“Why sure they have”, says the vendor confidently. “You want proof you say? – isn’t my word good enough?”
Believe it or not, your good word is not good enough, and if you are not 100% sure of the certification status of the product you’ve purchased from a manufacturer or distributor, you open yourself up to big risk that is easily avoided. The old saying “An ounce of prevention is worth a pound of cure” is still relevant today.
In terms of brand and identity protection, counterfeit goods are one of the most pervasive problems any product brand can face, and one that can be easily avoided. Counterfeiting is most deteriorating because it’s produced outside a company’s awareness and puts a company’s product(s) at a disadvantage because they have no control over the counterfeit goods being distributed to consumers.
A Global Epidemic
Counterfeit goods exist in virtually every market, including but not limited to electrical components, electronics, auto parts, sporting goods, toys, pharmaceuticals, clothes, shoes, personal care products, food, beverages, movies, and currency. As a world-wide epidemic, counterfeit goods present a serious economic challenge to the global market place.
The International Chamber of Commerce (ICC) estimated that the global value of all counterfeit goods in 2015 would reach an astonishing $1.77 trillion (or about 5 - 7% of world trade), costing the global economy an estimated 2.5 million jobs (750,000 lost jobs in the United States alone).
Beware of the Holidays
Counterfeiting within the electrical industry can occur at any time. It is often seen during seasonal holidays due to the immediate need for specific products and the pressure retailers can put on manufactures to get products into stores and distribution centers on-time. This is a serious issue and one that the general public should be aware of.
This past Christmas we experienced a very serious global safety issue with hover boards and their use of counterfeit safety marks. The hover boards themselves had not been evaluated by a third-party Testing, Inspection, and Certification (TIC) company against an appropriate standard and as such, several homes were destroyed due to faulty power packs and charging units that caught fire.
Christmas lights are another example of a product often counterfeited and sold around the holidays. These products are relatively simple to manufacture and one would think harmless. However, how many news outlets around the world present stories every year where a home was destroyed with faulty lights as the main culprit?
You Can’t Pass the Buck
One could say consumers should be more vigilant in what they purchase. Unfortunately, studies have shown the last thing on the mind of a consumer is the safety of the product they’re purchasing. Most of the time, it is assumed a product has been evaluated for safety because of the high profile location where it was purchased, namely well-known retailers. With high profile litigation cases sensationalizing product failures and the presence of the Consumer Product Safety Commission (CPSC), retailers have established requirements that all relevant products sold must bear the Listing Mark of an OSHA accredited Nationally Recognized Test Laboratory (NRTL). However, retailers aren’t the only ones that need to make sure they’re being responsible and selling products that have been certified. Brokers, wholesalers, and distributors have just as much responsibility to make sure the products they’re selling to retailers have been evaluated and bear a valid Listing Mark.
Ironically enough, I was personally in discussions with an importer who private labels extensively for very well-known retail chains and was bringing-in thousands of hover boards for sale over the Christmas holiday selling season. When asked if the products were listed to a safety standard, they assured me they were and that they were also CE marked. The self-declared CE mark is another story, but nonetheless, they assured me up and down that the hover boards had been evaluated and were safe. Where was their proof you ask? Great question. Nothing in the form of test reports or certificates of conformity were available. You’d be surprised at how much of this goes on and therefore, it comes as no surprise that there are anti-counterfeiting programs and operations with US Customs. However, more help is needed given the size and scope of the regular violations that occur.
Most NRTLs perform market surveillance of their Listing Marks in an effort to combat products that are non-compliant. The TIC industry regularly sees Listing Marks being applied to many different types of products that have never been evaluated or certified. Counterfeiting such as this deteriorates a brand by compromising its position in the marketplace and its associated standard of safety. The Listing Mark is valuable and in most cases, the single greatest point of identity for a NRTL. If more and more counterfeiters knock off a brand – whether it be ours or the next guy’s – it deteriorates the brand’s value whether it’s perceived or actual to the customer.”
What Can You Do?
Fortunately, there are ways to help ensure the products you are purchasing are listed and have the proper Certificates or Declarations of Conformity needed to demonstrate proper compliance. First article / Pre-shipment inspections and/or Quality Audits are a very cost-effective way to ensure what you’re buying is compliant. Prior to products even leaving the manufacturing facility or country, schedule an inspection to safeguard your reputation. Such an investment is invaluable to your future success. Nothing is more frustrating than having a 40’ container you’ve been waiting for to arrive from overseas for more than a month – seized at the entry port by customs because the products have counterfeit certification marks. Think about the repercussions if you’ve already established delivery schedules and made promises to distributors or retailers. The long-term negative consequences can be catastrophic to procurement and supply-chain relationships; all of which could’ve easily been avoided by including a very simple step to your procurement activity with a pre-shipment inspection.
Remember the very simple statement I made in the beginning … But, let’s change it a little and make it more relevant to you, “An ounce of prevention is worth an enormous amount of savings gained from unnecessary expenses, lost sales, and damaged relationships.” Can your organization afford not to prevent?
Key Insights / On the Importance of Brand Identity:
The TUV Rheinland global brand has been around for more than 140 years and has stood for product safety. Having a solid brand reputation associated with product safety and compliance is of the utmost importance because it represents to consumers – of all types of products – that wherever the TUV Rheinland Listing Mark is, the product has been successfully tested, inspected, and certified to meet all the requirements of the appropriate standard(s). Should any NRTL’s mark be counterfeited, industry confidence is lost and the brand’s identity is jeopardized.
For more information about our product testing and certification services, please visit our website or contact us to speak to one of our experts.