Deceptive and Non-Deceptive Counterfeit Products – A Key Distinction When Selecting Countermeasures

Some consumers look for counterfeit products, whereas food customers usually look for discounted, genuine products. A food customer is often outraged and terrified to find a product that is NOT genuine. However, a customer seeking a counterfeit product would NOT be discouraged by a missing authenticity feature.

Excerpt from the Food Fraud Prevention textbook, Spink, 2019:

Types of Fraudulent Deception: Deceptive Versus Non-Deceptive Product and Primary and Secondary Markets

While it is not usually a debate for food products, generally, product fraud includes deceptive and non-deceptive products:

  • Deceptive Products (counterfeits) are products placed into supply chains with the intent to deceive the consumer into believing that the product is genuine in every way.
  • Non-deceptive Products (counterfeits) are products that do not attempt to deceive the consumer into believing the products are genuine by their positioning in the market, whether through the type of retail outlet in which they are sold (flea market, etc.), the price (exponentially low), or the quality (poor).

In addition to the deceptive and non-deceptive description, another consideration is the type of market, including primary and secondary markets. While there is an academic definition of two extremes, the marketplace includes variations along a continuum.

  • A primary market is authorized resellers for “Consumers who demand goods of genuine, non-infringing origin establish a market referred to in this report as the primary market. For a fraudster to penetrate this market, to maintain the price and continued sales, the product must be able to deceive consumers into thinking they are buying genuine products (deceptive counterfeits).”
  • A secondary market (possibly to the clearly illegal and clandestine black market): “Under certain conditions, consumers are often willing to purchase products they know are not legitimate.” In this situation, the consumers usually understand something is not right or proper about the product, whether it is stolen, counterfeit, or otherwise substandard (non-deceptive counterfeits). “There are other markets in between such as products not sold through authorized resellers, legal diverted product, or other types of ‘gray markets.’”

These classifications of deceptive/ non-deceptive and primary/secondary are important insights when selecting countermeasures:

  • “When selecting countermeasures, it is important to understand the difference and to know whether consumers seek genuine or counterfeit products since this will affect the chosen countermeasures. With deceptive counterfeits, the consumer may not be aware of counterfeit products in the marketplace; increasing awareness through publicity may lead the consumer not to buy the genuine brand or product that would not satisfy the brand owner. With non-deceptive counterfeits, the consumer seeks an illegal product, so identifying a product as ‘fake’ would not deter the sale.”

Thus, it is crucial to understand whether the customer is seeking a counterfeit product or if they are even aware that there may be fraudulent products in the marketplace.

Takeaway Points:

  • There is a massive growth of e-commerce and online sales for food products, which vastly increases the risk from secondary markets.
  • For food products, fraud usually includes deceptive products, whereas consumers often pursue genuine products.
  • For food products, warnings about the prevalence of fraudulent products can often persuade consumers to buy from reputable sources.
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