As everyday items get more expensive and inflation is still high, more and more Americans are turning to coupon and promo codes to save money. Unfortunately, as coupon usage grows, it has also attracted the eyes of criminals and thieves who run a variety of coupon scams, which can be very damaging for retailers, brands, and consumers.
Monica Eaton, who deals with the financial consequences of scams and data theft as the founder of Chargebacks911, a company that helps consumers reverse charges to their debit or credit cards after fraud, says there’s good reason for concern. She warns that any time money is exchanged, there's the potential for fraud, and promo codes are no exception.
These scams tend to hit brands and retailers the hardest, but they also can put consumers' personal information at risk. Here's what you need to know to protect yourself from online promo code scams.
Coupon fraud is a white-collar crime involving using coupons that violate the merchant's terms and conditions. "Misredemption occurs when the criminal uses coupons to deceive merchants into offering discounts, free products, or cash," explains Paul Bischoff, a privacy advocate at Comparitech, a website that provides information regarding cybersecurity and online privacy. "The coupons could be fake, expired, for a different product, or already redeemed."
There are a few types of coupon fraud, but most take advantage of a brand's or retailer’s discounting system. Here are some of the more common types of coupon fraud.
Duplicate coupons. Duplicate coupons are the most common type of coupon fraud. Someone may make multiple copies of the same coupon or use two coupons, a manufacturer's and a store coupon. We’re not talking about coupon stacking here, which is completely legal and legitimate.
Fake coupons. Because it's easy to fake logos and fonts, scammers sometimes create fake coupons, making them appealing to customers by offering deeper discounts than the store typically offers.
Coupon glittering. Coupon glittering has a cute name that doesn't make it sound like fraud, but it is. Coupon glittering games the system by using coupons in a way they weren't intended by looking into the code to reconfigure coupons so the purchase price ends up extremely low, sometimes at zero. Retailers are the ones most impacted by coupon glittering. Still, scammers also try to sell these coupons on websites and apps designed to look legitimate and on social media groups, often called glitter groups.
Stolen coupons. Bad actors may sell stolen coupons from the rightful owner for a profit. These coupons may be used for "float abuse," when someone purchases a product to get the attached coupon—to receive a percentage off a future purchase, for example—but then return the item.
Coupon scammers are always in it to swindle money from stores or shoppers. Chris Hauk, consumer privacy champion at Pixel Privacy, a group dedicated to helping people stay safe online, says that some scammers are content to hit retailers for "nickel and dime" discounts, but some go further.
"In 2021, a Virginia Beach couple was sentenced to nearly 20 years in prison combined for a $31.8 million counterfeit coupon scheme," Hauk says. "The couple copied printed counterfeit coupons with manipulated barcodes. One group of manufacturers claimed to have lost $125,000 from fake coupons linked to the scheme."
In Massachusetts, two women have been charged with making fake coupons to steal more than $25,000 in products from Stop & Shop stores. They created fake coupons—with barcodes and legitimate-looking graphics—to steal products that they resold online, mainly on Facebook.
It's unclear how many are victimized by coupon fraud. The Better Business Bureau® warns against coupon scams targeting consumers on social media, which means coupon scams are common enough to warrant an alert. So, the public should know the signs of coupon scams to avoid losing money and even their identity to bad actors.
Lisa Schiller, Senior Director of Investigations and Media Relations for the Better Business Bureau®, says that shoppers should check where coupons are coming from to make sure they are the real deal. "If you're looking for codes online, check the URL before entering your information because you could be on an imposter site," Schiller says.
Money-saving expert Andrea Woroch says that consumers also need to be careful about where they shop, avoiding public Wi-Fi networks that could expose them to fraud. "Use a secure, password-protected network when shopping online and using promo codes," she says. “If you shop on an unsecured network such as one offered at a retailer, coffee shop, or airport, cyber thieves can lurk and steal your banking/credit card or account details.”
Eaton offers a few extra thoughts for consumers to consider so they can avoid coupon scams:
Fake coupons tend to come from fake sources. They're not going to be listed on the company's official website, promoted via the company's official social media accounts, or advertised by the company's weekly e-blasts. They might come from a counterfeit site designed to mirror the real one, an unaffiliated Facebook account, or a bogus e-blast that mimics the style of the real one.
Read the fine print. The small print on a coupon offer can often reveal more than just legalese. Sometimes, it unmasks a fraudulent actor. Legal experts have reviewed and vetted authentic coupons from legitimate, large companies. By contrast, a fake coupon might not even have fine print. The fraudster doesn't care about legal safeguards because the whole scam is illegal. So, the complete absence of legally protected language or any qualifying conditions could indicate fraud.
Be wary of surveys. If you don’t know the website offering a discount in exchange for a survey response, run away. Cyberthieves will use the attractive lure of a money-saving coupon in exchange for you answering a few quick questions. Unfortunately, these scammers want you to hand over personal data they can exploit. They might claim that they need your bank account information to wire you a discount, or there's a 'nominal' shipping and handling charge or something like that. Once they trick you into sharing your data, they'll try to siphon your bank account dry.
There is help. Some independent websites and organizations fight coupon fraud. For example, the Coupon Information Center tracks new fraud cases and has resources available for consumers and retailers.
Eaton points out that online deals are extremely time-sensitive, so it's challenging for any third party to be 100% accurate all the time, but there are a handful of credible, honest sites such as Knoji, Dealspotr, and SimplyCodes that provide a fantastic resource for consumers by tracking, compiling and also verifying legitimate deals.
Shopping should be fun, rewarding, and convenient. So, by knowing what to be on the lookout for, you can protect yourself from coupon scams and save money on the items you love.
Jaime Stathis writes about tech, cybersecurity, e-commerce, career, health and wellness, and everything related to being a human being on a constantly evolving planet for Reader’s Digest, The Healthy, Wired, Bon Appétit, HuffPost and other publications. Jaime’s goal as a writer is to create content that helps demystify life’s complicated topics and live better lives. Jaime lives in New York’s Hudson Valley where she enjoys exploring the natural works and seeking out new, interesting restaurants and cultural experiences.
