How Will The RealReal's Labeling Mistakes Affect The Resale Business?

In 2003, Target introduced an innovative design collaboration with Isaac Mizrahi, who at the time was selling his clothing line in Bergdorf Goodman, kicking off the hysteria that would be come the high-low collaboration. Since then the big box-retailer has introduced partnerships with designers like Rodarte, Alexander McQueen, Missoni, and most recently Vineyard Vines for a taste of luxury at a fraction of the price. In the resale market, the pieces from earlier high-low collaborations are now considered high-ticket relics from a distant past — except, as Fashionista discovered some are being mislabeled.

"Since its inception in 2011 as a premiere resale site for contemporary and luxury fashion labels, The RealReal has listed and sold hundreds of items designed by Prabal Gurung," Fashionista published on Thursday. "(A dress similar to the one seen above is listed at $1,695.) However, this isn't a genuine Prabal Gurung dress, but a piece from the brand's 2013 collaboration with Target. It originally sold for $39.99 at the mass-market retailer."

Reportedly there are 10 different cases of items being misclassified, including a pair of Victoria Beckham for Target trousers (originally priced for $40 at Target, but selling for $275 on The RealReal); an Altuzarra for Target sweater (listed for $49.99 at Target but selling for $175) on The RealReal; and a Peter Pilotto for Target printed sweatshirt (initially priced at $29.99, but selling for $205) on The RealReal.

But how does something like this happen? One former The RealReal employee says it boils down to the amount of products that need to be authenticated in a short amount of time. Employees are not adequately trained to spot the fakes, but also, the fakes are getting better, the former authenticator tells Refinery29. As far as the items that Fashionista found that were mislabeled, the former employee says they went through the copywriting team and not the authenticity team. "They know some of the stuff but they are not really trained, and they have to do a certain number of copy per item every day," the source explained. "So its really numbers-based and they are going really quickly."

Ideally, an authentication process requires multiple people to sign off on an item. For instance, at What Goes Around Comes Around, CEO and Co-Founder Seth Weisser tells us that items go through three levels of verification. "Within this process each item is both verified as well as uniquely entered into our proprietary system to insure our needs are met to protect our clients," he says via email. "This also permits us to re-verify any single item should a question arise." Since the company's launch in 1993, he maintains it has never sold a fake item. "Our system is so programmed and secure that any counterfeit would be identified."

Vestiaire Collective operates in a similar manner, even going as far to sign a 'Fight Against Online Counterfeiting Charter' back in 2012. "The first step of the authentication process is completed by our curation team who carefully checks all of the submitted images for any irregularities and also looks at the reliability of the seller," Vestiaire Collective's Head of Authentication, Victoire Boyer Chammard tells Refinery29. Next, she says a dedicated in-house team of experts who are trained authenticators from luxury, fashion and auction houses do physical checks. "We have specific category experts including ready-to-wear, vintage, streetwear, jewelry and watches. Quality control is also very important, so diligently checking the quality of fabric, for example, if its leather it should feel and smell like leather. As a global resale e-comm, we have warehouses in France, US and Hong Kong where authentication experts physically examine product every day."

When Refinery29 reached out for comment, a spokesperson for The RealReal provided the following statement: "The RealReal is a data-driven company and we are constantly testing new concepts. In this case, we are currently doing broader testing arounds collaborations to determine demand for us to expand our offerings. We've seen strong interest in pieces from collaboration collections by a very diverse set of brands, from Louis Vuitton to Nike to KITH. We're considering permanently accepting Target collaborations with luxury designers who are part of our accepted designer list, as they are limited-edition pieces that can be difficult to find."

Further, as the statement reads: "We recognize the opportunity to improve transparency here, so we've updated our product pages for designer collaboration pieces with more detailed information — and will do so with new collaboration pieces we offer in the future. As with all pieces sold on The RealReal, we stand behind our authenticity guarantee. As always, if a customer isn’t fully satisfied with an item they’ve purchased, we will work them to make it right."

Business of Fashion is reporting the resale industry is primed to bring in $51 million by 2023, but as The RealReal's fiasco shows us, it has quite a few flaws to work through first.