The problem of counterfeit merchandise persists, and a Red Points report, “The Counterfeit Buyer Teardown,” shows that the challenges posed by fake products, especially online, are becoming even more difficult with the growth of e-commerce and the influence of advancing technology.
The counterfeit problem remains acute. Red Points, an AI brand protection platform, announced that in 2024 it detected 4.3 million counterfeit and dupe infringements for its clients, marking a 15% year-over-year increase and demonstrating that fraudsters are pressing even harder to fool consumers.
Daniel Shapiro, Red Points’ senior vice president of brand relationships and strategic partnerships, noted that today, globally, there are about 4.9 billion unique product listings on Amazon and 2.38 billion on eBay, with a large proportion of listings updated and a huge volume of new listings posted every day.
“Finding that needle in the haystack — identifying the bad listings among the authentic ones — is one of the biggest challenges brands face today,” Shapiro said.
When it comes to marketplaces, Amazon and other online retailers take measures to yank counterfeit goods and listings dedicated to selling them on their platforms. However, brands are often the players in the e-commerce world that must police counterfeiters most vigilantly. Shapiro pointed out that retailers aren’t necessarily aware initially whether a branded product appearing on their marketplace sites is authentic, and can’t act until a fake is confirmed, usually by the brand’s owner. Detection is becoming harder to achieve given the Internet’s global scope and product density, as well as the technical expertise that bad actors have developed.
Finding that needle in the haystack — identifying the bad listings among the authentic ones — is one of the biggest challenges brands face today.
– Daniel Shapiro, Red Points Senior Vice President,
Brand Relationships and Strategic Partnerships
Even though e-tailers today have programs to help them detect counterfeits, such as the Amazon Brand Registry, that doesn’t mean all sellers sign on, and even if they do, fraudsters are constantly developing ways to elude systems designed to thwart them. Even after being found out and delisted, counterfeiters are adept at getting themselves right back on platforms that have shut them down, so the policing process becomes cyclical, with fraudsters having products pulled down but then returning under a new identity.
To make things more troublesome, AI has made it easier for bad actors to mimic brand listings on marketplaces and elsewhere, as they can also impersonate social media accounts and launch fake websites, which projections indicate could grow 70% year-over-year in 2025. The challenge is complex.
Many consumers who go out and look for counterfeits, as related by Red Points, use AI tools to assist in their searches, a trend led by GenX, with 37% doing so, and one that is gaining momentum across age groups.
The Red Points report, based on a survey conducted with market research firm OnePoll in February 2025, demonstrated that fraudsters hawking fake merchandise are widely active and using any vehicle they can to put phony goods in front of consumers. In one example, Red Points charted a 179% growth in fake ads rolling out from 2023 to 2024.
Red Points refers to consumers who purchase fake goods as the “Silent Sufferers” and the “Counterfeit Seekers,” Shapiro said. The “Silent Sufferers” purchase products that appear authentic to them frequently at a price that is at a discount to the real thing, but one that seems reasonable rather than too good to be true. Only afterward do they discover or at least suspect they bought a fake. “Counterfeit Seekers” are content to get a phony product that is reasonably similar in appearance and quality to an authentic item if the price break is enough.
The Red Points report includes input from 2,000 U.S. consumers who purchased counterfeit goods in the past two years, as well as insights from more than 1,000 brands that actively fight counterfeiting. The study doesn’t, by necessity, include consumers who never realized they had purchased a fake item. As such, even the concerning results included in the report only identify part of the problem.
Red Points refers to consumers who purchase fake goods as the “Silent Sufferers” and the “Counterfeit Seekers,” Shapiro said. The “Silent Sufferers” purchase products that appear authentic to them frequently at a price that is at a discount to the real thing, but one that seems reasonable rather than too good to be true. Only afterward do they discover or at least suspect they bought a fake. “Counterfeit Seekers” are content to get a phony product that is reasonably similar in appearance and quality to an authentic item if the price break is enough.
Accidents do happen in the scope of e-commerce today, given greater counterfeiter technical and operational sophistication. Consumers can be easily duped. Indeed, avoiding counterfeits can be tricky when seeking the best price for legitimate goods. Although consumers might realize they face the risk of counterfeit, their ability to distinguish between real and fake is limited, and distinguishing has become more difficult as fraudsters refine their expertise.
Bad actors have even become retail experts to the extent that, just like store operators, they gear up for the buying seasons throughout the calendar year.
“October through January is our biggest cycle because consumers are out buying presents,” Red Points’ Shapiro said. “Counterfeits exist year-round, but we consistently see a sharp increase during the holiday season.”
Still, the Red Points study notes 46% of consumers surveyed bought fakes unintentionally, 39% acquired them intentionally, and 15% purchased fakes on purpose and by accident. The lure of counterfeits, whether purchased unintentionally or intentionally, is the prices that are typically 31% to 38% less expensive than those charged by legitimate retailers. Red Points emphasizes that unintentional and intentional counterfeit purchasers differ in their motivations, behaviors, and exposure to risk factors involved with fakes.
Getting Fooled
Counterfeiters often lure consumers who don’t have any desire to purchase phony items by offering bargains so deep as to make them tempting or, increasingly, well-crafted enough in the depth of discount to seem legitimate. Fraudsters have gotten better at making their offers seem legitimate. Deceptive listings, misleading product descriptions and astute scam tactics are all means used by counterfeiters to cheat consumers. Unintentional purchasers of counterfeit goods were most likely to report being duped in a fashion purchase, at 52%. Homewares trails significantly at 19%.
Counterfeiters have a significant motivation not only to get involved in selling fakes but also to keep on doing so. Shapiro noted that the traffic in counterfeit goods can generate profits as lucrative as those of illicit drugs, and the penalties are much less for product counterfeiters than for narcotics dealers. So, the incentive to produce and sell counterfeit products is potent.
Not only can consumers get duped, but legitimate retailers often lose sales and credibility because a substantial proportion of consumers will stop buying a label out of anger or fear after accidentally receiving a counterfeit.
On average, according to the Red Points report, 28% of digital shoppers said they wouldn’t purchase from the authentic brand in the future after accidentally buying a fake, suggesting a significant proportion of consumers expect brands to ensure shoppers won’t unknowingly buy counterfeits.
The highest post-fraud refusal to buy a brand is in the luxury category, with 32% of shoppers saying they stopped purchasing online in that category after receiving a fake instead of what they intended to buy. One in four victimized shoppers participating in the Red Points study unintentionally bought a fake luxury brand.
When it comes to where luxury item purchases occur, American marketplaces lead at 54%, followed by Chinese marketplaces at 44% and social media platforms at 36%.
Retailers also may penalize brands they feel are not doing enough to protect them from counterfeit goods. Under the circumstances, Shapiro said, brands that are counterfeited are in a bind, as retailers often hold them responsible for the proliferation of fakes.
“Retailers often ask, ‘Why should I stock your product if you’re not protecting it?’” Shapiro said. “It’s a fair question when unauthorized sellers undercut legitimate pricing with counterfeit products.”
Trust is an issue when it becomes harder to tell what’s fake and what’s legitimate. In the Red Points survey, 58% of respondents who had unintentionally purchased a fake product said they trusted a seller or website because of legitimacy cues, such as a professional design featuring official-looking product images and descriptions. Meanwhile, 51% did so because they regarded the prices offered as reasonable, and 39% purchased based on the promise of secure payment through services such as PayPal. To continue winning sales, counterfeiters have learned what makes them seem legitimate to consumers and have developed ways to fake that, too.
Even though online retailers have made moves to counter fraudsters, bad actors continue to plague them, particularly in marketplace operations. Almost half of consumers who reported accidentally buying fakes did so from a marketplace operated by a U.S.-based company. Social media was the channel of engagement for 49% of consumers who accidentally bought counterfeit products, while 48% encountered fake merchandise through a search engine. In an interesting development, AI recommendations linked 26% of consumers to counterfeit products.
After accidentally purchasing a phony item, 45% of marketplace users received a lower-quality product than expected, while 41% of website buyers did the same. Overall, 28% of consumers never received the products they purchased, according to the Red Points report.
Not all consumers suffer quietly when receiving counterfeit products. Some 48% of survey respondents left reviews about what happened, 42% alerted the platform involved and 30% reported the fake to the brand victimized. In that case, brands not only lose a specific sale but also face a diminishment of the brand if what was exclusive and unique becomes counterfeited and common, Shapiro said. After accidentally purchasing a fake product, 32% of consumers said they stopped buying from a luxury or toy brand, the categories that saw the highest negative reaction to buying counterfeit items. When it comes to housewares and home decor, 27% of consumers said they stopped buying from a brand in the category after getting phony merchandise.
With AI making it easier to create fraudulent e-commerce websites, 30% of unintentional buyers have fallen victim to them. Counterfeiters use AI tools to quickly build professional-looking sites, rotate product listings and even incorporate features like personalized recommendations and chat support. As such, the kind of poor design, odd language, and lack of ancillary features such as product reviews that once made fake websites obvious is being replaced by more convincing platforms that are harder for shoppers to spot.
From 2022 to 2024, standalone website infringements across the Red Points client base jumped by 59%, and the trend is accelerating. The company projects a further 70% increase by the end of 2025.
The counterfeit price pitch, meanwhile, keeps getting more subtle and effective. Rather than suspiciously considerable savings, fraudsters have focused on ranges within reasonable expectations. For counterfeit homewares, according to the report, the typical discount is 38%, tied with electronics for the deepest average discount.
As AI becomes more prominent, counterfeiters’ ability to reach consumers is enhanced, as they cannot only use technology to make their offerings appear more credible but also target consumers most susceptible to a particular price proposition.
Shapiro said Red Points is using AI to detect and eliminate counterfeits online, but he stressed that the task is enormous and requires the most up-to-date systems and procedures available.
“Today, we’re processing between 80 and 90 million listings a day on behalf of clients,” he said. “You can’t do that with human capital. Maybe years ago you could have, but the size of e-commerce, the size of the challenge, if you don’t deploy some high level of technology and AI, you can’t help people.”
The ability to effectively police counterfeits is beyond the capabilities of many brands, even in the case of marketplaces. As such, third-party protection companies such as Red Points have become more prominent. Red Points works on three to four hundred marketplaces globally at a time, applying dedicated technology to the problem.
In the Know
Although many consumers continue to purchase fake products unintentionally, not everyone is deceived. As noted, 39% of counterfeit shoppers knowingly purchased counterfeit products, and an additional 15% had both intentional and accidental experiences with counterfeit products.
Motivated by the desire to save money, intentional fake purchasers prioritize value and aesthetics over authenticity, Red Points asserted. Fashion at 56%, beauty and care at 44% and toys at 35% are the top three categories for which consumers purposely purchased fake products, even though counterfeits might use cheaper, and even unsafe, materials in manufacturing. Homewares comes in at 27%. The top reason shoppers search for fakes, selected by 55%, is to save money. Four in 10 intentional purchasers do so because the item appeared identical, 31% because it was promoted by an influencer and 30% because they didn’t care if it was authentic or not.
Some consumers are repeat counterfeit buyers. One in six intentional counterfeit shoppers purchased 10 or more fake products over the two years prior to the survey, according to Red Points. The phony seekers find counterfeits through search engines (52%), social media posts (46%) and ads (35%). The majority (56%) shopped U.S. marketplaces, 45% shopped China marketplaces and 37% shopped fake websites.
Millennials (34%) and Gen Xers (30%) are the demographics most influenced by social media influencers when buying counterfeits. In effect, influencers normalize counterfeit products as clever budget-friendly replacements for brand-name goods, Red Points observed. Gen Zers trail at 28%, with Boomers at 18%.
Millennials (34%) and Gen Xers (30%) are the demographics most influenced by social media influencers when buying counterfeits. In effect, influencers normalize counterfeit products as clever budget-friendly replacements for brand-name goods, Red Points observed. Gen Zers trail at 28%, with Boomers at 18%.
Gen X is most likely to use AI tools to find fakes, with 37% using, for example, LLMs (large language models) to intentionally search for counterfeits. Millennials come next at 29%. GenZers at 25% and Baby Boomers at 15%.
When asked what would make them stop shopping for counterfeits, 45% of all survey respondents said cheaper authentic products, 39% said a decline in counterfeit quality and 38% said greater ease in verifying product authenticity via QR codes, authentication apps, holograms or blockchain verification. As such, most consumers who deliberately purchase counterfeits to save money will do so if they can get a similar degree of quality. Others approach brands with some ambiguity, as if they purchase what they believe are fakes because they think, or at least say, it’s hard to figure out what’s real and what’s counterfeit. Younger consumers are less likely to stop buying counterfeits if the cost of genuine products comes down or fewer fakes are available for purchase, the Red Points data indicated.
The Diversified Challenge
When considered in greater detail, the scope of the challenge fraudsters pose becomes even greater. As they shopped online, 78% of consumers who had unintentionally purchased a fake product or products did so on a marketplace, with 43% doing so on social media and messaging apps and 34% on a face website. Home goods are among the most purchased products on fake websites, social media and messaging apps.
While consumers often blame brands for getting counterfeits, marketplaces face a credibility issue as well. As more companies develop marketplaces to better satisfy shopper demand, some consumers are developing a substantial suspicion about the platforms, according to the Red Points report. Many see marketplaces as the place where fakes reside for the most part, led by GenXers (51%), Millennials (49%) and GenZers (44%). Only 18% of Baby Boomers share those worries. Half of consumers reported unintentionally purchasing a fake product on a U.S. marketplace, 43% on a Chinese marketplace, 34% on a fake site, and 29% on American social media.
When it comes to enforcement, Red Points data shows that 59% of all counterfeit cases detected were found on marketplaces, with 21% on social media, 15% on standalone websites, and 5% in ads. The company noted that social media and websites represent an important point of vulnerability, as the rise of generative AI tools makes it faster and easier to create convincing fake websites or launch fake social media accounts at scale.
Although marketplaces remain a main platform driving counterfeit sales, social media and fake websites are rapidly gaining ground, according to Red Points data, and the growth of new advertising vehicles is giving fraudsters new means to reach consumers. They are becoming major challenges for brands as generative AI makes it easier for bad actors to build convincing fake websites and social media profiles and use advertising to reach consumers.
Social media links (cited by 49%), search engines (48%) and ads (39%) were the most common means of leading consumers to fake websites, the survey determined. Red Points client data in 2023 and 2024, as previously noted, showed that the number of social media ads redirecting consumers to infringing websites increased by 179%.
When it comes to social media, Red Point survey respondents said they are likely to trust listings with official-looking photos (57%) or clear descriptions (47%), with the same proportion believing in accounts mimicking official branding. Bad actors create fake accounts with verification check symbols to make their creations appear legitimate. Indeed, Red Points has seen a 40% year-over-year increase in verified accounts found to be infringing, with an average of just over 300,000 followers.
Counterfeit websites are also making gains. Shapiro said that a brand would be in the title of a phony website to win consumer attention. However, the brand declaration, false as it might be, also made the fraudulent websites conspicuous to brands trying to hunt them down. So, now, many counterfeiters won’t include the names of the brands they’re counterfeiting in product descriptions, only posting elements like logos and photos to remain hidden. Although they don’t appear in search results when consumers are looking for branded goods, counterfeiters have an alternative outreach. They use social media and digital advertising, including such media available on search sites. Red Points uses logo recognition, visual recognition, and optical character recognition to spot fake products. As such, brands and their allies are also using AI to take down counterfeiters, while counterfeiters rely on AI to create professional-seeming outreach to keep themselves in business.
Red Points can handle between 350,000 and 400,000 enforcement actions per month, sending takedown notifications to social media platforms and marketplaces. However, fraudulent websites have become a bigger concern. Shapiro said that within the scope of Red Points’ enforcement actions, 70,000 are takedowns of fraudulent websites hawking counterfeit products.
“It’s a constant battle to stay ahead,” Shapiro said.
It’s also an expensive battle given the global dimensions of retail today and the extent of marketplaces, which increase their own vulnerability to counterfeiters by continually adding sellers, sometimes with insufficient vetting.
“There are hundreds of marketplaces in all regions of the world,” Shapiro said. “While a brand might begin selling only in the U.S., it may be an important part of the strategy to monitor the multiple regions throughout the world to see whether your IP is being stolen or infringed. While everything costs money, it may be important to expand your IP portfolio to protect against potential counterfeits.”
Counterfeits erode the value of brands wherever they originate, and goods move across borders more easily today. So, figuring out when and where to spend the money required to keep the fight going and how much makes sense are increasingly important business decisions for brands and for the marketplaces that carry them because sales and credibility are at stake.
Effective Education
To an extent, and as an encouragement for shoppers to make sure they’re purchasing legitimate goods, it can be worth informing consumers about the safety issues associated with counterfeit products. Shapiro said cosmetics makers do extensive quality and safety testing on their products, which is not a priority for fraudsters. Of course, consumers tend to be wary of counterfeit electronics, as the dangers associated with shoddy goods have received considerable media coverage. However, many consumers don’t take the time to consider what they might be getting in a set of children’s pajamas that isn’t fire-retardant or a bike helmet that might fracture and cause injury rather than prevent it in an accident.
Well-regarded housewares brands can suffer similarly. When it comes to portable drinkware, counterfeits can include unsafe materials, but some consumers don’t consider the possible dangers.
“I don’t know if the counterfeits would be a good idea to drink out of,” Shapiro said, adding, “When I think about dangerous stuff, it could be the dyes, it could be electronics that catch fire, it could be baby goods. There are a lot of things out there where I would go by the assumption that if it’s not authentic, it’s probably risky.”
Even beyond that, consumers are largely unaware that profits from phony goods can finance drug and even human trafficking.
Shapiro said that poorly informed consumers don’t necessarily concern themselves with the consequences of counterfeit goods sales, asking themselves, “What’s the harm?” without realizing the broader economic and safety implications.
Consumers have some reason to think twice about consequences if informed about everything from enslaved workers to the viability of stores that serve their communities and are losing money to counterfeiters, even as they combat difficulties associated with organized retail theft and other shrinkage issues.
Neither retailers nor brands generally prefer negative messaging online or in stores. Shapiro said, however, that circumstances are such that providing information about counterfeits and their consequences is seen by more companies as something worth doing.
Ten years ago, most retailers avoided talking about counterfeits. It was seen as a negative topic. But now more brands are embracing transparency, adding clear messaging about authenticity and authorized retailers. It’s a positive shift that educates consumers and protects them from disappointment or risk.
– Daniel Shapiro, Red Points Senior Vice President,
Brand Relationships and Strategic Partnerships
“Ten years ago, most retailers avoided talking about counterfeits. It was seen as a negative topic,” Shapiro said. “But now more brands are embracing transparency, adding clear messaging about authenticity and authorized retailers. It’s a positive shift that educates consumers and protects them from disappointment or risk.”
The fight against counterfeiters can benefit from closer collaboration between brands and marketplace platforms, with companies such as Red Points providing additional expertise and monitoring capabilities. However, e-tailing aligns in attacking the problem; close cooperation has the best prospects of creating effective initiatives that can do more to thwart often resilient fraudsters. Cooperation can be a fraught prospect, though, as retailers expand their online initiatives, including adding more marketplace sellers and promoting their own social media and advertising. Still, without it, the ability to combat counterfeiters who are constantly coming up with new approaches and enhanced capabilities may never be enough to significantly reduce the damage.
“At the end of the day, we have an interesting perspective as a provider where we help brands solve this problem because we collaborate closely with both brands and marketplaces,” Shapiro said. “For our brands, our job is to make that marketplace clean, and the marketplace appreciates it because they want the consumers to get what they intend to get.”
