Coupon Fraud: Part 1

In one of my earlier posts I briefly mention coupon fraud. I gave the basic definition of what coupon fraud  is simply using your coupons in an illegal way. Hmmmm, it’s pretty vague huh? So I thought in this post we would delve deeper into what that really means.

First let’s talk about why it’s important to even know this. For one coupon fraud is illegal. So yes, if you get caught, you can potentially face charges for it. It also starts a vicious cycle where no one wins. When a coupon is used incorrectly, purposely or not, the company can choose to not reimburse the store. This means that the stores will start making harsher, and stricter coupon policies. Or the company reimburses the store and eat the loss themselves. This leads to them making less valuable, and more restrictive coupons. Either scenario hurts us, the couponer, in that we can’t get the same great deals we did before. So everyone loses.

Remember, it's important to always read your coupon! The important things to look at are: what products you can use the coupon for, any size restrictions it may have, the expiration date, and if it has any restrictions on how many coupons you can use at once. If the coupon say "any product" then feel free to buy whatever product (in that brand) that you want. If it has no size restrictions, feel free to buy the smallest, cheapest size you can. So always, always, always! Read that coupon, if you need some help refer to my earlier post, What The Fine Print On Your Coupon Really Means, for help.

Barcode Reading – Everyone coupon has a unique barcode on it. This barcode tells the machine if the coupon is being used correctly. I won’t explain specifics, because I don’t feel comfortable doing so, but certain numbers on the barcode tell the machine certain things. For example, some numbers match to a specific item (say 4 oz. Crest toothpaste), while another number tells the machine that the coupon is for “any” product. Sometimes the manufacturer puts the “any” number on a coupon that is actually product/size specific. If you intentionally read that barcode and take advantage of their mistake to buy something the coupon was not intended for….. that’s coupon fraud.

Another common misuse is to take coupons that clearly state a size limit, and use them for trial sized products. Again, they know how to read the barcode to know if the coupon will be accepted. This may seem harmless to some, but it’s still coupon fraud!

Here are some examples of this I’ve heard, and seen. 

• A coupon for a 1 lb. package of lunch meat, as it states on the coupon verbiage, is misused to buy their smaller single serving packages. Which made them free for the shopper, but somebody had to eat that lost money. 
• Another time there was a Crest Whitestrips coupon for $10 off, some people noticed the “loophole” in the barcode and were using this to purchase toothpaste! So not only were they getting it for free, they were getting paid to break the law. 

Honestly, I consider this shoplifting. The only difference is instead of hiding the product in their purses they trick the store into bagging it up for them! 

There's also another set of words on the coupon that cause some debate as to what is a violation of this and what isn't. That is the "Void if copied, transferred, prohibited, taxed or restricted." and some mention not getting a cash value for coupon. So the debate over this wording is the practices of buying coupons online, and trading coupons. I suppose technically trading coupons with a buddy is considered a "transfer", but I don't worry about it. These companies put out these coupons for people to use, so if my friend is going to trash hers, then they are better off with her giving them to me. She may not buy their product at all, coupon or not. I on the other hand, if I find a good deal, will buy multiples of that item. Yes, their profit margin is smaller per item, but what they sell to me in bulk helps make up for it. If I didn't have those extra coupons, I wouldn't buy that many. 

Next we'll talk about the legalities of buying coupons online. First I have to say, do not buy printable coupons online! The risk that they are fake, copied, or shady is extremely high. If you need extras, ask friends and family, ask a trusted coupon group or forum to trade with you, or even try going to your library and printing them off there (if they let you, and most charge a small per page printing fee). 

You'll notice that most coupon clipping services, and ebay sellers, have a small disclaimer telling you that they are not selling the coupons, they are charging for the time they take to sort, cut and mail them. Fair enough, it does take time (that I don't always have) and allows them a loophole. Honestly, I don't see any problem buying coupons online. Whether it's through a coupon clipping service, or a seller on ebay. The only potential problem is that you may be buying coupons from someone who is stealing inserts. This is more likely on ebay than a service, but then again who knows. Mostly I think it is the Sunday paper sellers that are more worried about these coupon rules than the companies. It's a hard time for print journalism (aka newspapers) and the boost they get from Sunday paper sales is needed for many. This is something that you will have to decide for yourself if you're comfortable with either one, and if you will do them.

So remember to always read your coupon, the words not the barcode, and carefully follow the guidelines they set down. This is the main way that people commit coupon fraud. Of course this can go for coupons you clip from the paper or that you print off the internet. Yet, there are a whole new set of fraudulent uses of internet coupons. In my next post: Coupon Fraud Part 2 (creative I know), will focus on printable internet coupons and what you should watch for and not do. Watch for it tomorrow evening!