At this time of year, people are rushing out to buy gifts and stock up on both luxuries and essentials. This splurge of spending means inevitably that wallets and purses will be stretched – so shoppers will be looking out for a bargain. But when is a bargain actually something more sinister? The UK Intellectual Property Office has recently warned of the growing problem of counterfeit goods.

Counterfeit products cost the global economy an estimated US$250 billion (£201 billion) each year, with the European Union losing an estimated €35 billion a year due to counterfeiting. Customs in Hong Kong, from where many fake products enter the UK, recently confiscated £1m worth of fake goods – and there have been many seizures around Britain, with Manchester, Birmingham and Newham in East London emerging as hotspots.

The most common items are knock-off luxury handbags, watches, clothing, fashion accessories from designer labels, perfumes, tobacco, alcohol and electronics. In 2010, an investigation by luxury brand Louis Vuitton led to raids and 30,171 anti-counterfeiting procedures worldwide, resulting in the seizure of thousands of counterfeit products and the break up of criminal networks. Yet complaints about the knock-off goods on social networking sites have risen by 400% since 2010. Recently, the voucher and deals site Groupon found itself at the centre of controversy when consumer watchdogs found that gold and sapphire jewellery and branded Ralph Lauren clothing sold by the site were in fact fakes.

Law enforcement has been diligent leading to convictions but, as with other illegal products, it is hard to locate and cut supply chains. Earlier this year, luxury brands won a significant victory in their battle with the billion-dollar online counterfeit industry when the Court of Appeal in London ruled that brands could ask internet service providers to block access to websites selling counterfeit goods.

Why consumers buy fakes

There’s been a significant amount of research into why people buy counterfeit goods and the types of people who may be more willing to do so. Essentially, counterfeit products provide a status symbol at a fraction of the cost of luxury brands. High-end fakes, especially designer watches, are now so good that even dealers can be fooled. Some consumers feel that genuine brands charge unfair prices, and may find comfort in thinking that they “beat the system” by buying a convincing fake. However, if the fake is discovered then the buyer’s reputation is at risk of being dragged through the mud in front of the very same people with whom they were attempting to raise their status.

Why avoid counterfeit products?

Aside from moral reasons around depriving rights holders of the fruits of their labours, and the desire not to give money to the purported criminal enterprises supported by counterfeiting, there are some practical reasons not to risk buying a knock-off.

Electronics are the most convincing illustration. Counterfeit Apple products such as power adapters and chargers have flooded online retailers like Amazon. Whereas an original Macbook Pro power adaptor costs £80, replicas can be found for only £27, and £19 iPhone-branded charging cables are sold for only £6. The cheaper product brings risks with it, however, as investigators found that 99% of counterfeit chargers run the risk of electric shocks and short-circuits that could cause fires and could injure or even kill.

Counterfeit toys often are incorrectly labelled, of poor quality craftsmanship, and represent potential choking hazards to young children. Among the most counterfeited items are popular gadgets such as self-balancing scooters or “hoverboards” – and these have been regularly found to overheat and explode.

Another danger area is counterfeit cigarettes and alcohol. Cigarettes have been found to contain arsenic, mould, dead flies and even rat droppings, while batches of counterfeit vodka have caused illness and even deaths from the use of ethylene glycol (antifreeze) which attacks the kidneys and heart, methanol that can result in blindness, and isopropyl alcohol that can even in small quantities cause drinkers to fall into a coma. Russian authorities estimate deaths from counterfeit vodka at 45,000 in the early 2000s, falling to around 12,000 in 2010.

Cosmetics sold online have been rumbled as fakes after laboratory tests and some have been associated with potential side-effects including skin irritation, swelling, rashes, burns and even long-term health problems.

More than meets the eye

While some shoppers will willingly buy a fake, others are unwittingly scammed when their full-price products turn out to be counterfeit. Even the money we shop with can be counterfeit – fake £5 and £20 notes are in circulation – while other scammers find ways to dupe unsuspecting users into revealing their private online banking details.

Even the documents and means we use to identify ourselves and prove that we are not fake are themselves faked: investigators recently raided a fake US embassy in Accra, Ghana, complete with US flags, photos of the president and multilingual “consular officials” that had been issuing visas, travel permits, and fake identification for an unbelievable ten years.

How to spot a fake

For luxury goods such as handbags, the recognisable logos and monograms are so well replicated that the surest way to identify a fake is in the craftsmanship and the materials. Botched logos, font mismatches or misspellings are dead giveaways. But, a good fake can be hard even for the manufacturing company to distinguish it from the real thing – it can require forensic techniques to determine technical details such as the number of stitches per inch in a seam (often a trade secret) or date markers and serial numbers to determine the genuine article.

It’s safe to surmise a Rolex on sale for £50 is a fake. But a Rolex resold for £1,000, complete with papers and box, is a different matter. Documentation such as certificate and warranty with serial numbers, and purchasing only from authorised dealers is the best way to avoid getting scammed. The only sure method is for a watchmaker to examine the watch’s internal mechanism as this will be almost impossible for the scammers to fake. In general, exercise caution when buying luxury products from online marketplaces such as eBay or Amazon, rather than from trusted dealers and retailers. And always remember that if a bargain seems too good to be true, it probably is.