SANTA MONICA, CA--(Marketwire - Dec 6, 2012) - As the holiday buying season continues to gather steam, the Consumer Fraud Center today issued a warning about a fast-growing trend: the sale of goods at bargain-basement prices through so-called "daily deal" sites, which can mask the sale of counterfeit or illicit goods.
Popularized by sites such as Groupon, these "daily deals" initially focused on highlighting steep discounts at local merchants seeking to build customer traffic, but have increasingly come to be dominated by third-party retailers interested in dumping large quantities of consumer goods as quickly as possible, even if those goods have not been properly verified as being legitimate.
"What makes these sites particularly risky is the liquidation of merchandise through a 'flash sale' before its authenticity can be verified," said James Lee, executive director of the Consumer Fraud Center. "You are probably safe if buying a voucher for a local restaurant, but you should exercise caution when buying 'daily deal' goods at an extreme discount."
Lee gave the example of purported luxury brand watches sold at discounts of 75 to 90 percent, along with small appliances, luxury apparel items, electronics and toys as being the most-often sold on these flash deals.
"They are not necessarily counterfeit, but a luxury watch or handbag listed for pennies on the dollar has no greater claim to authenticity if sold through a 'daily deal' site than one hawked on Canal Street in New York or Santee Alley in Los Angeles," Lee said.
One such "daily deal" site with a troubling track record is Brooklyn-based Shnoop.com, which dispatches email blasts to consumers with featured daily bargains. According to Thomas Peistrup, a Los Angeles-based intellectual property attorney, even after sending a "cease and desist" letter, he was shipped a counterfeit product as part of a client "test buy."
"We sent a 'cease and desist' letter because we were nearly certain that the discounted goods did not originate from the legitimate supply chain. Sure enough, when our test buy later arrived, we confirmed it as counterfeit," Peistrup said.
Lee reiterated the Consumer Fraud Center's long-standing advice that consumers should be leery of extreme discounts offered over the internet.
"The advice passed on for generations still holds true: If a deal seems too good to be true, then it probably is," Lee said.
Lee added that any consumers who purchased a counterfeit or illegitimate item on one of these daily deal sites are encouraged to post it on the Consumer Fraud Center website so other consumers could be warned during this holiday season.
The Consumer Fraud Center
The Consumer Fraud Center is dedicated to uncovering the use of legitimate online portals and shopping destinations for the sale of counterfeit and fraudulent consumer goods and products. It relies on its network of activated consumers who submit reports on counterfeit goods sold on websites to create a national database of products searchable by consumers, media and law enforcement. For more information, please visit us at www.consumerfraudcenter.com.