 10 years officers have seized millions of dollars worth of fake products off the streets, Lt. Gerold Swarbrick said.
"It's an addiction," Kessler said of the street-level vendors and storefronts. "These guys can make so much money, they're willing to take a risk because they're not going to be charged criminally nine times out of 10, and even then, probably not convicted."
Women aren't the only ones snapping up faux fashion--guys have their pick of knockoffs too.
Mitchell and Ness, the primary manufacturer of vintage sports jerseys, reportedly shuts down 150 to 200 eBay auctions of fake product daily. The jerseys normally retail for $200 and up, but knockoffs--with the brand label sewn on--are available for less than $20.
For luxury designers, lost revenue isn't the big issue. They're more concerned that counterfeit merchandise may diminish the prestige of their products. Why would Cameron Diaz carry it if it's available everywhere for cheap?
That doesn't bother Mia Crawford, 32, of Lincoln Park, who owns a couple of real Prada items and a Louis Vuitton.
"There's a market for every person," she says. "If someone likes the look, but can't afford a $200 makeup bag, why shouldn't they be able to buy it for $15?"
Lindsay Anthony's pink and purple $130 Coach handbag was a gift, but she says a knock-off would be fine too--Anthony, 23, of Lakeview, can't tell the difference.
"Why pay the whole price if you can find something cheaper that looks the same?"
On a stretch of Clark Street, just south of Wilson, a handful of wholesale stores sell "lookalikes," not exact copies, which is an important, if blurry, distinction.
Lookalikes toe the line of violating copyrights or trademarks, experts explain, but it's up to the court to decide the degree. Counterfeiters might switch the letters, labeling it "Kade Spate" or "Ralex," or leave off the label entirely in hopes of sidestepping the law.
At the Clark Street stores, products such as a Coach-like bag stamped with Gs, instead of C's, or a Chanel-style quilted purse minus the identifiable logo sell for $15 to $25. There's even a knockoff of Luella's "it" tote sporting the trademark heart-shaped tassels, but without the brand stamped into the leather. Much of the merchandise is imported from China and Korea.
"What we're trying to do is make a living. We're not selling anything illegal," said one shop owner, who asked not to be identified because he said it would hurt his business.
"Some designs may be teetering off of borrowing off of something, but it's not an intellectual property issue," he said. "I have nothing to hide."
Copying an original idea isn't a crime--that's how the fashion industry works. Versace sends a design down the runway, mid-level designers mass produce a version and finally a similar look pops up in Target.
But there's a limit. Luxury designers and manufacturers have tried to crack down on the illegal exploitation of their brands--developing internal anti-counterfeit teams, adding covert coding to products, hiring private investigators and working with U.S. customs--however the stream of goods, primarily from China, has grown.
Most major cities such as Chicago have developed a market for fake luxury goods.
"The Midwest isn't as bad as the two coasts," says Kessler, "but a lot of times it becomes a dumping ground for products that can't be sold elsewhere."
And anyone interested in fake Louis Vuitton duffel can just troll the Internet. Some people host illegal "purse parties," a Tupperware-style traveling sales show held in a hotel room or private home.
Meanwhile the counterfeiters are getting even better at their work, adding design details that make it difficult to tell the real from the fake item and using technology to reproduce the packaging exactly.
Where does your money go?
Authorities urge consumers to do some hard thinking before they purchase a fake. Even though counterfeiting may appear to be a harmless, victim-less crime, they say--something only the manufacturers need to worry about--it's not.
There's no quality control, Chicago Police Lieutenant Gerold Swarbrick said. In knockoff sunglasses, the glass often isn't shatter-proof and doesn't provide UV protection. Clothes aren't manufactured to standards.
Besides other dangers such as counterfeit drugs or foods, investigators have linked money from counterfeit activity to the drug trade, human trafficking and terrorist activities.
"Certainly with vendors on the street, I wish people would stop and say, 'Where is my money going?' " said Tim Trainer, who heads an anti-counterfeiting coalition. "If a person is selling a product outside the mainstream economy you have to ask who is using this money."