Protecting Your Bottom Line with Security Labels
September 2, 2022
What’s in a security label? Everything. Product theft, tampering, and counterfeiting is a huge problem for businesses, resulting in billions of dollars in lost revenue every year. In fact, 3% of the U.S. gross domestic product —$600 billion — is estimated to result from counterfeiting alone. This is why, for many companies, security labels are such an important piece of their marketing and distribution strategy.
You might think, “Product fraud? In my industry? No way!” If that’s you, ask yourself what a top counterfeited product looks like. Most of us might think about consumer electronics right away. However, these are actually lower down on counterfeiters’ hit lists. According to Money Talks News, the most counterfeited products are as follows:
- Wearing apparel/accessories: 18% of all counterfeit products seized
- Footwear: 14%
- Watches/jewelry: 13%
- Handbags/wallets: 11%
- Consumer electronics: 10%
- Consumer products: 8%
- Pharmaceuticals/personal care: 7%
- Optical media: 2%
- Toys: 1%
- Computers/accessories: 1%
If you are in one of these industries, anti-counterfeiting security labels are for you.
Other Pain Points from Product Fraud
It’s not just the loss of revenue that creates pain for businesses. The availability of counterfeit or tampered products in the marketplace can damage your brand’s reputation and cause safety issues for consumers. Imagine the risk to consumer health from counterfeit medications, for example, or counterfeit food. According to research from IncoPRO, 66% of consumers who have been ripped off after unintentionally purchasing counterfeit goods have lost trust in buying from that brand again.
What is the most commonly counterfeited food in the United States? Extra virgin olive oil (EVOO), which is often watered down with cheap vegetable oil and sold at premium prices.
In addition to impacting people’s health and safety, tampering impacts companies’ profits in other ways, as well. A fraudster might try to change a serial number on a stolen high-end electronic, for example, or make a warranty claim after having botched an unauthorized repair. Such fraudulent claims cost companies millions of dollars every year.
An Extra Layer of Protection
That’s where security labels come in. Security labels provide an extra layer of protection against tampering and fraud, while also providing peace of mind.
Let’s look at some of the most common types:
Void labels are one of the most popular types of security labels. They’re made from a special type of material that leaves a “void” message when someone removes them. The underlying “void” layer is extremely difficult to remove without being damaged.
Pressure-sensitive tape is a type of adhesive tape activated by pressure. When applied to an envelope, box, or package, adhesive tape creates a seal that cannot be broken without damaging the tape.
Destructible Vinyl Label
Destructible vinyl labels are made from a material that shreds into small pieces when someone tries to remove them.
Holographic labels offer an extremely high level of tamper resistance. They may be pricier than other types of security labels, but they cannot be photocopied or scanned, and because they tend to be very eye catching, they act as strong deterrents. Removing holographic labels is also quite difficult since it requires solvents or abrasives, further complicating any attempt at tampering.
Security Pattern Labels
Security pattern labels are made from a material that contains a repetitive pattern visible under ultraviolet (UV) light. When someone tries to remove the label, the UV pattern is disturbed, making it obvious that the label has been tampered with.
Radio-frequency ID (RFID) tags are small devices that store information about an item to which they are attached. These tags can be used to track the product’s location (whether products or company assets), making it difficult for thieves to steal without being detected. RFID labels can also trigger alarms if a product is removed from its designated area. When made highly visible, RFID tags can double as theft-deterrents.
How to Choose the Right Security Label
How do you spec the right security label? It starts with your budget. To evaluate how much you are willing to invest, start with your tolerance for risk.
- How much money do you lose every year through counterfeiting? Theft? Unauthorized returns?
- What is your legal liability if you deliver a product that has been improperly labeled or compromised in some way?
- What is the cost of negative public relations if your brand becomes associated with counterfeit products? Or you are fined for failing to put into place sufficient protection against unauthorized duplication or tampering of regulated products?
With this information in hand, work with your Brandmark representative to evaluate the pros and cons of each type of security label. These labels vary in terms of cost, durability, and appropriateness for each application. Security pattern labels are less expensive than holographic or void labels, for example, but can fade over time when exposed to UV light. Some labels may need to protected from elements such as water, extreme temperatures, and chemical pollutants. Others may need to be printed with serial numbers or other variable text or images (such as barcodes or matrix codes).
Security labels are an important part of your brand strategy. Don’t trust them to just anyone.
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