Packaging Fraud Case Study- Refilled Apple iPad and Wine bottles

Earlier today we wrote about the clay iPads that popped up in Canada. As more information has emerged about this situation we have decided to take a closer look into the problem.

A recent article states that someone bought real iPad2’s with cash, removed the iPad from its packaging and in return, replaced it with a perfectly weighted slab of modeling clay. The counterfeiters then resealed the original packaging and returned it to the store. The crime was done so professionally that Apple employees could not tell the difference in packaging or weight and resold the clay to unwitting customers.

Refilling genuine packaging with a fraudulent product is not a new practice. This is something that has been around for years and is evident even more in the wine and beverage industries. For example, in China, there has been a huge problem with people refilling high-end wine bottles with cheap inexpensive wine, tarnishing the validity of the popular wine industry and brand owners. To the average consumer, the packaging looks legitimate therefore, the wine must be as well. However, to those educated in wine, the difference is overwhelming. The problem has grown so quickly that the organizers of wine tastings are taking to smashing the used bottles with a hammer to curb the activity. But unfortunately, the black market prevails as people are offering significant money for empty bottles from anyone who is offering.

DSS sees a clear solution to this problem. Apple needs to include a tangible seal with authentication features and copy deterrence technologies onto their packaging. This frangible seal is a form of adhesive label that is extremely delicate once applied, and when removed it comes apart in layers and pieces. The copy deterrent AuthentiGuard Pantograph 4000 would prevent a counterfeiter from being able to scan the graphics onto a desktop to create or duplicate the seal. Additionally, adding an authentication technology such as AuthentiGuard Phantom or AuthentiGuard Prism would give retailers a quick and simple way of verifying if a seal on a product is genuine. Both of these technologies cannot be duplicated on a copier or scanner and are not easily mimicked.

These simple solutions would greatly help to prevent the emergence of fraudulent product into the supply chain, reducing financial loss to retailers and brand owners as well as reducing liability to brand value should dangerous fake products enter the market. When combined with covert security features on the original label or packaging itself, DSS would create a strong and more secure solution that would benefit everyone but the counterfeiter.

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