Have you watched TLC’s new Extreme Couponing show? It’s quite the circus ride through coupons, sales ads, excel sheets, grocery shopping, and the cash register. Even more so than that, there are allegations of coupon fraud by show participants.

That’s right—people have been taped committing coupon fraud and this has been aired on television. At the moment the Coupon Information Center (CIC) is investigating TLC, and the outcome is probably not going to be good. The allegation is that one of the show’s extreme couponers practiced “UPC decoding”, or figuring out which barcodes can be used for other products than what the coupon was intended to be used for within the same brand.

Unfortunately what this means for fellow couponers is that there are more strict terms to using coupons and possible store policy changes that have all ready gone into effect or probably will in the near future (a few sour grapes, right?). I’d like to first discuss the type of fraud that is going on, how to spot counterfeit coupons so that you don’t get caught up in this mess, and then ways manufacturers are changing coupon fine print in order to fight back.

Types of Coupon Fraud

There are many different types of coupon fraud, which cost manufacturers and retailers an estimated $300-$500 million each year. Unfortunately a ‘perfect storm’ has been created by the TLC Extreme Couponing show and the downturn in the economy. The result is an increase in media attention on this topic, an increase in manufacturer and government investigations of coupon fraud due to profit loss, and an increase in coupon fraud activity committed by desperate consumers who have seen a loss in pay, jobs, and inflation. Below are several ways coupon fraud is being committed.

  • Using Coupons for Unintended Product: Companies do not refine each of the barcodes to match the specific product that the coupon is intended for. This means that some coupons meant for one type of product will not beep at the cashier if used for another type of product within the same brand. Even if the coupon does beep, oftentimes cashiers will push buttons on their machine and force the coupon through. Obviously this is fraud and costs manufacturers money; manufacturers often issue coupons for products that they are specifically looking to sell, or need to move inventory on, etc. If the coupon campaign targeted for one product is used for another product all together, then the manufacturer benefit of the campaign is lost.
  • Purchasing Coupons: Coupons have always had language in the fine print forbidding the selling of them. However, people sell coupons on eBay. eBay even has a policy that allows for this, because people are ‘selling their time’ when clipping the coupons, and not the actual coupon itself. I suspect that this will result in a lawsuit from manufacturers in the near future.
  • Creating or Altering Coupons: Many arrests have been made of people who have either altered a coupon or produced a brand new one that was not issued from the manufacturer to begin with. The most suspect ones are the .pdf versions that are circulated innocently between coworkers, family, and friends. One such fraudulent Tide Detergent coupon cost P&G an estimated $200,000 in December 2010 in redemptions.
  • Coupon Clearinghouses Redeeming Coupons Untouched by Consumers: Once coupons are redeemed by consumers they are packaged into bundles by the retailer and sent to coupon clearinghouses for sorting. Credit is given and recorded for the retailer, and then this information goes to the manufacturer who in turn reimburses the retailer. One such clearinghouse, International Outsourcing Services (IOS), milked this system by redeeming coupons untouched by consumers. They mixed these unused coupons in with the normal ones, and cost manufacturers an estimated $250 million over ten years.

Spotting a Counterfeit Coupon

As consumers, we need to become even savvier and be able to spot counterfeit coupons when we see them. Here are some clues:

  • Counterfeit and fraudulent coupons are posted on the CIC’s own version of “The Most Wanted List”.
  • Print at Home coupons that show up on the screen are suspect. Typically when you click to print a coupon online (not the .pdf versions, but the other version from a website such as coupons.com) a mini printer will show up and your coupon will print. You never actually see the coupon itself. If you do see the coupon, then suspect that it is fraudulent.
  • Printable, high-value coupons for cheap products are always a sure sign.
  • Coupons that give you a completely free product with no purchase necessary (you can get these types of coupons, but it is only safe to assume it is legit if it is through the manufacturer’s website, by mail directly from the manufacturer, or in the Sunday inserts)
  • Coupons offered for printing directly on internet coupon forums.

Changes to Coupon Fine Print

Manufacturers are fighting back. On top of offering reward money (typical amount is $2,500) that leads to the successful prosecution of individual(s) responsible for producing counterfeit coupons, manufacturers have also made several notable changes to the fine print of coupons. Because these changes are so recent, it is worth it for you to take a few minutes and re-familiarize yourself with any coupons that you typically use as they may have changed. New fine print I have come across (these include the P&G coupons, Ensure, Colgate, Scotch-Brite, etc.) are:

  • “Limit of 4 Like Coupons in same shopping trip”
  • “Limit 1 coupon per transaction”
  • “No more than four (4) coupons for the same product in same transaction”
  • “You can only redeem one coupon per day”
  • “Void if transferred, sold, auctioned, reproduced, or altered from the original” (bold represents the new word in this phrase)
  • “Coupons not authorized if purchasing products for resale”
  • “if a product costs less than face value of coupon, consumer is not entitled to any money back”

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