The RealReal under fire over counterfeit products

Recycled fashion group The RealReal is under renewed attack over counterfeits that critics claim are sold via its website, but insists its authentication process is robust.

Citing more than 200 pages of internal documents, a CNBC investigation maintains there a serious flaws in the system at the luxury goods reseller what mean it may have missed “hundreds” of counterfeits that could have ended up being bought by consumers.

During The RealReal’s third-quarter results call earlier this month, founder and chief executive Julie Wainwright said that authentication is “core and central to our brand”.

It has claimed in the past that the goods sold on its site are 100% authentic, but some aren’t convinced. Last year, Chanel sued the reseller accusing it of listing at least seven counterfeit bags.

Wainwright said on the call that all products are taken into ownership by The RealReal and are inspected as soon as they arrive at one of the company’s processing centres, with all the staff who receive goods trained to spot counterfeits.

“They use that knowledge to spot obvious fakes, poor construction, inferior material, but they also separate the items considered high risk based on brand, style, value, source – things that are on trend – and they escalate them to one of our high risk authentication team members,” said Wainwright.

The RealReal employs more than 100 of these specialists, who include “brand experts, GIA certified gemologists, horologists, handbag experts and art curators,” she added.

Other items are authenticated by copywriters who are trained in specific product categories and specific brands, and have their training updated “daily, weekly and monthly” to stay on top of the latest trends, claimed Wainwright.

Meanwhile “our quality control team pulls items to secondary and sometimes tertiary reviews to see how we’re doing,” she asserted.

CNBC says it has evidence that many of the items on the site were being authenticated by copywriters with limited training, leading to mistakes, for example one employee missed a counterfeit pair of Jimmy Choo shoes that had ‘Jimmy Ghoo’ stamped on the sole.

It also notes that after its investigation Wainwright had emailed customers saying “we strive for perfection but we may not be perfect every single time.”

She said on the conference call: “Our processes are not static. They couldn’t be static. So we continue to invest in automation, training and technology to stay ahead of counterfeiters.”