How to Avoid Falling for the Couponing Scam

Lots of Coupons in a Bottle

Using coupons is perfectly legal when you or your family obtain them yourself, usually from a newspaper, magazine, retailer, local mailer. or publication which features coupons or ads with discounts for products or services. I get these all the time, such as from the Sunday paper and a local coupon book called The Grapevine, which comes out every few months. Companies offer these coupons all the time to motivate you to buy a product or service during a certain time period, and if you use their coupon, the retailer or service provider will happily give you the discount or free product offered.

But if you obtain a coupon in any other way or try to trade or sell coupons yourself, that’s when couponing becomes illegal, and it can turn into a scam involving counterfeit coupons, person identity theft, and more. In fact, the creation of scam coupons is so huge, that the Coupon Information Center, a watchdog organization established major manufacturers, estimates that the crime costs manufacturers and retailers $300 to $600 million a year. In turn, the fight against these crimes has resulted in a series of successful criminal prosecutions of coupon fraud cases, since the CIC was founded in 1985 to assure coupon integrity and work with law enforcement to go after coupon criminals. So far, as previously described, the two biggest convictions of the Talens in Arizona in 2012 and Ramirez and her associates in Virginia in 2021 involved $40 million and $31.8 million in losses respectively, and the Talens case inspired the movie Queenpins.

What’s Legal and What Isn’t

As the CIC describes it, a coupon is a “certificate with a stated value,” which is legal when used to purchase a specified product in accordance with the terms and conditions stated on the coupon. When you present it to the retailer selling the product, the retailer will reduce the cost of the product by the amount of the coupon, and manufacturers offer these coupons as an incentive to buy a product, often for the first time, and it might be virtually any product found in retail stores. The scams generally involve the coupons by major manufacturers, not the coupons from online and local merchants and from service providers offering discounts or free samples of their own products.

When you get these coupons in any of these legal ways, such as through a newspaper, magazine, or local or online store, you or your family are free to use them. But you cannot sell or transfer them to others, which means that these popular coupon clipping clubs are actually illegally trading or selling coupons, though most people don’t know this is illegal.

But the coupon clubs and sharing coupons with friends is only the tip of the iceberg when it comes to the vast criminal networks involved in selling real or counterfeit coupons, and often these criminals combine these sales with other fraudulent activity, which may include tax evasion, money laundering, drug dealing, food stamp fraud, commercial credit fraud, and personal identity fraud.

As the CIC states on its website (https://couponinformationcenter.com), “There is no legitimate way to sell your unwanted coupons. The sale or transfer of coupons is a violation of virtually all manufacturers’ coupon redemption policies. These policies are generally printed on the coupons or are available from the manufacturer upon request. Any sale or transfer voids the coupon.”

As a result, anyone purchasing coupons for resale or buying coupons from a third party is engaged in illegal activities. But that warning seems to have had little effect, since the illegal sale of real or fake coupons has become a big business, often associated with organized criminal activities. In fact, many individuals who are selling or auctioning coupon know that such sales and auctions violate the terms and conditions of the coupons, according to the CIC, so they may try to get around this by using an invalid disclaimer, such as saying: “I’m selling my time to clip the coupons, not the coupons themselves.” However, since the disclaimer is invalid, there is no legal protection for the seller or the buyer; instead, the clearly invalid disclaimer shows that the seller knows their coupon sales are illegal and subject to civil and/or criminal penalties.

In short, there is no good reason to purchase coupons from anyone, since doing so is illegal, and if you get the coupons legally, they are free. Should you buy any coupons on the Internet or from local third-party sellers, you are likely to acquire stolen or counterfeit coupons. Then, if you attempt to use them, retailers may refuse to redeem them. and you may face arrest and prosecution, since these activities are in violation of Federal, State, or local laws.

The Various Types of Coupon Scams

Yet, even though the sale and transfer of coupons is illegal, fake coupon crime has been expanding, and more types of fraudulent coupons were printed in the first few months of 2021 than in the previous decade, according a ScamBusters.org article: “Fake Coupons and Coupon Certificate Ball Scams Surge Through US.”

Here are some of the methods the fraudsters involved in coupon scams use:

· They promote a work-at-home program that involve clipping coupons or selling books of coupon certificates.

· Organized groups of dishonest consumers and criminals use these coupons to build up stocks of the products they get at a discount or for free. Then, they resell them — or often get stores to redeem them for cash, since the retailers don’t realize the coupons are fake, though later, if the manufacturer discovers this, the store will lose money.

· The scammers offer phony or cheap gasoline coupons, usually via a telesales solicitation, such as offering a set of coupons worth $200 or a discount card for a few bucks. But the sale is often an entry to an identity theft, since you have to pay with a debit or credit card, or the scammer charges your card for numerous items that cost more than the value of the coupons you purchase.

· The scammers promote a work-from-home coupon clipping scams involving clipping coupons from newspaper inserts. But they falsely claim those who do this can make a huge amount of money, which isn’t true, since coupons aren’t sellable or tradable, so the clippers will find few buyers for them and will be out any money they pay the scammers to get started in the business, typically a few hundred dollars.

· The scammers sell coupon certificate books or get individuals or charity groups to sell the coupons for them, and often they have to pay a distributor fee of several hundred to several thousand dollars for the business opportunity of selling them. Typically, these books contain 20 to 50 certificates which can each be redeemed for about $20 worth of grocery coupons, and buyers are led to believe they can sell large numbers of books with a much higher value, say $150 to $500, for up to $15 to $50 apiece. But then the buyers don’t sell very many books and lose money. And even the consumers lose out, because they don’t get the savings they expect, as a GroceryCouponGuide.com article: “Grocery Coupon Book Scam” points out. The consumers have to list a minimum number of items to redeem the certificates, so they end up with many coupons for items they rarely use. Additionally, they usually have to pay a processing fee of $1 or more with each coupon which cuts into their savings. Plus, the expiration dates are often within a month for redeeming the coupons, so many coupons become unusable. Besides, the coupons could be stolen or counterfeit. Though there are legitimate coupon book programs in which groups of retailers or service providers join together to offer discounts in a particular location, these coupons are directly offered by those offering the discounts — not by distant third parties.

· The coupon from a scammer may direct you to a fake survey site, where you have to fill in information, enabling the scammer to steal your personal identity. Or the coupon may direct you to a site with viruses that can steal your personal information or install ransomware on your computer, requiring you to pay money to unlock it.

· Still other scams may offer a great coupon deal, but to get it you have to put in your credit card or other financial information to get the deal. And then you may not even get the coupons.

· Some scammers may require you to register or give out personal information to access the coupons in order to steal your personal identity or access your online accounts. Some scammers may ask you for financial information, too, or require you to pay some money before you receive the coupons, so you not only get fake coupons but have to pay for them.

· Some coupon websites that make their offers on their websites may be scams, too. For instance, one site which announces, “Never Search for a Coupon Again,” claims to automatically apply the best coupons to your cart and to pay you the highest cash back. Supposedly it offers cash back and coupons for over 5000 stores. It even offers a $10 bonus if you add the site to Chrome. Another site proclaims, “Online savings, simplified,” and claims to offer top coupons at 30,000 online stores. With one click from you, the company’s smart shopping assistant will automatically apply discounts to your card in seconds. And the company claims it received over 100,000 5-star reviews. I don’t know if these particular sites are legitimate or not, but if they are not offering coupons directly from the manufacturers, such sites could be a scam involving counterfeit coupons or ploys to get personal identity information.

A key reason these fake coupon scams have become so huge is because the Internet has made it possible to quickly scan and print out phony coupons. As the Scambusters’ article points out, “Previously, printed coupons were exclusively distributed by mail or in newspaper inserts, enabling manufacturers to print special security codes and other anti-fraud devices, such as holograms.” But while some coupons still come by mail or in newspaper inserts, many coupons can be downloaded and printed on a home printer. So scammers can easily download, copy, and resell them, or they can use high resolution scanners to scan coupons to create templates, and later alter them to create counterfeit coupons.

The Manufacturers Affected by the Coupon Scams

The number of manufacturers affected by these stolen or counterfeit coupon scams is huge, given the hundreds of millions of dollars lost to the scammers each year. Some of the biggest ones are members of the CIC, which lists 45 members on its website. These include some of the biggest manufacturers of products sold in grocery and other retail establishments. Among them are the Campbell Soup Company, Clorox Company, Coca-Cola Company, Colgate-Palmolive, Conagra Brands, General Mills, Georgia Pacific, the Hershey Company, Hormel Foods, the Kellogg Company, Kimberly-Clark, Land O’Lakes, Nestle USA, PepsiCo Beverage & Foods, Procter & Gamble, Tyson Foods, and Unilever.

The CIC even offers a way to check on the latest counterfeit coupons issued for these companies by going to their list of Coupon Alerts on their website. The CIC also offers up to a $2500 reward for information leading to the successful prosecution of who is responsible for producing each counterfeit coupon. The Alert features an image of each coupon, along with the warning that “this counterfeit was not created by or authorized by (the named company) and should not be accepted at retail stores under any circumstances.” Additionally, the Alert emphasizes the potential penalties for using such coupons with this warning: “INDIVIDUALS AND INTERNET SITES ATTEMPTING TO REDEEM, TRANSMIT, AUCTION, POST, REPRODUCE, TRANSFER, BARTER, OR SELL COUNTERFEIT COUPONS MAY BE SUBJECT TO CRIMINAL PROSECUTION AND/OR CIVIL ACTION.”

The number of these Alerts is huge. When I checked, about 40 were posted on December 30, 2021 alone, including from Tyson Foods, PepsiCo, Conagra Brands, and Reynolds Consumer Products. Besides listing the manufacturer and product, these alerts include the value, expiration date, and a link to see a PDF with the image of the counterfeit coupon. Besides the coupons listed, there may be many other coupons not on the list, because it takes time to identify and confirm that a coupon is counterfeit, and some manufacturers prefer not to have such coupons listed. Another reason for not being on the list is that posting a counterfeit coupon might interfere with law enforcement investigations of those involved in producing it.

If you do have information about the any or the producers or sellers of the counterfeit coupons listed, you could receive a reward of up to $2500 or 25% of the restitution awarded to and collected by the CIC or its members, whichever is less. The reward is offered if your information leads law enforcement to initiate a new investigation which leads to a prosecution and/or plea agreement resulting in a restitution payment. And so far, all the defendants in CIC related coupon fraud cases have been found guilty, since the CIC began operating in 1986.

Besides seeking such help from consumers, the manufacturers now have one more weapon to combat the coupon scammers, since the CIC recently created an app which retailers, manufacturers, and law enforcement can obtain by request to scan coupons they suspect might be counterfeit, and immediately they can learn if that’s the case. The app can determine this by comparing the coupon’s bar code against those on the CIC’s list of counterfeit coupons, and if there’s a match, the retailer can immediately reject the coupon. Though cashiers are not likely to download the app and use it to check every coupon, managers and customer service staffers are more likely to use the app to check on a transaction that seems suspicious, such as if a customer is trying to redeem a great many high-value coupons. This way, retailers can check if a coupon is valid, whereas just scanning the coupon might permit it go through, though it’s not legitimate, only to later be rejected by the manufacturers as counterfeit.

How to Avoid Becoming a Victim of a Coupon Scam

Given the pervasiveness and seriousness of this scam, how do you avoid becoming a victim? There are a few simple rules to follow, courtesy of the CIC and Scambusters:

· Only use the coupons which come to you through legitimate sources, such as your daily newspaper, magazines, local stores, established online retailers, and local coupon mailers.

· Don’t pay money for a coupon or book of coupons, since the legitimate ones are given away for free.

· Don’t download coupons from Internet forums.

· Be wary if a friend sends you an email with coupons, especially if the coupons offer a high value or a free product, since these are likely to be counterfeit.

· Avoid any coupons sent to you as an email attachment, since this could be a plot to gain access to your computer and obtain personal information from you.

· Beware of any “too good to be true” offers, such as coupons offering huge discounts. For example, if most websites or coupons for a product are offering 10% off, a 75% offer is likely a scam. Or if a promo offers a $500 gift card, that is probably a fake, because it’s for so much money, according to a MySecurityAwareness.com article, “Coupon Scams Promise Savings But Deliver Spam.”

· Notice if a coupon is phony or doctored by comparing the value of the coupon with its barcode — the 10th and 11th digits should be the same as the value.

· If in doubt about a coupon, you can check the CIC’s list of counterfeits.

· Don’t accept an offer to make a lot of money buying coupon books you can resell yourself. Likewise, don’t get involved in a work-at-home program that involve clipping coupons or selling books of coupon certificates.

· Don’t fall for any deal involving the sale or purchase of manufacturers’ discount coupons.

· Don’t give out your personal information if you are asked to register or give this information to get the coupons.

· If you are offered a chance to get involved in any coupon or certificate book program, check on the organization offering it with your local Better Business Bureau to see if it is legit or might be a scam.

· Check that the coupon has come from a legitimate source, such as a company’s official social media page, website, or email, though you have to be careful that this really is from the company. For example, the source might seem to be official, but it has some slight differences created by the scammer, such as if a Facebook page called “Target Deals” is offering a fake Target Coupon, while the real Target’s Facebook page is called simply “Target,” as pointed out in a September 11, 2020 Dealnews.com article by Elizabeth Harper: “How Can You Tell If that Coupon Is a Scam?” If in doubt, before responding to such offers, contact the company through its real website or phone number to see if the offer is legit.

· Notice suspicious signs on the coupon that suggest it’s a fake. Some things to look for, according to the DealNews article, are:

o Low-resolution or graining images or logos, which could be the result of a scammer copying an image from another source.

o Different fonts, which could indicate that the scammer has pasted their own text onto a legitimate coupon.

o Typos or awkward language, since scammers may not be careful or may have English as a second language.

o A lack of specific details, since a legitimate coupon will usually have extensive fine print about when and how it can be used. For example, a legitimate coupon will normally have an expiration date, while a fake one won’t or it might list an incorrect date, such as June 31. Also, a legitimate coupon will normally list exceptions to the sale or the exact sizes of eligible items, since other sizes will be excluded.

How to Report Coupon Scams to the Authorities

Even if you aren’t a scam victim yourself, if you become aware of any coupon scams, you can report them to a number of agencies. These include:

· Coupon Information Center

· Federal Trade Commission (http://www.ftc.gov)

· Federal Bureau of Investigation (http://www.fbi.gov)

· U.S. Postal Inspection Service

· Internal Revenue Service (for tax fraud activity)

* * * * * * * * * *

The author is internationally published author and film producer, Gini Graham Scott, PhD, who has published over 200 books, 50 for traditional publishers and 150 for her own company Changemakers Publishing, specializing in books on self-help, popular business, and social issues. She is the author of The Big Con: Scams Targeting Writers, the Victims, and How to Avoid Becoming a Victim and I Was Scammed about all types of scams and how to avoid them. She has written and executive produced 18 feature films and documentaries, featured on the www.changemakersproductionsfilms.com website. An inspiration for this article is that Changemakers Productions is now raising money for its first horror film Dark Cabin, which features 6 friends on a vacation up against Viking ghosts. It’s filming in the New York area in February 2022, and other horror films are planned. She also writes books and scripts for clients. Her website for writing is at www.changemakerspublishingandwriting.com.

For more information or to set up an interview, contact:

Karen Andrews

Executive Assistant to Gini Graham Scott

Changemakers Publishing and Writing

Lafayette, CA 94549 . (925) 385–0608

changemakers@pacbell.net

www.changemakerspublishingandwriting.com

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GINI GRAHAM SCOTT, Ph.D., J.D., is a nationally known writer, consultant, speaker, and seminar leader, who has published over 200 books.

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Gini Graham Scott

Gini Graham Scott

GINI GRAHAM SCOTT, Ph.D., J.D., is a nationally known writer, consultant, speaker, and seminar leader, who has published over 200 books.

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