As coupons have taken off in popularity over the past few years, so, too, has coupon fraud. It has developed into a serious issue that has caused both stores and manufacturers to become much more vigilant in how they handle coupons and couponers.
Many of the nation’s leading extreme couponers have told Dealspotr they are concerned coupon fraud concerns have adversely effected coupon quality and some even fret it could lead to the end of couponing as we know it. There is even a major debate among the massive #couponcommunity on Instagram as to whether couponers guilty of fraud should be outed or not.
All of this best the question: What exactly is coupon fraud?
Like many things, it’s a bit more complicated than it first appears. The Coupon Information Corporation is a nonprofit watchdog that proudly counts many leading U.S. manufacturers among its members and it has a broad definition that the industry often goes by:
Coupon fraud occurs whenever someone intentionally uses a coupon for a product that he/she has NOT purchased or otherwise fails to satisfy the terms and conditions for redemption, when a retailer submits coupons for products they have not sold or that were not properly redeemed by a consumer in connection with a retail purchase; or when coupons are altered/counterfeited. These activities are almost always in violation of Federal, State or local laws.
While the above definition certainly covers a lot of ground, it doesn’t provide a great deal of clarity into what exactly is coupon fraud and what isn’t.
For example, it’s not obvious how someone could even use a coupon for a product that hasn’t been purchased. Usually when someone acquires a product that hasn’t been purchased, it’s either via theft or a donation and there is no need to use a coupon. That aside, the CIC does at least provide a baseline from which to work in terms of understanding coupon fraud.
There are certain actions that are obviously coupon fraud. They are as follows:
This one is pretty straightforward. Counterfeiting a coupon is always illegal and potentially punishable with significant jail time. There is no excuse for creating counterfeit coupons and anyone doing so is probably aware what they are doing is wrong.
The real issue for most couponers is in trying to figure out whether a coupon is counterfeit. Unwittingly using a counterfeit coupon can still land you in serious trouble and put you in the middle of an investigation.
The easiest way to mitigate the danger of unknowingly using a counterfeit coupon is to only use legitimate providers for your coupons and always source them yourself. If you do get a coupon from a friend or acquaintance or find a printable coupon online, always do some research to verify its authenticity first and avoid the ones that appear too good to be true.
Very similar to counterfeiting, copying or duplicating a coupon is also considered fraud. Not much explanation is needed: You can’t make photocopies of a coupon or print an online one multiple times. This should be a no-brainer for any couponer.
Nearly every coupon comes with terms and conditions. Changing those terms and conditions and trying to pass off the coupon as authentic is fraud. It doesn’t matter if you are trying to alter the expiration date, the discount amount, the eligibility requirements or even the product itself; it’s not allowed. Plain and simple.
Deciphering whether the terms and/or conditions have been changed can be very difficult, however, depending on the skill of the perpetrator. Again, we recommend being very careful when you plan to use any coupon for which you don’t know or trust the source.
Coupons typically spell out pretty clearly how they can be redeemed. If a coupon states that it’s only eligible when you buy two products or that it can’t be used for certain products, then you need to abide by those rules.
Many times, couponers, especially newbies, are just being careless or don’t understand the terms and are making an honest mistake. When this happens, the store will almost always just inform them that the coupon doesn’t work the way they are trying to use it and that’s the end.
The problem comes in when scheming couponers attempt to incorrectly redeem a multitude of coupons in hopes the store will either not notice or the cashier will let it pass. If caught, the couponer can face legal action.
New barcode technologies have largely thwarted this behavior, but it still bears mentioning. It first became widely known beyond the couponing community when a star from the TLC show “Extreme Couponing” famously admitted to the practice.
Basically, it’s a technique in which a couponer uses a coupon specifically intended for a more expensive product on a less expensive product from the same brand. For example, you might use a $2 off coupon clearly meant for a full-size tube of toothpaste, on a $1 travel-size tube to get it for free or even collect cash-back from a store like Walmart that allows overages. Older barcodes often failed to detect when this happened and cashiers often didn’t realize the mis-use.
There was some debate as to whether this was fraud, but a judge in Pennsylvania left no doubt in 2013. He ordered a pair of Walmart customers who utilized the strategy to net nearly $2,300 in overages to community service and forced them to pay back all of the overages, reports Coupons In the News.
Theft is just about always illegal, whether it’s a $1 newspaper or a $100,000 car. Don’t go to a rack and pay for one newspaper, but take 10. Likewise, don’t go cruising around the neighborhood snapping up everyone’s paper. Even dumpster diving can be considered trespassing, depending on the location of the dumpster.
Illegally hacking an e-commerce site in order to use fake coupon codes is fraud. Nothing else needs to be said.
While many cases of coupon fraud are cut-and-dried, there are times when it can be tougher to determine if an action is actually fraudulent. Those are detailed below:
The concept of coupon acquisition is a major gray area. It is undeniable that most, if not all, manufacturer coupons state that they can not be sold. That much is clear. The nuance exists by way of clipping services. Though coupons themselves are not supposed to be sold, charging for the service of clipping, sorting and organizing coupons is generally accepted.
This is why many couponers and small businesses can get away with charging for clipping services in which they are technically selling their process for managing coupons rather than the individual coupons themselves. Some couponers also try to skirt the issue by saying they are selling the binder or the envelope and the coupons which are inside are free.
Yet another murky area. It is totally acceptable for you to re-sell an item that you’ve purchased. Otherwise, garage sales would be illegal and Craigslist wouldn’t exist. Where it gets tricky is when you cross over from selling an item or two into establishing your own unlicensed “store”.
You start getting on shaky ground when you keep an entire basement or garage full of stockpile items that have price tags and you welcome customers in to buy those items. Especially when you used fraudulent coupon methods to build the stockpile. Just ask Michigan resident Amanda Snuggs who got 20 months in jail for doing so in 2014. (via Coupons in the News).
Technically, the practice of trading manufacturer coupons is not usually permitted. That said, it’s not a big issue if done between friends and family on a small scale. If your husband mistakenly threw away your Sunday newspaper and you swap an old shampoo coupon with your sister for a recent hair color coupon, nobody will care.
The problem comes in if you engage in large scale exchange operations with others. That could land you in trouble with the law if the wrong person notices.
On occasion, a manufacturer or store will make a mistake when releasing a coupon. It might be a situation where they have a typo and put $10 off when it was intended to be $1 off or it could be an issue where the barcode is ringing up a 50% discount instead of a 5% discount. Regardless, when it’s an obvious mistake, it’s incumbent upon couponers to handle themselves respectfully.
If it’s an online transaction, the store may cease all shipments, return your money and refuse to acknowledge the purchase. For in-store purchases, it can be more challenging to determine how the issue would be handled or treated legally, but is it really worth the hassle of being dragged into a dispute?
In cases where the store mistake in favor of the couponer isn’t immediately obvious and is for a small amount, then typically it’s not a big deal. At that point it would pretty much be up to the couponer’s own ethics to decide whether or not he/she wanted to notify the store.
One of the greatest parts about couponing is stacking. It’s totally fine when done properly and a fantastic technique for saving lots of money legitimately. When done incorrectly, however, it can cause a whole host of problems.
The best way to ensure you are legally stacking coupons is to check over the store’s coupon policy. There are some general consistencies across most store’s stacking policies. A good rule of thumb to go by is that you can’t combine two manufacturer coupons for the same item. On the other hand, stacking a manufacturer coupon with a store-specific coupon on an item with an already reduced sale price is acceptable at stores like Target and several others (unless indicated otherwise for a particular product) and is often the key to nabbing a huge bargain.
