Buyer beware: Counterfeiters try to cash in on holiday shopping

Battle against counterfeit goods

Customs officers are working to stop huge quantities of counterfeit products from ending up in your holiday shopping cart.

The National Retail Federation says Saturday was the biggest day of the holiday season, with an estimated 156 million shoppers.

And counterfeiters are trying to cash in.

CBS News correspondent Kris Van Cleave went to a facility in Kearny, New Jersey, to show us who profits from the illegal goods. 

The warehouse is one of four Customs inspection facilities for the Port of New York and New Jersey, and is about the size of two football fields.  Here, the focus is on finding contraband and counterfeits.

This is the front line in the battle against counterfeit goods, where Customs officers have seized a shipping container from China loaded with thousands of pairs of what look like designer Ugg boots. But they’re not.  The outer box isn’t even labeled “Uggs.”

Last year seizures jumped by 25 percent.  Almost half (49%) came from mainland China, and another 34% from Hong Kong. 

Clothing, electronics, shoes, jewelry, watches and purses are counterfeiters’ favorites. This time of year, so are toys. 

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“Whatever’s popular this season, that’s what they’re gonna try to get in,” said Deputy Chief Officer Scott Rutledge. He says every shipment that comes to this warehouse is flagged for inspection. Thousands of boxes will be searched. 

Often what’s inside is not what it seems, such as the not-quite Nike Air Jordans -- the shoes come separate from the iconic jumping man logo, which is to be added in the U.S. upon arrival.

Similar tactic: a bag of Michael Kors tags to be added to generic purses. 

Van Cleave saw fake North Face and sports jerseys, and another favorite of counterfeiters: Louis Vuitton bags.

He asked, “What do you tell consumers, people out there shopping, how to avoid this?”

“You have to cautious of who you are buying this from,” Rutledge replied. “If a price seems too good to be true, it probably is.”

Officers say there’s so much money in counterfeit goods, they compare it to drug trafficking. The street value of that seized cargo container of fake Uggs is likely in the millions.

And where does that money from counterfeiting go? Criminal organizations, Rutledge said. “And some of the proceeds have been linked back to funding of terrorist organizations.”

Over the past decade, Interpol has traced the profits from fake merchandise back to several terror groups, including Al-Qaeda.

Everything in the warehouse is just from one day’s shipments; tomorrow, it starts all over again.

So far this year Customs has seized more than a billion dollars’ worth of counterfeits, and that’s just in the New York area alone.