Will Counterfeit Product Concerns Doom The Resale Market?

  • October 30, 2019 at 2:47 PM EDT
  • By Retail TouchPoints Team
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While resale is clearly thriving, with the market expected to generate $51 billion in revenue by 2023, its growth could slow if consumer concerns about product authenticity mushroom. Suspicions that some secondhand products bought on resale sites are counterfeit include an allegation that the authentication process conducted by The RealReal isn’t as in-depth as the company makes it appear. Questions about how seriously resale retailers are about taking the time to authenticate the products they sell could tarnish the entire sector.

The RTP editors discuss whether the resale market is in danger if consumers mistrust the authentication process and buy fakes (or worry that they are doing so). Additionally, the team discusses the steps retailers should take if they move into resale.

Adam Blair, Editor: The problem of fake goods being passed off as the real thing isn’t a new one. In the 1961 Broadway musical How To Succeed In Business Without Really Trying, the heroine sings about showing up at a party in a slinky, irresistible “Paris original” dress. But her joy turns to anger, disgust and despair when every woman at the party shows up in the very same, supposedly “original” dress. (Here’s audio from the 2011 revival; please forgive the retro, Mad Men-era attitudes in the Frank Loesser lyrics.) I agree with Forbes contributor Richard Kestenbaum that today’s issues, exacerbated by the volume demands of resale sites like The RealReal, won’t improve unless the brands themselves, and the consumers being scammed, raise a stink. Obviously, retailers should do all they can to ensure they are selling the genuine article, and to be transparent about their efforts to weed out counterfeits. Still, I wonder if people shopping resale sites have, consciously or unconsciously, incorporated the possibility that the items they’re buying are not “Paris originals” into their purchase calculus. For these shoppers, ignorance may be bliss.

Glenn Taylor, Senior Editor: The calamity related to the counterfeiting news was an inevitable byproduct of resale’s massive growth; any time you’re not buying from the initial source, you’re taking that risk, whether you’re willing to admit it or not. I don’t know if Rebag intentionally made the decision to launch the Clair handbag appraisal index in reaction to counterfeiting concerns, but it appears the company is at least trying to build greater transparency so luxury shoppers can buy or sell a product with more confidence. I think a company like Rebag would have more to lose here by putting together an inaccurate or disingenuous price generator than by selling a fake handbag, because the price number is the one thing a consumer will need to trust right off the bat. Breaking that trust would cause much more damage over the long run: while a counterfeit item may have slight cosmetic differences, a disputed price immediately brings the word “scam” to mind. Retailers are going to have to be creative in order to create that sense of transparency for consumers, especially if they don’t have a 100% guarantee that the item they’re selling is directly from the source.

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Bryan Wassel, Associate Editor: Counterfeits, at least luxury ones, straddle a strange line in my experience. Growing up, my mother was very proud of the collection of counterfeit bags she’d gathered from various New York street vendors. She always said they were identical unless you looked closely, and since her friends knew the bags were fake (she wanted to impress them with the deals she found, not the authenticity of the items), no one in a position to notice was likely to care. She was still able to present herself to the world at large as a woman who carried her things in Gucci and Dior bags. I feel many resale shoppers may feel similarly — that it’s about expression, not quality — and this factor might keep them from looking too closely at their purchases. Of course, retailers still need to take proper steps to avoid a costly hit to their reputation, but I think a certain level of “inauthenticity” will be allowed if efforts are being made and the price is right.

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