With the growth of online shopping, a new, sophisticated type of fraud has crept into luxury e-shops. According to Business of Fashion magazine, the number of customers who abuse generous return policies by exchanging purchased originals for high-quality replicas and then returning them to retailers is growing. Today, such counterfeits are often so well made that it is very difficult—sometimes almost impossible—to detect them at first glance.

In recent months, similar incidents have spread mainly through social media. Influencer Tiffany Kimm, for example, pointed out on TikTok that instead of an original handbag from The Row, she received what was likely a counterfeit from the popular e-shop Ssense. Although the store accommodated her, offering a discount and a refund, this did not resolve the situation. Other users shared similar experiences, not only with Ssense, but also with Farfetch and Saks Fifth Avenue. One extreme case even described a shipment of a luxury handbag in which the customer found only a can of tuna instead of the product.

When generosity helps fraudsters

According to experts, these situations are mainly caused by lenient return policies that e-shops introduced during the pandemic to encourage online shopping. However, this approach has also opened the door to people who abuse the rules.

According to Riskified, in the US alone, losses caused by fake returns will reach an astronomical $104 billion in 2024 – four times more than in 2020.

This situation poses an extreme challenge for luxury retailers, as large quantities of returned goods cannot be checked manually and in detail. According to the authentication platform Entrupy, which analyzes counterfeits in the luxury sector, the proportion of counterfeits discovered rose from 8.3% in 2021 to 8.7% in 2023. This means that fake products, which are becoming increasingly high-quality, are also beginning to find their way into premium stores that do not have sufficiently robust authentication systems.

Technology as a defense against counterfeits

Technology offers a possible solution, such as special QR codes or NFC chips. Such a code is placed on the product in such a way that it cannot be removed without being damaged. If the product is returned without this code, the return system automatically rejects it or triggers a more detailed check. Some brands already use NFC chips to verify the authenticity of their products, but according to experts, the problem remains that ordinary customers often do not know how to use the chip. Paradoxically, counterfeiters have also started to create fake QR codes and authentication websites that appear credible.

Vinted, Vestiaire Collective, and other second-hand platforms specializing in the resale of luxury goods have already introduced mandatory product authentication. However, this is a time-consuming and costly process that traditional online retailers cannot yet afford on a large scale.

Authenticity as a new challenge for the luxury world?

The increasing pressure to verify returned goods raises the question of whether authentication services will become a new important segment in luxury retail.

It is now crucial for brands to ensure that their products do not end up in anonymous transport warehouses, where originals can easily be confused with counterfeits. It is therefore no surprise that Prada recently announced an exclusive partnership with the e-shop MyTheresa to give customers a clear signal where to buy its products without worry.

Fashion houses must now balance the desire to make their goods as widely available as possible with maintaining full control over product authenticity. The future of luxury may therefore lie in brands tightening the rules of the game once again. Luxury will once again become not only a question of prestige and price, but also of verifiability and trustworthiness.