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Two investigations into the company have shown that yes, there are fakes on The Real Real, the preeminent luxury consignment site.

CNBC and The Capitol Forum have alleged that not everything on the site has been reviewed by an authentication expert, causing some customers to spend hundreds of dollars on what turned out to be mislabeled or counterfeit goods.

It is outrageous that public companies are deceiving their customers on such a big scale.

Our review makes the case against buying luxury goods from resellers for some time. The straightforward thing to do is to purchase authentic quality replicas and make the exclusive purchase of the genuine investment bag at a flagship store Europe or the US. It is outrageous that public companies are deceiving their customers on such a big scale. They built a platform for counterfeits to be sold as authentic, a money-laundering apparatus.

CNBC talked to dozens of employees and reviewed company documents that show that copywriters working at the company’s warehouse have been tasked with authenticating some The RealReal items. The copywriters allegedly did not have formal training in authentication, which makes sense, given that they were hired to write for the site. In light of the investigation, The RealReal’s stock plummeted 11 percent.

The varieties of fakes range from mislabeled designer goods to outright knockoffs.

CNBC interviewed one woman who bought a mislabeled Loro Piana scarf for $537, which she believed was valued at $3,325 because of how the site labeled it. The scarf was Loro Piana, but the price tag left on it was from a woman’s jacket that cost $3,325. Another woman, Cherish Garcia, ordered a PRADA dress, but when it arrived, she saw it was made with cheap fabric. Compared to her other PPRADA dresses, it was definitely a fake. “I think maybe they’ve just gotten too big and are not willing to put the time to really check each item,” Garcia said to CNBC. The varieties of fakes range from mislabeled designer goods to outright knockoffs.

The varieties of fakes range from mislabeled designer goods to outright knockoffs.

The RealReal has also come under fire for selling designer collaborations for Target and other mass-market stores as luxury goods. And CHANEL has a lawsuit pending against the company for selling counterfeit CHANEL goods, although, according to a former employee, all CHANEL goods are sent to be authenticated by the official authentication team.
Chanice Parchment, a former employee, told CNBC that there’s a hierarchy of what’s sent to be authenticated by “experts” and what’s verified by copywriters. Copywriters authenticated PRADA clothes and shoes, but the PRADA bags and wallets went to the authentication team.

“It’s so much product. It’s tough for someone to properly authenticate something when they’re not probably the best qualified to be even doing that in the first place,” she said. “And they’re being rushed to hit a goal.” An internal document revealed that the daily quotas were intense: 105 ready-to-wear items in an eight-hour shift, 131 for a ten-hour shift.

If you’re paying hundreds of dollars on a HERMÈS scarf, you don’t want it to be authenticated by a copywriter.

In general, when you’re buying consignment, there’s an element of “buyer beware.” Your run-of-the-mill neighborhood consignment shop likely doesn’t have a horologist in the backroom. The RealReal, however, really hammers home that everything, 100 percent of its stock, is authenticated. It’s a huge part of the brand, which is big business: according to MarketWatch, the company had 543,000 active buyers this quarter, with an average order price of $438. And if you’re paying hundreds of dollars on an HERMÈS scarf, you reasonably don’t want it to be authenticated by a copywriter who has 104 other items to verify before they go home.

The article was originally published in thecut.com.