The strange man in a trench coat at the street corner is aclassic cartoon image… “Have I got something to show you!” he says,opening his coat to reveal five rows of Rolex watches. In placeslike New York City, the trench coat has been upgraded to a foldingtable and chair. Coach handbags, Ray-Ban sunglasses, Gucci heels,Michael Kors bracelets and the classic Rolex replicas….Or are theyknock-offs?

We know these cheap products are counterfeits, but can you tellthe difference between a replica and a knock-off? Your bestguess at telling if something is a fake is to look at the label. Onthe item in question you see “Made in China.” You determine it's acounterfeit. But today many retail items on store shelves atyour local mall are made in China and are indeed authentic designerbrands.

People use the term “knock-off” and “counterfeit”interchangeably, however they are not actually the same thing.Distinguishing between a replica, a knock-off, and a genuinelycounterfeited item will be the subject of a webinar on Sept. 11th,“Bestpractices for spotting counterfeit items.”

Plying a trade in cheap replicas and knock-offs is big business.How big? The projected value of global trade in counterfeit andpirated goods for 2015 is pegged at $1.77 trillion, according tothe InternationalAntiCounterfeiting Coalition. As you might guess, themost commonly counterfeited consumer items include electronics,watches and jewelry, handbags, footwear, apparel andaccessories…items that also happen to be the most popular thingsfiled in burglary theft claims, according to Enservio data.

The increased prevalence of counterfeit items means adjusterswill encounter them in the field and need to protect against payingtop dollar for claims consumers have inadvertently filed forcounterfeit items.

Adding insult to economic injury, there are serious risk factorsthat can harm unsuspecting consumers of fake products. Unlike theman in the trench-coat, products sold at retail stores must adhereto Consumer Safety Product Commission guidelines to stay inbusiness. While U.S. customs officials say 80% of fakes smuggledinto the country come from China, a very real concern is consumersafety as fake products arrive completely unregulated.

A recent CBS story reported on risks including “fake batteries thatcontain mercury, electrical products that don't meet safetystandards, perfumes found to contain urine and high alcoholcontent, and clothing made with toxic dyes and flammablematerials.”

Here is a quick summary of the four categories of retailitems:

i) Authentic – The real product from theoriginal designer.

ii) Replica – An exact copy of an existingproduct, meant for display purposes. This most often occurs inmuseums. If this word is used in the market, it is often meant todescribe a knock-off.

iii) Knock-off – A product made to closelyresemble or imitate an existing designer piece, but with the logoor brand name of the company creating the knock-off, and not thatof the original. Knock-offs are often sold at much less than theauthentic piece. If the purchaser is familiar with the real brand'slogos, and current line, they will not be deceived. If thepurchaser is not familiar with these details, they may believe theitem to be real. Knock-offs are legal.

iv) Counterfeit – A product made to lookidentical to a designer item, with the brand name or logo of thedesigner item, and sold as authentic, but is made by anothercompany, thus deceiving the buyer.

Don Stafford is senior vice president, customer experience,for Enservio, which offerssoftware and services across the entire value chain of contentsclaim processing—from onsite inventory capture of non-restorablecontents—to transcription, appraisal, valuation, payment,replacement and predictive analytics. Enservio will be hosting awebinaron identifying counterfeit items on Thursday, Sept.11^th.