Is selling counterfeit purses legal if one does not charge for name?

Any use of a registered trademark without the express permission of the trademark owner is illegal. And while a purse design usually cannot be copyrighted, some designs are so unique or are so closely associated with a particular designer that they reach copyrightable status. So if a company is selling such purses and intentionally making improper use of a trademark, they'd better have a good defense attorney on hand.

It is not clear from the facts you have provided whether or not the counterfeiter is using the trademark of the owner of the genuine purses, e.g., Gucci or other brand name. But, the issue here is whether or not the counterfeit counterfeit purses use a trademarked name or not. If so, the sale of the counterfeit purses is illegal. The sale of such counterfeit purses infringes on the owner's trademark rights built up in the goodwill (brand name appeal, quality, reputation, etc.) associated with their goods, namely purses. The counterfeiter is taking advantage of the quality and prestige of the genuine purses by using the trademarked name to make sales of purses that can unfairly undersell the retail price of the genuine article. This hurts the trademark owner in two ways. First the trademark owner is cheated out of a sale of its goods with its associated profit margin. Second, the trademark owner's reputation and goodwill associated in its trademark is damaged by the circulation of inferior counterfeits. Additionally, this hurts the consuming public because it generates confusion in the market place as to the source of the trademarked goods. Depending on various factors, the trademark owner may be entitled to damages such as lost profit, the infringer's profit, attorney's fees, injunction and destruction of the offending articles, etc. The infringer may even be subject to criminal penalties. If, on the other hand, the counterfeiter is selling a purse that does not use the trademark name, trade dress or other intellectual property of the genuine purse trademark owner, and perhaps additionally makes it abundantly clear that their purses are not associated with the genuine article purses or their source, then there might not be infringement. This is a highly fact specific outcome and would, of course, require careful analysis by a qualified trademark attorney. As always, you should consult such an attorney to carefully explore all of the facts and circumstances to ascertain whether there is liability or not.

Total hogwash! The Lanham Act protects against such actions. If you do a bit of research on the internet for "trade dress" you will see just one of the actions that can be brought against them. There may also be infringement actions if there are design patents on the purses and as for the trademark "loophole" think about what shape our legal system would be in if it were that easy to defeat another's rights.

Absurd it is. The sale of the purse includes a sale of the trademark - just at a lower price. The owner of the trademark can sue to stop the sales and seek damages from the sellers.

Trademark law is about protecting the consumer from knock offs and confusion. Since the intention of the counterfeit goods is to trade on the good name of the trademark owner, it matters not that the charge is "not for the name/logo". This is crime by any defintion and is actionable under various provisions of the Lanham Act (U.S. Trademark Law). Your friend and her parents are sadly misinformed. There is absolutely no such loophole.