Forgery of goods and using known brand names for fake products is a growing phenomenon. Actually the subject of brand piracy is practically present in almost every area of daily life. It includes consumer goods like fashion, food, beverages, industrial parts for cars, aircraft and other machines and even medications.
In 2008 the International Chamber of Commerce argued that counterfeiting accounts for around 5% to 7% of world trade. In the same year the World Customs Organization estimated trade in ‘fakes’ as US$512 billion.
The total loss from the counterfeit goods industry, faced by countries around the world is $600 Billion, with the United States facing the most economic impact. (See http://en.wikipedia.org/wiki/Counterfeit)
It is true that in some cases people want to buy fake products for their lower price, but it is still important that customers will be able to validate the authenticity of the product they pay for (whether fake or not).
While many companies lose a lot of money from this phenomenon it may be that with today technology there are means to fight it. I would like in this post to consider the relevance of QR codes for fighting brand piracy.
Four kinds of stores
Consumer products are presented to us in various kind of stores.
1- Exclusive brand stores. In this case there is a list of stores that are the only stores permitted to sell brand merchandise. These stores may have a wide geographical presence but still their list is well known and brand products can be bought only from there.
2- product is delivered through many non-branded stores and the brand itself does not have any idea where the product may be sold.
3- Direct distribution when buying online products directly from the brand. This option is relatively safe since you know you are buying from the real brand.
4 -Buying online from a reseller (not directly from the brand). In that case you have no idea regarding the authenticity of the product you are going to buy, unless the reseller is well trusted.
Why QR codes?
Mobile phones armed with camera are available to most consumers when making purchases today. This is true whether it happens in malls, in flea markets or even when buying online from a computer or mobile device on the go.
QR codes on the other hand are very easy to interact with having a phone. That means that with a right QR codes system a potential buyer will be able to get a quick answer regarding product authenticity.
QR codes have another important attribute; they can contain a vast number of digits in a relatively small area. A version 2 QR code can contain 77 digits in a Low EC and 34 digits in a High EC. In a mixed mode (where both letters and digits are used) a version 2 QR code (Low EC) can contain for example 16 alphanumeric characters -for a web site, and additional 44 digits for a unique serial number. Let’s take for a moment only 30 digits for serial number. This means that a company can produce randomly 1 Billion different serial numbers with the probability of less than 1 out of 1 Billion Billions to guess one number from the series at random. This is a much lower chance than winning any lottery, and if you have this chance than congratulations you are able to fake one item of the series, you can send only one fake copy.
How it works?
For the first case where only branded stores can sell the products, a QR code of the brand and location info will do the work. The QR code can be on a membership club card or simply in the user phone – taken from the brand site for example. In that case the user in the shop simply scans the code from his card and gets a confirmation from the brand that the store he is in is a legal one. Location can be sent using GPS or Wi-Fi connection Id or any other way (like triangulation or IP).
Additionally the items may be tagged with QR codes as suggested for the stores from the second kind, where product may be purchased from non-branded stores.
When QR codes will be used on non- branded store, we will put a different QR code on each product. Let’s assume that we are encoding until 20 letters for URL and 30 digits for serial number. We will take shirts for example and we are going to put a unique QR code on an internal label of every shirt. The QR code contains a URL to the company site and a series of 30 digits generated randomly by a computer program and kept on a database. To check authenticity the user scans the QR code and is taken to the company site with a description of the product and a statement regarding the legacy of the code and whether it is still available for buying. When scanning the code, the location of the scanned item (using for example GPS/Wi-Fi connection id or other means) is send to the URL with the code data.
When a person purchases such an item, the cashier scans the code with its special software (with a phone, iPod touch or any other handheld scanner) and removes the item from the pool. At this point the user scans again the QR code to assure that it has been deleted (meaning that the merchant uses the authentic software of the brand).
For shops of the fourth type – buying online from a reseller, check the code when getting the product. After confirming the code, the company site might ask you for your details, reseller details and keep contact with you if you wish so. In that case it will remove the code from the items for sale list (check for this also later). In case there is no code or the code takes you to a false website or even scanning the code still tells you it is for sell – cancel the deal.
I believe that brands will allow you to type the serial number into a form on their website and tell you whether the code is authentic. Although typing all these numbers it is not a pleasant experience, it may be worthwhile for expensive items where quality is important.
To check out the robustness of the suggested system we must look into possible scenarios that pirates may try, in order to overcome the suggested system. Let’s see some of them.
Strategy 1- Steal the codes
In this scenario a pirate agent enters the store and takes pictures of all labels on the shirts. Assuming he is a real professional and he is not being caught, he handles the photos and all the labels are printed on fake shirts pushed into the market.
Another way is trying to steal the codes through a computer program checking them online. This method has less chance since the constant queries coming from same source will draw immediate attention not to mention the amount of time it takes to check billions of billions of codes.
Now when a customer scans the code he/she is directed to the company website and gets a statement on the legacy of the code (being a copy the answer will be –legal) and whether it is still in the pool for buying – (let’s say a fifty/fifty chance). The location info is the key factor here, the location is not the location of any legal store – the user may be asked in that point to report to the company on the fake store for further checking. This may turn out as a new tool for revealing fake stores or stolen property.
In case that no location info is available the user can still check after purchase that the item has been taken out from selling pool. To be able to fake this pirates must hack the brand database which is another hurdle they need to overcome without getting caught.
Stealing the codes strategy has too many flaws and most pirates will fail to overcome all of these obstacles.
Strategy 2 – Faking the codes
Here the pirates print a whole parallel line of fake codes which point to their site that looks very similar to the real company site. From now on all goes well even deleting the items from their database after the purchase.
The good thing in the suggested system is that it is neither expensive nor too complicated to execute. This is the reason why pirates can emulate the system quite easily.
How do we overcome this?
The answer is simple. Look at the URL of the website you are in. All big brands have a simple distinguished domain. If in doubt try browsing to the expected brand site and see whether that one exists.
From the two suggested strategy – it looks like the second way has a better chance to fool people. Consumers will have to check the URL and there is a chance that many will fail to notice. However if one person notices and reports the case the pirate store may immediately be in trouble.
Fake brand stores are a big issue; look at the following links for example.
Please feel free to comment on the suggested mechanism. It may help to find an even better solution for fighting this phenomenon. After all we all want to live in a better world…