Nowadays, it's tough for customers to know if that prize toy sold online is genuine or a cheap knockoff.
Last year, the Government Accounting Office found that 20 of 47 third-party items purchased from popular e-commerce websites were fakes. This fall, U.S. Homeland Security Investigations worked with Colombian authorities to seize 155,000 fake Disney, Marvel and other toys at the Cartegena port with a street value — if all that product had been genuine — of $5.4 million.
Counterfeits are an increasing worry in the European Union, too. Last year, EU inspectors seized 3.8 million toys worth 25.7 million euros ($28.5 million).
More than 84 percent of the toys seized came from China. Most items are seized at seaports, but most seizures are for courier and postal traffic ordered off e-commerce sites.
In a January report on fakes, the New York-based trade group Toy Association complained about the virtually nil barriers to pirates selling online.
"Initial entry to online marketplaces is often as simple as setting up an account with a unique email address," the association wrote.
Dislodging pirates is a costly and time-consuming process that puts the onus on the intellectual-property rights holder, while pirates can easily switch accounts. The association wants online storefronts such as Amazon, eBay and China's Alibaba to take a much more proactive role, collecting and authenticating contact information.
Consumers are often unaware of just how many counterfeit goods are offered online, the association contends. Again, the association wants storefronts to be much more proactive, requiring retailers to provide child-safety documentation. Fake toys often fail to meet safety standards, the association said.
As the Colombian bust makes clear, counterfeits are more of a concern for companies that have invested heavily in world-renowned intellectual property, less so for companies like Kent, Ohio-based SimPlay3 Co. that stay away from pricey licenses.
Launched three years ago, SimPlay3 rotationally molds toy houses, play structures and other bulky goods.
"Our products are very labor intensive. There's not much margin. It's very tough to profit from a knockoff," CEO Jim Miller said.
