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Diversion Of Beauty Products

Diversion of Beauty Products is not a beautiful thing

The term "diversion" has several meanings, the most popular being a distraction, or a detour. When it comes to beauty products, however, the word "diversion" means something else.....a serious issue for retailers and consumers.

Diversion, as explained by David Craggs, President of L’Oreal USA, also means the selling of branded beauty products in unauthorized outlets, both in stores, and on the Internet. For example, beauty products marked "for professional use" are designed and meant to be sold only at company-sanctioned outlets, usually select stores, salons and spas. But these products also show up on the shelves of mass market retailers, drugstores, beauty supply shops, online stores, supermarkets, and even at flea markets. Since many of the suspect outlets are popular retail stores and places that legitimately stock products from other manufacturers, unsuspecting consumers may not realize that some of the products they are purchasing may actually be those "diverted" from approved channels. The product may or may not be the same, but the sale of diverted professional beauty products hurts the bottom line of authorized salon owners and the beauty professional. Diverted goods can hurt the consumer too.

The Cost of Diverted Goods: According to a 2001 report by FIA International Research LTD, (“Contraband, Organized Crime and the Threat to the Transportation and Supply Chain”), conducted for National Cargo Security Council, contraband markets have more of an adverse impact on society than simply the estimated losses in merchandise. There are many indirect losses, including the resources that must be allocated to fighting these crimes. Other adverse effects include expansion of organized crime and reduction in government revenue from unpaid taxes.

The Beauty Industry Fund, an association comprised of manufacturers, distributors and salon owners concerned about the growing problem of diversion, offers a link to an updated, interactive chart (utilizing ACNielsen's SCANTRACK data service), showing a historical view of diversion activity for four hair care categories, from 2000-2008. For the consumer, the cost of purchasing grey market items from non-authorized outlets, can hurt their wallet. Although "discount" or "bargain" stores advertise lower prices, undercover research has found that diverted products are rarely cheaper in unauthorized outlets. In fact, consumers are likely to end up paying significantly more than the suggested (and price-fixed) retail price in the salon.

Diverted Goods = Potential Harm: Unsuspecting customers may find that the diverted goods they have purchased are not what they appear to be. The diverted product may look the same, but it may be outdated so it’s less effective. The container and the contents may also have been tampered with, watered down, or worse, contain something totally different than what is advertised on the label. According to research done by some hair care companies, when some of their diverted goods were tested, the contents had been completely replaced with harsh washing detergent! Even if a product is the genuine article, many diverted goods aren’t meant for consumer use. These professional products have higher concentrations of some chemicals that need to be used as directed, and applied only by a trained professional. Without proper training, these products could be ineffective or even harmful. .

Caveat Emptor, Discerning Diverted Goods: At first glance most diverted goods look exactly the same as the regular products, but there are tell-tale signs that they are not. For example, batch codes and tracking codes (bar codes) may be partially blocked-out or completely obliterated so the items can't be traced. The cap or label may not match the bottle. The container might be damaged, faded or dirty, or the expiration date has passed.

How to Avoid Diverted Goods: The best way to avoid buying diverted goods is to simply to buy products from an authorized outlet. Buy through the company’s official website. Use the site to find out where there are authorized retail outlets. Consumers will be welcome to purchase products there even if they don’t normally use that outlet for services. Consumers who discover that they have purchased a diverted product should bring the item back and inform the manager that it is a diverted product, or contact the manufacturer to report it. Diversion is not a beautiful thing but helping to combat it, is!

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