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Setting

A world like ours, plus the usual magical masquerade, in an european capital (not decided which one yet).

This is for a story following a few families, each with one type of powers. The members of one of them can create and alter objects. Their powers include duplication, repairing, random generation, etc.

I would like for this family to make a living from these powers.
My solution would be for them to own a store selling the objects they created. Maybe the most realistic would be some kind of second hand store or pawn shop. They could cook the books and actually buy stuff from time to time.

Problem

How difficult would it be for the owners of a store to hide from neighbors, clients and tax collectors that the majority of their wares comes from nowhere?
Would it be realistic for this scheme to last for several generations? How far back in time can I make it go?

English isn't my first language, please tell me if any clarification or correction is needed.

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    $\begingroup$ Why would they need a store? Couldn't they just keep duplicating money whenever they needed it? The just need one of each bill in their pocket and BOOM, infinite cash for any purchase. $\endgroup$ – TitaniumTurtle Mar 12 '20 at 20:03
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    $\begingroup$ Instant cash with the same serial number. Best not to use that too much. $\endgroup$ – Mark Storer Mar 12 '20 at 20:31
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    $\begingroup$ Why would they hide from tax collectors? Mafia is fully aware that this is how they got Al Capone. So they put fake bar (because they can easily claim they sold $5 bottle for $200) then they pay taxes from that and are all set. Books are clean. The tax have been paid. Read how money laundering work. $\endgroup$ – SZCZERZO KŁY Mar 12 '20 at 21:16
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    $\begingroup$ @TitaniumTurtle I'd like them to use their powers to make just enough money to look like members of mundane society, for as many generations as possible, until a police investigation starts on one of their relatives and the actual story begins. The "physical store" part happens to work well with the plot. $\endgroup$ – MoonMoon Mar 12 '20 at 23:58
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    $\begingroup$ The pporest cobbles weren't poor because they spend money on resources. They were por because no one bought their stuff. Your people would face same issue. Also as you see tax collectors are interested in acutal incoem to get their share. If they don't feel cheated they don't have need to check. And that's how bank can be establlished 300 years ago. $\endgroup$ – SZCZERZO KŁY Mar 13 '20 at 7:19

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I've run a small retail store for over a decade.

This is a complete non-issue.

  1. Tax authorities don't care one whit for deliveries, nor vendors, nor for whatever accounting system you use. All they care about is that the books match the tax receipts that they are owed. Lots of legitimate non-magical business lack vendors and deliveries.

    Other investigators (like the Police) only get involved when a crime is alleged. And even then, they only look for evidence of the crime. They usually don't model the entire business workflow or cash flow. Note that in the USA, access to non-tax-related business records generally requires a search warrant, which in turn requires probable cause.

  2. Nobody notices deliveries, and especially won't notice a lack of deliveries. I am also a nosy neighbor. There are shops adjacent to mine. In over a decade, I cannot recall any of them getting a delivery. Because deliveries, if any, are just part of the noise of daily life that everybody screens out. Maybe both got one yesterday, and I screened it out...and I pay attention to my street. I also don't notice the garbage trucks when my dumpster is not full.

  3. Many inventories lacks a paper trail for completely legitimate and understandable reasons. Old inventory may pre-date the oldest retained records (normal records are NOT kept forever). Merchandise often lacks tags or labels. Invoices frequently lack insufficient detail ("500 bowls"). Bins of parts and small items may come from many different vendors. Success in business comes from tracking what is important, not from tracking everything in pointless detail.

  4. Lots of legitimate, profitable businesses are not run in a way that you or I might consider "reasonable". That doesn't mean they are shady - they keep the required records for the required time, they pay their taxes, they don't defraud customers. That's really all the the law requires. They could be hopelessly mismanaged...but still legitimate and lawful.

The family does not need a set of false books. They don't need sham deliveries. They don't need to trick, fool, or conceal anybody beyond what the plot requires.

They are not doing anything wrong. Just don't lie on their taxes, and nobody will question or care.

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  • $\begingroup$ Comments are not for extended discussion; this conversation has been moved to chat. $\endgroup$ – Monty Wild Mar 18 '20 at 3:30
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This would be very easy to do, especially if they make legitimate purchases from time to time. They just have to be the right kind of purchase. Easier still would be to sell services as well as goods.

The right inventory sources:

If they buy things with unclear contents, it's harder to notice that the specific goods they sell are coming from nowhere. The antique store is a good idea. If they buy out old storage lockers, there won't be many people who could demonstrate that the inventory inside should not have included a bunch of specific items.

If they deal in salvage (old shipwrecks, or other things that no longer have "owners" in a legal sense), it's also hard to prove that something they sell is something they didn't find.

The family might have trouble buying enough things like this to sustain the illusion of a high-income shop over a long period of time, but that's another matter.

The right goods:

Some goods will be difficult to track by nature of what they are. Famous paintings are a good example: if a painting is stolen from a museum, owning that painting would be a risky proposition, and so a wealthy art collector with the right contacts might spend a lot of money on the painting but not be in a position to tell other people about it, or how they got it.

If your magical family is... loose... with the law, they could potentially make copies of famous artworks and distribute them as though they were the originals. The buyers would have every reason to help keep the transactions secret (including covering up what they bought), but also would not be in a great position to discover that they'd been tricked into buying one of many copies. The actual business (well, in this case the front) wouldn't even need to engage in much commerce. Selling artwork can generate millions of Euros of income, enough to live on for long periods between sales.

Services:

Intangible services are really unclear in what they're "worth", and it can be difficult, or impossible, to prove that someone didn't receive one. If people "buy goods" but are officially charged for the service, you can inflate the cost of the service to make it less clear what inventory you're selling. A pop-culture example of this is

The carwash used by Walter and Skylar White in a later season of Breaking Bad. Their problem was laundering money, but they sold regular car wash services, then recorded them as more expensive types of washes, and it would be very difficult to prove that someone didn't buy a deluxe wash five months ago.

That's a bit harder to mix physical goods with, but they can trade in goods while also hiding their actual inventory of those goods more easily that way. If we go back to the art dealer example from above, they could also provide vaguely defined "consulting" services. The cover story is not so important, as long as the amounts charged are reasonable. If someone buys a "rare" painting for one millions Euros, but it's billed as a professional inventory and art-preservation advising service, the actual sale of the painting won't show up on any records, and it will be hard to prove the "consulting" was worthless or non-existent.

Bespoke commissions:

There's no reason the things this family sells need to be mass-produced or generally available goods. A job where people request specific items be made, and those items require hard-to-value inputs like artistic skill or carpentry experience (for example), can do lots of inventory and value tricks.

If they run a mostly normal business, but use magic to save on labor costs and time, they can make great money while still having a totally valid stream of raw inputs. Exactly how this works as a secret approach depends on the limits of the family's powers, but there are tons of ways that they could be more productive than a typical business when creating objects is magical.


How long could it go on?

As long as you want, really, and it gets easier the less money the shop has to make to keep up appearances. But there are easier ways to make a living with magic in the mix than running a secret shop for generations. Much easier would be to use the magic to generate a large amount of wealth, and then simply be a wealthy family indefinitely.

Generating that wealth secretly would have most of the same problems as above, but it wouldn't have to be maintained for anywhere near as long. Once they have the money, and the money is clean enough to use, that's the end of questions.


It is important to note, however, that because they are definitely not engaging in normal commerce they will never be able to have perfect camouflage. It might be very inconvenient to discover, and it might not even be discoverable without someone specifically looking for discrepancies and being lucky at the same time. There will be something abnormal about their business, or else they are just running a normal business, which in this case they specifically are not.

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  • $\begingroup$ Thank you! Mixing goods and services is a great idea, and goes very well with a few of the possible powers. For now I'm not set on the exact details of the magics ; I just need for them to look like a middle-class family until the main plot happens and the police starts to look into their store. $\endgroup$ – MoonMoon Mar 12 '20 at 23:49
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    $\begingroup$ @Hobobobiba Everyone is guilty of something if you look closely enough. The goal is to never give the authorities a reason to look too closely at you and, it they do, throw them a small bone so they don't dig deep enough to find the big ones. $\endgroup$ – StephenS Mar 13 '20 at 18:54
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Layers and layers

The key to maintaining a masquerade is to make use of other people's confirmation bias - that they are inclined to see what they expect to see and to readily accept that as "the explanation" for the state of things.

People who go into a shop expect to see a place where they could buy stuff if they wanted to. A shop with nothing to sell, or only selling one thing, would be suspicious, but this is not that. As long as the items are there, and they can buy them in an 'innocent' way, they will be happy and unsuspicious. That means if the shop accepts credit cards, it should do so professionally and not make the customer uncomfortable; if it's the sort of shop where it would be reasonable for it to be cash-only, that's fine.

Even people who live near a shop are unlikely to notice if the shop never received deliveries, because it's not really in their conscious. A pawn shop is a really great idea to further soothe the concerns of these observers, because even someone who watches the shop a lot can't tell the difference between a customer who enters the shop to buy something and one who enters to sell; the fact that rather than 50/50 the ratio is 100% buyers is not obvious or suspicious.

To the tax authorities the same rules apply, except their 'view' is paper rather than physical. Cash-rich businesses like pawn shops are notoriously easy to 'cook the books' as cover for organised crime (or just ordinary tax avoidance), so that's what they will be looking for. Their suspicion is going to be that the goods that claim to have been sold never existed, and the recorded profits are actually just criminals handing over bundles of cash to be laundered into clean money for the shop's owners. You actually have the opposite subterfuge: you have more goods than you should have, and the money has come from genuine customers. The entries in the business ledger that will be fake are the payments out to suppliers for goods that do not really exist.

Fortunately, as large companies like Apple and Google demonstrate, paying arbitrary amounts of money to other companies (under the same ultimate ownership) that are completely disproportionate to any real services provided, is not actually illegal or difficult, and it's devilishly hard for tax authorities to crack down on.

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  • $\begingroup$ Yes, it's mosly the tax aspects that worry me... Do you think one family-own store can afford several legal layers like that ? $\endgroup$ – MoonMoon Mar 12 '20 at 23:25
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    $\begingroup$ Pawn shops with extra goods are very likely to be suspected of trying to sell stolen goods. $\endgroup$ – Jack Mar 13 '20 at 3:34
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    $\begingroup$ @Hobobobiba I'm not saying that they need to set up lots of layers of protection deliberately, more that the same general behaviours protect against different people's inquisitiveness in different ways. $\endgroup$ – Stephen Mar 13 '20 at 13:31
  • $\begingroup$ @Jack Excellent point, they could sell the kind of stuff that isn't stolen too often, maybe books or bulky furniture? $\endgroup$ – MoonMoon Mar 13 '20 at 15:22
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Foreign shell company

If they've been doing this a long time (generations as you say). It would be a small matter to set up an overseas company that "ships" the goods to the store. There could be a paper trail, and you could even have deliveries sent to the store from a warehouse and then shipped back again to the warehouse to create a paper trail and the image that things are actually going in and out.

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    $\begingroup$ Unless they are willing to ship actual packages from overseas (and pay customs duties), there will be a break in paper trail. $\endgroup$ – Alexander Mar 12 '20 at 18:15
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Second hand shop

If they claim they buy goods from other people and then sell them, there doesn't need to be proof of origin. In their records, you should just have something like:

  • date
  • description of item
  • how much the store paid for it

Then they can "re-"sell the item. With the power of alteration, you could even create a bad looking item, take a picture and claim it was "restored" by the owners. Which will also justify a price increase.

This might work as a charity shop. This will decrease the need of bookkeeping for received items - you don't need to "pay" any money for them. However, I bet the owners would be under increased scrutiny by charity organisations, so it might not be a good choice to avoid attention.

Also, do not make this a pawn shop. Pawn shops' main business isn't selling second hand items but actually short-term money lending. The items are left as collateral to the credit. The credit business is even more noticeable by authorities than a charity.

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    $\begingroup$ @TitaniumTurtle you know his salary. You're interested in him. Many others would be, too. So, this doesn't really lead me to believe a charity work makes you less conspicuous. $\endgroup$ – VLAZ Mar 12 '20 at 20:00
  • $\begingroup$ Thank you, I wasn't sure there was a clear line between these two types of business in English. Would it look normal for a second-hand store to be operated by the same family for generations? $\endgroup$ – MoonMoon Mar 12 '20 at 23:33
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    $\begingroup$ @Hobobobiba I wouldn’t notice much if it was operated by the same family for generations, as children are quite often bought into stores like this on the weekend to help, at least where i live. $\endgroup$ – Bob Kerman Mar 13 '20 at 1:38
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    $\begingroup$ @TitaniumTurtle Do the majority of their employees have a $7 salary? $\endgroup$ – user253751 Mar 13 '20 at 10:18
  • $\begingroup$ @user253751 I realise I was a bit over zealous as I did the math based on the 7.25 minimum wage, rather than doing the math for annual income. I have deleted my previous comment in shame, but he still makes nearly 100 times the average employee. Note that the average goodwill employee is part time. $\endgroup$ – TitaniumTurtle Mar 13 '20 at 17:30
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It will be very easy to "stay under radar". It will be very hard to conceal irregular activities if an organization like FBI (with or without Fox Mulder) would start looking into things.

Unless someone who's working in the shop will alert the authorities, or shop owners get involved into some real crime, there is very little chance that authorities would be bothered about the origin of merchandise. As other people already mentioned, authorities are concerned only that taxes are paid, and local ordinances are followed. If the shop is not taking on considerable amount of credit from banks, there will be no private audits either. Operations can continue for generations, and no one would suspect anything.

On the other hand, it authorities are alerted to take a hard look into shop's operations, it would be very hard for it cover the tracks. It would become clear that either merchandise supply paperwork does not exist, or it is falsified. Shop owner still can get away by admitting their sloppiness and pay whatever fine that is required. But going forward with business as usual after that would be impossible.

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  • $\begingroup$ That's great! My story actually starts when the police look into this specific store for the first time ever. Do you think it would be realistic for a store to have never been robbed for several generations? $\endgroup$ – MoonMoon Mar 12 '20 at 23:30
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    $\begingroup$ @Hobobobiba if the shop is in a quiet area, and owners are tight with security - why not? $\endgroup$ – Alexander Mar 12 '20 at 23:37
  • $\begingroup$ Keep in mind that police probably don't have robust electronic records going back several generations, and are unlikely to check physical records (which probably also aren't robust) going back for decades. Even if going crime-free for generations is unlikely, the police won't immediately realize that is the case unless they start investigating the business's history...which may happen if they believe the business is criminal. $\endgroup$ – Brian Mar 13 '20 at 19:00
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    $\begingroup$ @Hobobobiba Fairly plausible. Alternatively: even if they have been robbed, assuming there weren't outright eye witnesses who call the police, it's probably within their powers to just hide the fact that they've been robbed entirely and never tell the police: they can magic up some replacement inventory, repair whatever visible stuff got broken (magically or otherwise), and never tell the police at all. $\endgroup$ – user3482749 Mar 13 '20 at 19:06
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Your family deals in raw materials. Maybe at one point in history they were foresters who worked a patch of forest and produced firewood, mushrooms, lumber, animal skins, etc. Maybe at another point in history they acquired a mine and produce iron, or copper, or gold.

In this way they don't have to explain where the excess comes from. The wood comes from the forest. The fish come from the sea. The gold comes from the mine. They just appear to be exceptionally good at producing those goods.

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While agreeing with Kilisi's answer in general, jewelry would be a bad choice. Jewelers keep track of gold and gems. It would be quite obvious in even a superficial view of accounts if the weight of gold sold were greater than the weight bought, leading to suspicions of melting down stolen jewelry.

Instead, I suggest picking a craft with relatively low value inputs, difficulty matching output quantity to inputs, and substantial value added in the form of labor.

An obvious example is ceramics. Bulk clay is cheap. Drying and firing reduces the weight, and there is always some waste. It would take careful analysis by an expert to find out if the quantity of clay, glazes, paints, and electricity for a kiln are enough for the quantity of product sold.

There are several ways to make duplicated objects look hand made. The easiest is if their powers include altering finished objects.

The family would need new designs as tastes change. If they offer their children clay to play with, and encourage any signs of talent, each generation or two will probably have a competent ceramic artist. A few instances of each candidate design go in the shop. If they sell, add that design to the regular duplication process.

The main business expense will be salaries for family members working the shop or "making" the product. Keep those reasonable, in terms both of hourly rate and hours worked relative to product sold. The profits are divided among the family.

Weaving would also work. The shop would sell hand woven rugs and decorative hangings. One advantage over ceramics is if they buy more thread than they actually use they can burn the surplus. Clay is harder to dispose of.

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The Store Itself

Looking at the store:

  • They have income from the items that they sell.
  • They incur expenses for all the other things that they normally would from operating -- wages, benefits, store upkeep, etc.
  • They are not against paying their fair share of taxes
  • They wish to avoid others prying into their affairs and practices.

Those four points stated, as long as they fill out their paperwork properly there is no reason for them to really worry about it. They still claim revenue and expenses, and the difference between the two is the profit that is being made. Their only concern is being randomly chosen to be audited, and so long as they can prove that what they reported is true, they will not have issues from the tax authorities.

If there is anyone to worry about, it is others in a similar business as without supplier expenses, they are making more profit than others in the same sphere of business. Business insiders will want to know the secrets to their higher profit margins and/or lower prices.

The other main issue will be copyrights and how not to get sued by people whose things you have copied. If the store is stupidly selling copied iTech, then you can be sure somebody will look into them. This can be solved by making the original yourselves and copying that.

The Masquerade and You

In reality, the difficulty of their task is directly related to how far the Masquerade goes in your world. How far does the magical population infiltrate the normal world? Conversely, how many mundanes (or mostly mundanes) know about the supernatural and work to keep the masquerade? What effects are there to preserve it and how far do those effects travel from the source?

If there are aware entities in the government content to allow it to stand, then there is little this family needs to worry about. They will not get randomly audited. If they do get audited, it will be by somebody aware of the supernatural that will understand why there are no stock intake receipts.

If there is no support there, then they might set up a second business separate from the store that manufactures the items that are being sold by the store. Of course the same issues above now apply to this store, but instead of stock, it is the resources needed to make the things they are shipping out.

Clients are not going to care about where you get the goods unless they have reason to be suspicious that they are not getting what they paid for or if they thing it is breaking their moral code. After all, the whole point of the Masquerade is that the mundane folk don't realize how your doing this. They will buy your wares so long as the price and service are up to their standards and you don't advertise that you sacrifice kittens to power the spells that create your goods.

Neighbours are pretty much in the same space as clients in this regard. The only caveat with neighbours is that you don't do the magical things where the neighbours have a chance to see it. This means that there'd have to be some incredible spy efforts for a neighbour to find out you are conjuring copies of whatever it is this week.

Overall, if they are careful about preserving the Masquerade as it is, then there should not be an issue with hiding your conjuring from others. That is possible to do for centuries as all that takes is a back room or basement to do your magic in that is away from prying eyes.

Timelines

This kind of thing could have been done for a long time. The exact methods used would evolve based on the world around them and the masquerade that is being upheld. The trick is to do what you can to alleviate suspicion that magic is going on. This also includes the family not magically copying things that will garner them attention -- currency coming to mind the most.

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  • $\begingroup$ Thank you for your answer. For now I'm building this world bit by bit and try not to solve too many problems with "The Masquerade infiltrated every branch of government" option. The neighbor problems came to my mind because I walk to work in the morning at a time where half the stores in my neighborhood get delivered :) $\endgroup$ – MoonMoon Mar 12 '20 at 23:39
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    $\begingroup$ Not a problem. Government infiltration was brought up because the question did not really state how the masquerade was set up and who would be in on it, so I was trying to cover different scenarios $\endgroup$ – Haylen Mar 12 '20 at 23:49
  • $\begingroup$ That's actually what I need, since the exact limits of the Masquerade is a work in progress $\endgroup$ – MoonMoon Mar 12 '20 at 23:51
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    $\begingroup$ "If there is no support there, then they might set up a second business separate from the store that manufactures the items that are being sold by the store. Of course the same issues above now apply to this store, but instead of stock, it is the resources needed to make the things they are shipping out." - if the raw resource is something like timber, they could always just actually go out and plant/cut down trees, then just fake the number/sizes of trees on the paperwork. Alternatively, it's really easy to make surplus wood disappear - give it away to friends for firewood, leave to rot, etc. $\endgroup$ – user3482749 Mar 13 '20 at 19:13
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Simplest solution is to be your own supplier, buy raw product, perhaps gold from one family member in another country. Manufacture jewelry in the outlet. It could be anything, I just picked gold because it would be so easy.

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User535733's answer is the most factually correct, but your issue is that your readers will be expecting the lack of deliveries to be an issue, so you still want to address it somehow.

Your shop gets a small amount of deliveries and sells that, then sells duplicated merchandise the rest of the month as though it's all from the same shipment. Imagine paying for one box of lighters and selling the equivalent of five boxes. Much more profitable than a similar non-magical shop.

Family finances would probably be enhanced quite a bit if they can duplicate food and other household necessities for themselves. This means they can survive on less profit than a typical family.

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  • $\begingroup$ That's a good point, they would need to spend way less money in groceries. I'll take it into account, thank you. $\endgroup$ – MoonMoon Mar 13 '20 at 11:00
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Unless everyone lives in the same house, there will still be vehicles arriving with the new merchandise, as they do for any other shop. Who knows or notices where they come from.

Worst case, you hire a delivery van, fill it with empty boxes, and have a charade 'delivery ' of good every Monday morning. While being very secretive about your 'special supplier' because you don't want anyone else to be able to do business with them.

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An easy way to hide a magical ability like that is to use it to inflate your inventory. Run the store like any other normal store, buying your inventory through normal channels. When you take delivery of, say, 100 units of product, magically produce 5-6 more. Keep your "free" inventory a small-enough percentage of the total that it will be hard to detect and in the event someone does detect it, you can explain it away as rounding error or a typo in your ledgers.

Alternatively, pose as a group of world-class craftsmen and run a repair shop. Advertise that you can repair or rebuild literally anything for the right price. People bring you stuff that's beyond any hope of repair, and in a couple of weeks you return it good as new (with a huge invoice attached, of course). You don't actually repair anything, you're simply destroying the original, magically creating a new one, and waiting a while to give the impression that you're actually doing work.

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Multiple Shops

Have 2 or 3 shops (maybe even more as business booms). Rotate where new merchandise is created (or even have a separate warehouse) and periodically ship items between shops. All the shops receive deliveries, so look legit, and redistribute the "items that aren't selling" periodically. This basically gives you a big shell game and as long as everything else remains on the up and up no one is going to investigate.

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    $\begingroup$ The other shops can be in provincial capitals of the same country. No one in those shops need know anything about the magical nature of their production, but they can make it possible to sell multiple instances of the same bespoke item but only one instance per store, preserving the perceived uniqueness and keeping the prices higher. $\endgroup$ – Monty Harder Mar 13 '20 at 17:50
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Frame challenge:

Wait a minute, is it illegal to duplicate items like this in the first place? I mean, as long as you pay all the relevant taxes - where's the crime? You're not stealing, you're not cheating... Sure, there might be some limitations in place by law - like no duplicating of money or copyrighted works (hey, we have that already!) or smartcards or whatever - but besides that it sounds like a completely legal thing to do.

In fact, this is a pretty overpowered thing, so there might be many people who would like access to this. Like, think what it could do to a countries nuclear weapons stockpile... Or even without the dystopian angle, I think the family would actually be able to make much more money by simply offering their duplication services as such rather than keeping it quiet and acting as a shop.

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  • $\begingroup$ Hi, thank you for your answer. I didn't detail the whole setting or the reason why magical people stay hidden to not make this question too long. For now the important points are : a family has magic and doesn't want the mundane world to know, can a magically restocked shop stay unnoticed? I'll probably ask other questions relative to other parts of the setting $\endgroup$ – MoonMoon Mar 15 '20 at 13:24
  • $\begingroup$ @Hobobobiba - Ahh, ok then. If they want to stay secret then it's different. Btw - have they had this power for many generations? If so, then I think that would be a very difficult secret to keep. $\endgroup$ – Vilx- Mar 15 '20 at 15:01
  • $\begingroup$ Yes, for as many generations as I can make realistic. I haven't decided on all the details yet, for now I'm more concerned on how to keep secret their lack of supplier $\endgroup$ – MoonMoon Mar 15 '20 at 17:37

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