What Happens When a Jewelry Shop Sells Counterfeit Products?


Counterfeit products are getting better and better, with many people no longer being even able to differentiate between originals and fakes. For instance, the wave of counterfeit products in Florida has already affected many jewelers that can no longer sell their products. After all, while people keep buying fakes at a lower price, legitimate products remain unsold. 

This may tempt jewelers into following the trend as well: sell counterfeit products, but charge for them as if they were the real deal. Some even ask for a lower price, passing it off as a discount, so that clients believe they got a good deal out of it. But is this legal? Are jewelry shops allowed to sell counterfeit products? What happens if they are caught selling these kinds of items?

Is It Illegal to Sell Counterfeit Products?

Yes, in the United States, it is illegal to try to sell fake goods, no matter if you are a business owner or an individual selling your own items. Both federal and state laws punish this type of fraudulent activity. 

Depending on your violation, the punishment may be different. In Florida, for instance, the punishment may depend on the value or number of the items sold. Your priors can also influence the punishment that you will receive.

For instance, if you have a small jewelry shop and you knowingly sold a fake piece for the first time, you can get a fine of up to $2 million. Depending on how many goods you sold, you may also face up to 10 years in prison.

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However, subsequent offenses have harsher penalties. The fine can go as high as $5 million, and if you are the offender, you may face up to 20 years in prison. The sentence may be reduced if the counterfeit goods were sold unknowingly (and you can prove it), or if you attempt to fix your mistake before the authorities step in. 

Can Victims Sue for Counterfeit Products?

Let’s say that you bought a gorgeous promise ring from the jewelry store for your girlfriend, only to realize later on that the product was just a very authentic-looking fake. The dealer asked for a hefty price on it too, so now you are stuck with a fake along with a big hole in your budget.

If this happens, you are considered a victim of fraud and you may file a civil lawsuit. Even high-names such as Amazon and Cartier decided to file civil lawsuits against companies that sell counterfeit products, as this type of behavior goes against the law. By filing a lawsuit, you can seek compensation for your losses.

This is why many experts recommend that you also get jewelry insurance. Usually, for the insurance to be provided, the jewelry needs to be appraised – in which case, one may realize if it is a fake or not. You may want to ask the jeweler if they can provide the insurance, or you may arrange for it yourself.

What If the Jewelry Shop Unknowingly Sold a Counterfeit Product?

Sometimes, this can happen. With knockoffs such as jewelry or ornaments becoming more and more difficult to spot, even jewelers may often have difficulties determining what’s real and what’s not. Many of the pieces of jewelry in stores come from pawn shops, where the owners did not realize the pawned product was a very good fake, which can cause quite a predicament. 

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This situation can be rather tricky if you are the jeweler selling the product. The good news is that, under the laws of the United States, you did not commit any crime. At this point, once you realize that the product is fake, you should contact the client and offer them a refund. If the client is the one arriving with the complaint, you should still offer a refund once they bring proof.

That being said, even if you did not knowingly violate the laws of the United States, you are still guilty of breaching your contract. As a jeweler, you are expected to have an expert check the authenticity of the piece. You failed to hold your end of the contract, which is why the client may decide to sue if they want. 

This is fairly common in Florida right now, with many jewelers no longer being able to determine what is real and what is a very good fake. If this happens, it is recommended that you look into business attorneys in Florida. If your case is legitimate, then they can help you settle with your client, without harming your business. They may also help you recover potential funds that you may have lost. 

The Bottom Line

No matter where you are, counterfeit jewelry is punishable by U.S. law. If you suspect that you were sold fake jewelry, whether you are a shop owner or an average buyer, you may want to contact your attorney.


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