Anti-Counterfeiting: Using RFID and NFC to Protect Brands and Revenue
The Netflix film, Mixed by Erry, follows the (mis)fortunes and eventual conviction of three brothers whose bootleg tape business became the biggest-selling record label in Italy in the early 1990s. The biopic opens with the young boys huddled around their kitchen stove in Naples, helping their father to glue fake Jack Daniel’s labels onto bottles of a brown concoction that convinces unwary market-goers to part with their cash.
While Mixed by Erry makes for an entertaining story, counterfeiting poses serious risks to public health, communities and global economies. The rise in e-commerce has caused the global counterfeiting industry to balloon to $3 trillion, larger than several countries’ GDP.
Counterfeiting carries serious risks:
- Public health risks
- Destroying brand value
- Damaging economies
- Funding organized crime
- Loss of jobs
Benefits of Using RFID and NFC
Public Safety
Products that enter the consumer market without being rigorously tested to industry standards pose a serious risk to public health. Untested pharmaceuticals, unsafe toys, exploding batteries and substandard car components risk causing death or life-changing injuries to the general public.
Brand Protection
Counterfeiting irreparably damages brands. Consumers who have been duped into or harmed by buying an inferior, short-lived or unsafe product bearing a fake marque will lose trust in the genuine manufacturer of those products.
Supply Chain Assurance
To preserve warranties and ensure that replacement parts meet rigorous safety standards, many manufacturers demand that only genuine OEM components are used during scheduled maintenance. If supply chains become polluted with counterfeit components, lives and livelihoods are at stake. A garage mechanic fitting a substandard part could put a car’s occupants and other motorists on the road at serious risk.
Crime Prevention
Consumers who knowingly purchase counterfeit goods are undercutting a business which has invested in its intellectual property, research and development, quality control, legal and safety compliance, and after-sales service. That investment needs to be recouped in sales. Ultimately, established businesses may fail as a result of losing market share to illicit trade, leading to job losses and wider economic impacts.
Revenue Protection
A report conducted by OECD for the European Union Intellectual Property Office in 2019 estimated that counterfeit products were worth $464 billion and represented 2.5% of world trade. Worse still, those consumer dollars are often being siphoned off into criminal organizations.
The OECD report revealed that most counterfeited products were shoes, clothing, perfume, cosmetics, jewelry and children’s toys and games. More worryingly, the report found that fake pharmaceuticals were also finding their way into healthcare supply chains.
Anti-Counterfeiting Solutions: Protecting Brand Equity With RFID and NFC
RFID is a tried-and-trusted asset tracking technology that is widely used in industries such as retail and manufacturing, which were the earliest adopters of anti-counterfeiting solutions. When RFID tags, managed by a cloud-based authentication service, are combined with near field communication (NFC), brands gain a powerful solution that can combat counterfeiting and also maximize customer engagement.
Increasing Trust
Discreet tags, embedded in every premium product, provide a tamper-proof method to prove to customers that they are buying the genuine brand, and that the product quality is assured.
Leveraging smartphone NFC capabilities provides a frictionless authentication experience that lends itself to enhanced and personalized engagement. By simply holding a phone near the product, the customer can verify that it is the genuine article and not a cheap imitation.
Improving Customer Engagement
Old Kempton Distillery sought a sophisticated way to protect consumers and preserve brand equity of its single malt whisky. Every bottle is protected with a label containing an HID® NFC Trusted Tag™. The passive tag is cryptographically secure. Each time a customer taps their iPhone or Android phone on the label, a secure channel is activated to verify the product. Every label tap generates a unique web link, to prevent counterfeiters from spoofing URLs. The solution has the added advantage of allowing Old Kempton Distillery to improve customer engagement with secure, personalized messages to help build brand loyalty.
Enhancing Customer Experience
RFID and NFC can work in tandem to both verify products and greatly enhance the customer experience. STISS Ltd is a manufacturer of sapphire glass that has invisibly incorporated NFC into luxury analog watch faces, to enable a range of digital applications including product authentication and contactless transactions via the watch.
Anti-Counterfeiting Measures
The OECD report based its calculations on seizures of counterfeits by customs agents worldwide and called for experts to map key trade routes to stem the international trade in illegal and potentially harmful products. Using a combination of cloud-managed RFID tags to track and trace genuine goods and NFC to prove legitimacy at the point of purchase, brands can improve trust and enhance customer experience while combatting a serious and growing threat to public and economic health.
To learn more about how HID Trusted Tag solutions can help your organization combat counterfeiting and protect brand and revenues, sign up for the webinar on October 25.
With over 18 years of experience in sales, business development, project management, and product strategy, Rahul Kothari is a seasoned leader in the RFID and smart card industry. As the Global Sales Director at HID, he is responsible for the NFC Trusted Tag product line and the SaaS platform, offering secure and scalable solutions for digital identification, product authentication, and proof of presence.
References:
Mixed by Erry — a film about a bootleg tape organization run out of Naples in the 1980s and 1990s, which grew to eclipse the market share of all legitimate record labels
European Union Intellectual Property Office OECD Report, Global Trade in Fakes — A Worrying Threat
The Guardian, Spot the Difference: The Invincible Business of Counterfeit Goods, May 10, 2022
Reuters, Cisco Wins US Court Order Barring Sale of Counterfeit Equipment, October 4, 2023
HID Solutions for Product Authentication and Brand Protection
HID Global Trusted Tag Services
Old Kempton Distillery Case Study