e-Course: Spotting a Fraud

by Beth Montgomery on April 17, 2010 · 1 comment

in Coupons & Rebates, Tips & Basics

This is Part 17 of the 30-day Savings Soiree e-course by In Good Cents. View the most recent course in this series or head to the Saving Soiree e-course main menu.

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It’s no wonder some stores tend to look over our coupons with a fine tooth comb.   Fraudulent coupons cost manufacturers and retailers over $500 million dollars a year. To make up this cost, in the end, they pass it on to us by raising prices.   However, the entire process can take some time before anyone even realizes.

You see, once a fraudulent coupon hits the web, it’s everywhere quickly.   Millions may print and redeem it.   When the manufacturer realizes what’s happened, they notify the Coupon Information Corporation (CIC), who is in charge of getting the retailers notified.   Then retailers have to notify managers, cashiers, and other employees.   All the while, the fraudulent coupon is slipping through the cracks, but the manufacturer is no longer reimbursing the retailer, because they’ve done their part by contacting the CIC.   In the end, the store takes a huge hit, which sometimes makes them a bit “coupon shy” in the future.

As consumers who use coupons, it’s our job as well to make sure we aren’t using fraudulent coupons.   The more educated we are on the topic, the more we can avoid accidentally using an illegal coupon (and the embarrassment!), therefore helping the stores and hopefully, making them a little less “coupon shy” and more likely to take our coupons or lay down piles of policies that make it harder to get such great deals.

So, here’s my tips for spotting a fraud.   When you’re unsure about a coupon, here’s some things I’d like you to think about:

1. Did you get the coupon from a legitimate site?
If you found the coupon on a legitimate site like Coupons.com, Red Plum, Smart Source, or a manufacturer or store website, it’s likely safe to use.   It would take one really good hack to get in there and add a coupon to a site like this!

Do make sure though.   Anyone can buy domains similar to the manufacturer’s, so watch for tiny tricks like those.   It’s Meijer.com. Not MeijerGroceryStore.com!

2. Check it Out!
First, head to the CIC’s Fraudulent Coupon List and check to make sure it’s not on the list.   And if it’s not listed, double check at Hot Coupon World’s It’s Got to be Real page, since they list fraudulent coupons, as well a coupons in question at the moment.   Keep in mind though, just because it’s not listed, doesn’t mean it’s real.   It simply means that maybe the manufacturer or the CIC hasn’t been alerted yet.

3. Where did you get it?
If you didn’t get it from a legitimate site?   Where did you get that magical coupon?   Most coupons sent via e-mail will be sent directly from the manufacturer or store and explicitly state that they can not be forwarded.   If you got the coupon from a friend or family member via e-mail, there’s a high probability it’s a fraud, and the sender just didn’t realize.

Did you snag it online from a buyer?   If you’re shopping from legitimate clippers like Coupons by Dede or The Coupon Clippers, once again, you’re probably safe.   But, when buying online from e-Bay or Craigslist, beware.   While with clipping services, you are paying for the time and effort for the actual clipping, often on e-Bay, you’re paying for the coupon itself, which by the fine print voids the coupon and is illegal.   But, on top of that, it’s not unusual to find coupons on e-Bay or Craigslist that are in fact fraudulent for one reason or another!

Also avoid coupons found on message boards, forums, and similar websites.

Update: The Coupon Information Corporation has recently changed it’s Frequently Asked Questions to clearly state that buying coupons is coupon fraud, even when the seller claims they are charging for clipping of coupons and not the actual coupon.   Though why these well-known companies are still in business, I’m not sure.   So, purchase at your own risk.

4. What is the format of the coupon?
Is the coupon a PDF, JPG, GIF, or other image document?   Chances are high that it’s a fraud.   While it’s not unheard of for manufacturers or stores to release a coupon on their website in PDF format, most are smartening up and using programs like Smart Source and Brick to distribute their coupons, so they are still in control over how many they are printed.   These formats are the preferred for fraudulent coupons.

5. Is it too good to be true?
Usually fraudulent coupons are a couponers dream come true at first glance.   They are high value or even for completely FREE products.   They may have an insanely long expiration date or never expire.   It may state that it’s “reusable”.

Sorry, but here’s the truth – if it seems too good to be true, it probably is.

6. Does it look legitimate?
When it comes to coupons, there are similarities between legal, legitimate coupons and stores don’t have to take them if they’re missing one of the following:

  • Expiration Date
  • Scanable Bar Code
  • Legitimate Remit To Address

However, fraudulent coupon makers are crafty, so the real coupon makers have been adding extras to make it harder to make your own or alter a coupon.   Here’s more things to look for to confirm it’s legitimate:

  • Copy Detection /Anti Copy Technology
  • Product Image
  • Watermark
  • NonStandard Text
  • Pattern Text Behind Expiration Date
  • Encrypted Unique Serial Number
  • Unique Coupon Printed Time Stamp Repeated

Coupons printed from legitimate sites, like Coupons.com or Brick, have their own unique time stamp repeated 35 times around the outside.   It says the time you printed and your user I.D.   Even if you print two from the same computer, this will still be different.   Plus, the barcode in the upper left-hand corner is a number to identify the coupon. This will also be different per coupons.

But what should make you weary? Look for:

  • Changes in font size, type, or weight
  • Blurry photos, barcodes, or text
  • Spelling or date errrors

7. Did you make it fraudulent?
I’m sure you’re thinking, “Huh? Why would I do that?”.   When I first started couponing, I came across a wonderful deal for something I loved.   I printed my two coupons, but I wanted more.   So, I stuck the coupons in my printed and made a few copies.   Luckily for me, I had a friend who stopped me before I committed coupon fraud.

Many don’t realize that each printed coupon usually has it’s own individual numbers associated with it.   This is so manufacturers can control how many are printed to keep within their allotted budget.   Copying coupons is the most common form of coupon fraud, because so many don’t even realize it’s illegal.

Think it’s innocent?   Ask the man who copied and used more than 100 coupons, thinking he’d never get caught and now has been released on $5,000 bail.

Along the same lines, do not:

  • alter, photoshop, or change coupons
  • make your own coupons

– – Consequences of Fraud – –

The CIC is in charge of prosecuting those who commit coupon fraud and they don’t hesitate to brag that they haven’t lost a case since 1986.   Here’s the penalties you can see:

  • Average: 3-5 Years Jail Sentence
    • Longest: 17 Years
  • Financial Penalties Vary. Seen in Excess of $200,000
    • Highest: $5 Million

– – What’s not a Fraud – –

There are times when a company released a coupon and it spreads throughout the coupon community.   Maybe they intend for it only to go to a certain group of consumers or a certain city.   Maybe it’s on a “hidden” URL on their website that wasn’t suppose to become known to the world.   Whatever the reason, it becomes more than the company intended.   Sometimes they may scream “fraud”, while in truth it’s not a fraudulent coupon.   It’s usually just a situation in which the release of the coupon wasn’t well thought out or the company didn’t understand how far the coupon would go.   However, the company that releases the coupon does have the right to no longer accept the coupon.

– – Additional Resources from Previous Posts – –

Confused or want more help? Don’t forget that I teach classes and speak in the Central Indiana area! Use the code ClippingMyBudget to get $10 off a public class.

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