Money Rehab with Nicole Lapin - How to Spot a Fake with Retail Expert Hitha Herzog

Episode Date: September 2, 2021

When you buy a fake product, not only are you being scammed… but you also may be unintentionally funding some pretty troubling operations. Today, Nicole talks to premiere retail expert Hitha Herzog on how to spot phony products and protect your wallet! Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Before last year, you might not have noticed the way prices rise and fall at your local pharmacy.

But during the pandemic, price fluctuations became hard to ignore. All of a sudden, we were paying premiums for toilet paper, hand sanitizer, soap, all sorts of products that formerly toted consistent price tags. With these changes in price, a new market for fakes was born. People started selling phony hand sanitizer, fake N95 masks, and more. These fakes are much more troubling, of course, than your standard fake designer purse because this new wave of fakes were promising to keep people healthy, not just trendy. This new corner of the black market has opened up a can of worms for us consumers. And now more than ever, people are asking more questions about their consumer rights, and they should. What can we expect from the companies we're buying from?

How do we actually spot fakes? To help me find answers to all of these questions, I called up my friend, Hitha Herzog, a premier expert in the retail industry. So if we step back and look at the black market, that's essentially counterfeit items, right? So which products are most commonly counterfeited? Most commonly counterfeited items, shockingly, are things that you use every day. So baby formula, if you would believe. I mean, these are household products, detergent. I think people think that it's computers,

which are certainly counterfeited, and handbags. I'm sure we all have friends that carry around fake handbags. And I certainly do. And I always tell them, yo, do you know what? That's funding. And no one cares, which is sad because we're seeing this political crisis happen in Afghanistan right now. And this has been going on for 20 years. And even 10 years ago, when the Taliban was an organization that was trying to obtain political power, and they've been trying to... They basically... If you look at it from the financial crisis on, the Taliban, like any other political regime, was running out of money. There was a global economic crisis. And so the way that Taliban and other... Well, now that they're a government organization, they're now head of Afghanistan. But at the time, they were considered a terrorist organization. The way that they were getting funded were through these illicit ways. So selling of poppies, drugs, human trafficking, and of course, selling stolen and counterfeit items. So that's where... People don't even think about that. And that's a big... That's what I researched

in my book. But then we have even more local things. Local criminals are going into stores, stealing stuff or purchasing counterfeit items and selling that to fund terrible things. So that's why we should all be concerned about... It seems silly. Everyone wants to get a deal on merchandise, but we really have to be careful with what we buy. So what is it funding? God, let's run the gamut. Think of anything bad that you can imagine and counterfeit install merchandise is probably funding it. So human trafficking, drug cartels, terrorist cells. My book focused on these two terrorist cells that were coming out of the tribe border region of South America and also, you know, in like kind of upper

Pakistan area, you know, as you're getting close to the border of Afghanistan. But not to sound alarmist, but I mean, I think those are the three main things which are pretty bad. I mean, drug cartels, human trafficking, you know, terrorist organizations. I wouldn't want to buy stolen items if I knew that that's what that was funding. But how do you counterfeit laundry detergent? Well, laundry detergent is shockingly expensive if you think about it. I mean, when you go to... You don't think about it because you need laundry detergent, obviously. Or maybe you're one of those celebrities in Hollywood that doesn't necessarily take baths or maybe they don't even wash their clothes. But I know because I have two kids and a husband that sweats a lot, we go through

laundry detergent a lot. So it costs a ton. One of those, I don't know, 32-ounce bottles are somewhere between $12 to $15 if you're using coupons or not. So because that price markup is relatively high, it's a target that people want to counterfeit. So they'll use the same packaging, but then they'll change the formula. It'll... Maybe it's like a different mix of lye or a different mix of coloring with like a... I don't know, dishwashing soap or something. And then they'll put it in that packaging. And then they'll sell it on a site where... We're all trying to save money.

It's kind of what... Who doesn't want to save money? People probably listening to this podcast wanting to know how they can save money and ways to make their money health better. So they target those people that want to save a buck. And again, who doesn't want to, but it's not worth it. So if you see Tide on a site or even a store or... I don't know if anyone's buying... Actually, Nicole, you used to live in New York. Do you remember when you would go out on the street and you would see makeup vendors? People would be selling Mac makeup. And you're like, Oh, cool. Mac makeup. Five eyeshadows for $10. Yo, that's

fake. Yo, what? I'm shook. I thought it was just like the Prada stuff that's fake or like the Gucci, Schmoochie. No. No, no, no. And that's part of the reason why

and I don't... I mean, this isn't to be political, but it's it's more just going to put things into context. If you remember a couple of months ago, actually, it's been a year now, but you remember how we the United States had this meeting with China and part of the negotiations and part of the discussions were intellectual property. You know, they wanted to somehow, you know, secure further American intellectual property. So these fakes didn't proliferate. And I think those talks broke down. I wasn't sure. I heard it was, you know, the last I was reading about it, you know, it got a little chilly in that during those negotiations.

But that's part of the reason why, you know, this sort of this discussion between the United States and China is so important. Hold on to your wallets, boys and girls. Money rehab will be right back. Now for some more money rehab. So how do you spot a fake? So if you're on Amazon or something like that, and you're like, duh, I want the best price detergent or duh, I want the best price soap or whatnot, because every dollar matters. Do you read the reviews? Do you what? Sometimes I get weird stuff that's like, why is this coming from China? And I think that it's not going to be. Yeah. You want to make sure that... Well, there are a couple things. So I personally don't buy a lot of my household products from Amazon because it's very hard to verify the third-party sellers. And so much of Amazon's profits come from third-party sellers.

So it's hard to do that. So if you have a third party... And what I mean by that is that it's not... Amazon relies on other retailers to provide the product. So even though they're Amazon warehouses, all of that product isn't housed in these Amazon warehouses. I mean, basically, that would be like a whole gigantic Amazon warehouse that was the size of the United States if they did that. So they rely on these third-party sellers to ship product that you're

buying. Now, let's say you're on Amazon and you see... You're like, Oh, I want to get some Tide or Dreft for the kids or something. You have newborns. And you see it priced way below the actual market rate, right? I mean, it's basic economics. If prices are determined based on what other things are priced at and the true price. So if you see something that is priced way below's something really egregiously wrong with it or it's fake. floored. I had no idea that basically everything could be counterfeit. I hope now that my clothes are safe as they are being washed currently and not disintegrating by some weird stuff that might be in there. So if we step back and say, okay, no, we don't want to buy fake stuff. Obviously,

we don't want stuff that's going to ruin our clothes. We don't want to fund human trafficking. There are a thousand reasons why not to do that. So what are some legit hacks that you can give shoppers in general who are out there looking for legit deals? Well, I mean, this sounds very crunchy and very hippie, but I almost would say, I mean, we're talking specifically about laundry detergent. There's no reason why you can't make your own. Your clothes will get just as clean as whether you are using Tide or not. In fact, if you go to Whole Foods and you buy the Whole Foods...

It has nothing in it. No dyes, no perfume. That formula is Dr. Bonner's and something else. I didn't actually deep dive into it, but you can make the same thing and it'll clean your clothes just as well. I think we get used to, in our minds as consumers, if we're not buying a product that has been marketed to us all of our lives, like Tide, for example, then our clothes are not as clean. We are not as shiny. We don't feel as good. And that's effective marketing. But I think things are being flipped on its head now. I think people are now realizing, well, I can cut out that marketing and either make my own or

maybe go to a lesser priced brand. And so I mentioned Whole Foods. I mentioned Whole Foods because it's the closest grocery store to my home. I would also go to Trader Joe's, but the lines are so long that it's almost not worth it. So Whole Foods brand, Trader Joe's brand, any grocery store brand is going to be significantly less than any brand name product that's out there. And I think we've been hearing that all of our lives. And the same goes for soap, household goods, for sure. When it comes to the actual clothes that we wear, and if you do want something designer, well, you should be ready to pay what that designer is charging if you walk into an Yves Saint Laurent or if you walk into a Prada.

if you walk into an Yves Saint Laurent or if you walk into a Prada. There's no ways around it. Even if you go on the RealReal, which is a secondhand consignment store, the products that are priced with tags that have never been used are pretty much on parity with what you would buy at a store. So make your own. Look for store brands. They're definitely a lot cheaper than maybe getting brand names. Or be prepared to pay that premium price. But if you're looking for a discount online, watch out for the third-party sellers. Watch out for the price discount that's under 30%. And also the reviews. If there are too many positive reviews with lots of misspellings, that's a fake item. Well, I didn't know that until now, actually.

And I just want to say, for the record, you are the least crunchy woman I know. You are the most fashionable. So the fact that you're saying to make laundry detergent, this is the first time I've entertained that possibility. If it's coming from you,

then I will do whatever you're doing. Nicole, we all learn new skills during the pandemic. I think that was one of my new skills. Girl, you never cease to amaze me. And you and I both hate cliches, but I guess the cliche that you get what you pay for is kind of true. I mean, you've done so much reporting on consumer rights. I can listen to you read the phone book. You have the best voice.

You have the smartest reporting and writing. Can you give us some consumer rights and insights that people might not have known before that they have and they should use? use? One consumer rate that I thought was really interesting is that if an item isn't shipped at the date that it was supposed to be shipped at, and it said that you were going to get it at a specific date, then I think you have the right to not pay for it, if I'm not mistaken. So let's say you're on Amazon and you buy an item and it says, well, the delivery date is September 15th. And September 15th comes and goes and you don't see it and it's not there. And it finally comes, let's say September 30th. You can say, well, you know what? You didn't retailer. You didn't fulfill your end of the bargain by getting my product at the date that it was due, I am going to now go back and say,

I don't... You need to refund me. I don't need it anymore. Or you have a legal reason to not have to pay for it. So that's just like a glorified, if you don't get your pizza in 30 minutes, it's free. Exactly. Exactly. You're so smart. Nicole Lappin might be actually the only woman on the planet that hates shopping. You know what? I will join you on that. It's a very odd thing for me to admit, considering this is what I cover and I am on the retail

detail, but I really, really don't enjoy shopping for myself and And really just the rush of everything. I don't like the pressure either to have to give. I'm a great gift giver. I give amazing gifts. However, I do not like the whole forced shopping. I think it's really... It keeps our economy going, but it also makes you feel icky sometimes. For today's tip, you can take straight to the bank. If the price tag looks too good to be true, it probably is. When you see a product that's displaying some red flags, just don't buy it. Obviously, don't buy household products you suspect are fake, because what's actually inside the bottle could be toxic. But also, don't buy the fake Gucci purse. While the bag's material

won't be toxic to you in the same way fake detergent might be, the money you would put down to buy the bag may fund operations that have toxic effects around the world. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikader and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. rehab supervising producer Michelle Lanz for her pre-production and development work.

And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.