When Couponing Becomes a Scam
Couponing is a close cousin to using gift cards, which can be perfectly legitimate when you buy a gift card which hasn’t been tampered with from a local or online store. Likewise, if you get a coupon at a store, in a mailer, or clip them from a newspaper or magazine, that’s perfectly legitimate. But some scammers have turned coupons into a big business by creating or printing fake coupons and reselling them, which has cost companies millions and has led customers to end up with worthless coupons they can’t redeem, since they are fake. Some schemes have become so massive that a few scammers have ended up being arrested and convicted in schemes involving $30–40 million in losses for retailers and manufacturers. And many buyers of these coupons have lost large amounts of money, too.
I first became aware of the extent of the couponing scam after seeing the film Queenpins, which was released on Netflix in September 2021. Before then, like many others, I had used coupons which I got at the grocery store, in local magazines, and in mailers with coupons from local merchants. I was also aware of groups of mainly women coupon collectors, who cut out coupons from the local paper or magazines and traded them among themselves, so individuals could get the coupons they wanted to save money when they went shopping.
But after seeing Queenpins from Paramount, I discovered that couponing can be a multi-million dollar business, based on buying and altering or creating fake coupons. I also learned that not only did three Arizona scammers who inspired the movie get convicted in 2012 for a $40 million scam, but more recently, a couple in Virginia Beach, Virginia, were convicted in 2021 of a $31.8 million scam.
In the movie, described as a crime comedy, two women from Phoenix, Arizona, Connie and JoJo, played by Kristen Bell and Kirby Howell-Baptiste, come up with a plan to smuggle and steal cases of coupons and sell them, after Connie realizes she can get a coupon for a free item by complaining to a manufacturer. The duo set up a website called “Savvy Super Saver” and obtain extra coupons from a company that produces them in Mexico, and they sell them. But eventually, the sudden increase in the invalid coupons submitted at stores draws the attention of the grocery chain’s loss prevention officer, who soon works with a U.S. postal inspector to uncover the source of the illegal coupons. Meanwhile, Connie and JoJo live it up with a lavish lifestyle, that includes a mansion, fancy cars, and jets, until it all comes crashing down with their arrest. Besides losing their money and life of luxury, Connie goes to jail for about two years as the leader of the scam, while JoJo gets probation. Ironically, the movie itself suffered a similar fate — with a budget of $7 million it earned back about $1.2 million, as of this writing.
While the movie changed many of the details, the essence of the scam was patterned after a true-life story that occurred in Arizona in 2021, when three women, Robin Ramirez, Marilyn Johnson, and Amike “Amy” Fountain, joined together to create a $40 million coupon scam. The scheme began in 2007, when Ramirez began selling fake coupons by sending real coupons overseas, where they were reproduced and counterfeited in large quantities to provide big savings to consumers. For example, a $1-off coupon for a can of soup might be changed to a coupon offering $50 worth of free pet food. Customers could buy these fake coupons for a deep discount, such as half-price, and get the full value when redeemed at a grocery store. Given the huge savings, customers were eager to buy, though some later admitted to investigators that the deals “seemed too good to be true, but they never wanted to question such good fortune,” according to a September 11, 2021 Screenrant.com story by Autumn Cejer: “Is Queenpins Based on a True Story? Real-Life Inspiration Explained.”
After receiving the fake coupons, Ramirez, with Johnson’s and Fountain’s help to pack and ship orders, then sold the coupons on eBay from multiple accounts and from the group’s website, “SavvyShopperSite,” only changed slightly in the movie. Primarily, the group focused on selling coupons from manufacturers, which offer a free item or significant discount, rather than selling the small coupons offering about 50 cents to a dollar off. The women even offered a one-hundred percent return rate if a store rejected one of their coupons, as reported by Will DiGravio, in a September 1, 2021 Real Stories column, “The Real Story Behind ‘Queenpins.’”
Perhaps one reason the scam lasted so long is that the website required an invitation to access the site, and it warned customers not to freely share the information about where they purchased the coupons. In other words, the scammers invited customers to become scammers with them in getting great deals from merchants and companies producing the products. And they obtained so much money from the scam that they used twelve bank accounts to hold their money.
But then the scam fell apart after Procter & Gamble launched an investigation due to discovering some fake coupons while doing a routine audit. Eventually, forty businesses, including other major companies like PepsiCo and Hershey’s, filed fraud complaints, which alerted the local police and the Coupon Information Corporation (CIC), a watchdog organization for couponing formed by a group of consumer product manufacturers to support “coupon integrity.” After the FBI, investigated, they traced the ring to Phoenix and teamed up with the Phoenix Police Department and private investigators to expose and arrest the group members. As part of the eight-week investigation, some officers went undercover and purchased coupons from the Savvy Shopper website. Ultimately, this investigation led to a police raid, in which the police discovered more $40 million in fake coupons as well as $2 million in other assets, including 22 guns, 21 vehicles worth $240,000, a 40-foot speed boat, and cash, according to Cejer’s article.
After the bust. the three women pled guilty. As the ringleader, Ramirez pled guilty to counterfeiting, fraud, and illegal control of an enterprise and was sentenced to two years in prison and seven years of probation, while Fountain and John pled guilty to one charge of counterfeiting and served 3 years’ probation. The scammers also had to pay Proctor & Gamble over $1.2 million, and later, authorities established that their scam cost corporations hundreds of millions of dollars. Yet none of the customers who purchased and used or tried to use the coupons faced any criminal or legal consequences, though they participated in the scam when they acquired the coupons, a little like thieves who obtain stolen property and try to resell it.
More recently, in what seems like déjà vu, there have been a continuing plague of coupon scams, including a $31 million coupon scam by a couple in Virginia Beach, Virginia, who were arrested in April 2021. In this case, which seems like it could have also been an inspiration for the Queenpins film, Lori Ann Talens, with the help of her husband, operated a big coupon scam using social media sites, Facebook, and assorted apps to reach out to coupon enthusiasts and sell them counterfeit coupons, as described in a September 14, 2021 press release from the U.S. Attorney’s Office in the Eastern District of Virginia: “Virginia Beach Couple Sentenced for $31 million coupon fraud scheme.” Using the moniker “MasterChef,” Talens designed and produced a variety of counterfeit coupons on her computer. They looked almost exactly like authentic coupons, and often she created them with inflated values, which were much more than a legitimate coupon would offer. As a result, she or her purchasers could obtain items from retailers for free or for a much lower price.
Then, Talens used the U.S. Postal Service and other parcel delivery services to send the counterfeit coupons to buyers around the U.S. who paid through various online payment methods, including Paypal and Bitcoin. Her husband Pacifico helped by shipping packages of counterfeit coupons and engaging in other administrative tasks for his wife.
Ultimately, though, the scheme collapsed when one of Talens’ customers reported the couple to the Coupon Information Center. After receiving the report, the CIC purchased some coupons from the Talens, and once they determined the coupons were counterfeit, they contacted the U.S. Postal Inspection Service, who identified the Talens as the source of the coupons.
Then, the federal authorities executed a search warrant on the Talens’ home where they discovered and seized nearly $1 million worth of counterfeit coupons. They also discovered counterfeit designs for 13,000 products, which Talens was able to make because of her background in marketing and good computer design skills. So she could create these coupons for “almost any grocery or drug store product and to make them for whatever value off she wanted,” according to federal authorities cited in a October 26, 2021 New York Post article by Jesse O’Neill: “Virginia Woman Sentenced for ‘Staggering’ $32M Coupon Scam.” The result of the scam was that the Talens caused retailers and manufacturers to lose approximately $31.8 million, while thet earned about $400,000 for selling the coupons for three years, enabling them to live a life of luxury while the scam lasted. Once it ended, both Talens pled guilty to mail, wire, and health care fraud, and soon afterwards, Lori Ann was sentenced to over 12 years and her husband to over 7 years in prison.
Yet, while these two cases have made the headlines, and one inspired a movie, the couponing scam is continuing to attract scammers all over the country. For example, in the summer of 2021, the Houston-area police seized $40,000 worth of household products from Crest toothpaste to Iams dog food and Pampers diapers, from an alleged group of coupon fraudsters, according to the July 2, 2021 Washington Post article by Jacklyn Peiser, “A ‘Dark-Side Coupon Group’ Scammed Stores Out of Millions, Police Say.” Meanwhile, the nearby Montgomery County Sheriff’s Office discovered an expended coupon scam spreading to at least 23 states. So far they arrested and charged three people, and they have connected the scammers to 87 individuals in 23 states — in effect, this is like an organized criminal conspiracy based on couponing. Or as the Montgomery Sheriff’s Captain Tim Holifield described it: “There is a dark-web or dark-side coupon group that is doing nothing but selling coupons that are fraudulently and sophistically made to resemble actual coupons by the manufacturers.”
The case began in November 2020, when Walgreens contacted law enforcement about discovering fake coupons. Then, investigators discovered that many other major retailers, including Walmart and Kruger, also were getting an increasing number of coupons with fraudulent discounts. After that, the investigators found a website where customers could order counterfeit coupons that supposedly came directly from the manufacturers. But in truth that’s not where the coupons came from. Instead, as investigators discovered, the coupons came from a printing house, which used the same kind of printers that the retail stores used to print coupons. Then, after the police raided four printing locations and took away 4000 items worth $40,000, they discovered that the stores affected by these coupons lost almost $10 million, and they expect to discover another $10 million in losses.
Thus, counterfeit couponing is a continuing scam despite a few high-profile arrests, and it is perpetrated by customers who buy these coupons thinking they are getting a great deal, while the stores and manufacturers lose millions. Although some customers can put aside their concerns that they are participating in the scam, much like drug buyers and addicts are supporting drug dealers and cartels, they can experience some negative fall-out. For example, a customer using a fake coupon can be discovered at the cash register, and will not only not get the deal, but will usually lose whatever he or she paid for the coupon. And possibly if the customer has multiple counterfeit coupons for different products or has tried to use counterfeit coupons on previous occasions, the store could call in the police.
So how do you know if a coupon is legitimate or fake as a retailer who may receive coupons or as a consumer who might be tempted to buy a coupon to save money on making purchases? And what other couponing scams are out there?
That’s what I’ll talk about next in another article.
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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:
Executive Assistant to Gini Graham Scott
Changemakers Publishing and Writing
Lafayette, CA 94549 . (925) 385–0608