Announcer: Once again, david muir and 20/20. We reported on fakes before, fake purses, fake watches, knock-off shoes, have you heard of a super fake, super costly and super close to the real thing.... See More
Announcer: Once again, david muir and 20/20. We reported on fakes before, fake purses, fake watches, knock-off shoes, have you heard of a super fake, super costly and super close to the real thing. Turns out they are fooling even the experts. And our own correspondent, too. Reporter: Hidden cameras, pushy salespeople. Really pushy! Knock-off designer handbags for sale on the asphalt aisles of canal street. New york's semi-secret world of counterfeits. Which one? Reporter: Where fake never goes out of fashion. But grinchy grifters are everywhere this holiday season. In georgia, just this week police shutting down bad santa retailers saying, "faux, faux, faux." Fake pocketbooks in hidden showrooms worth $20 million. If only they were real. On new york's fashionable fifth avenue, the inspiration for all that copycat couture. Genuine dior, chanel, coach. Like a mantra for people with too much money. Gucci, prada, vuitton. The names make you say, oh! The prices make you say no. We all want bargains. We want cheaper things, so we turn around and say fine, I'll take a fake. Reporter: But not just any old fake. Our bargain buddy, mark ellwood, is back. This time spotting something new -- the next-generation counterfeit handbag. It's called a superfake. A superfake comes from a factory, either at midnight where it vanished when no one's looking or maybe it was wastage, it was supposed to be damaged and someone can slip it in their bag and take it home. Reporter: The superfake is better made, more expensive, harder to find. The term superfake was invented because essentially this fake is better than you could believe. Hand a fake handbag to an expert in bags and say is this real or not. They might not be able to tell. Reporter: In rare cases experts say some are made with handcrafted leather, genuine handles and hardware. Some may even be produced in the same factories by onlighting workers. A superfake bag is simply a great-looking bag that most people would consider to be real. Reporter: Counterfeiting expert valerie salembier gave me a pop quiz with a $900 louis vuitton handbag, and its superfake illegitimate twin. Which is the real and which is the fake? Reporter: I look into the bags, try to sniff out the imposter and take a guess. This is the real? Fake, wow. Here's how you tell. Feet. A speedy never has feet. Reporter: Right. Never has seams. Reporter: Of course, you can't see the seams if you buy online, where many superfakes are sold on fly-by-night websites. Louis vuitton outlet on clearance. There's no way a vuitton bag would ever be sold on clearance. They don't ever reduce the price if they're real. Reporter: And so a superfake would cost you what? Anywhere from $350 to $1,200. And what consumers think is, "gee, that's expensive, so it must be real." Reporter: Time to go shopping. Fashion law professor susan scafidi takes us on quest to score a superfake in manhattan's chinatown. And so grand and canal, the epicenter of the fakes trade on the street in new york, is where we are headed. We had a tip this park was a hotbed of superfake vendors. On this day, though, nothing more exciting than a game of cards. Then, a few blocks away, it begins. Sketchy salespeople, whispering their pitch. Purses? Yeah. Handbags? What kind? Reporter: We literally were just walking down the street, somebody asked us if we wanted to see a bag. I got a bit of a rush and a little scared at the same time. Well, it is a little frightening because you don't know where you're going. Reporter: And what shocked me was we didn't have to go looking for them. They found us. Like this man who carries a showroom on a smart phone. We order a classic louis vuitton speedy bag, like the superfake we saw earlier. He asks us to wait. You don't want us to come with you? There's no stores. Everything is in the back. It's hidden because it's illegal to sell it. Stay here. I'll bring it to you. Reporter: But then he spots our camera, and he isn't happy. In fairness, we didn't get a much warmer reception when we were shooting outside the dolce and gabbana store on fifth avenue, and they're not doing anything wrong. What are you doing? Reporter: I'm with abc news "20/20." Get this thing out of my face. Reporter: Is there some problem? No. r:eporte IT'S A PUBLIC Street. Right, but you have to have a permit to be doing that. Reporter: No, no I don't. Yes, you do. Reporter: We returned to chinatown the next weekend, this In five minutes we are offered designer handbags. Couture gucci, chanel, prada. Yeah, chanel. Yeah, yeah. This way right here, please. Reporter: We choose from a menu with pictures of designer purses. Should we ask to look at a couple? Um, what did you see the most? Do you wanna look at chanel? Let's see. Reporter: We reject several garden variety fakes. I'm not loving the quality. And it doesn't even smell like leather. No. It smells like a tire. It smells like glue. Reporter: And as you had warned us, they offer the cheaper stuff first and you have to really ask for higher quality. At every turn, we are approached by sellers hawking other dodgy designer goods. Watches? No, thank you. Reporter: But we stay focused on finding a superfake. Feel how soft. Reporter: Finally we are offered something special -- a chanel bag. That's beautiful. That's nice. Reporter: The real thing goes for nearly $5,000. A run-of-the-mill fake might cost 30 0r 40 bucks. But this one wasn't nearly so cheap. How much is this one? 600. 600 is the highest price I've ever heard quoted on the street. Can we give you $200? Which one? For the chanel. No! Okay, $500 and that's it. Reporter: We haggled and got the price down to $430. All right, we'll do it! Reporter: They even agree to take a credit card if we throw in a 10% tip of $43. A souvenir shop in the neighborhood runs the charge. We are now the somewhat ashamed owners of a superfake handbag. It has surprisingly authentic details. Down to the card with a serial number which further checking showed was also fake. Well, we did it! Congratulations. Congratulations, I have a superfake! Superfakes thrive because no one has any sympathy for a big handbag brand. No one thinks, "oh, that poor company, it makes so many millions, I wish they could make a few more million." So, I don't think there's very much guilt associated with buying something that is totally illegal. Reporter: But a little guilt might be a good thing for shoppers. Even if you don't mind the moral equivalent of shoplifting from designers, you may care about how much misery counterfeiters are spreading with your money. Certainly we have evidence that it's gone to fund organized crime, that it's gone to fund terrorism. If you put your name on the label, you are going to be more concerned about your factory standards than if you are putting somebody else's name on the label and faking it. And that does lead to all kinds of labor abuses, including child labor. Reporter: That's a lot of bad karma to carry around with your brand-new fake handbag. And besides, it doesn't go with your shoes.
This transcript has been automatically generated and may not be 100% accurate.