Coupon Fraud – What is Coupon Fraud and What Isn’t

Coupon Fraud – What is Coupon Fraud and What Isn’t

Coupon Fraud – What is Coupon Fraud and What Isn’t

Thanks to shows like Extreme Couponing, more people are utilizing coupons for the products they purchase than ever before. Even if you never take it to the level of some of the avid couponers on the show, you can still save a lot of money by using coupons wisely. However, the rise of couponing also led to a rise in coupon fraud. Here’s what you need to know about coupon fraud and what it means for you. 

What Is Coupon Fraud? 

Coupon fraud occurs whenever a person uses coupons in an inappropriate manner, like for products they haven’t purchased or for more products than the terms and conditions of the coupon specify. Retailers can also be guilty of coupon fraud by redeeming coupons for products they didn’t actually sell or allowing customers to use coupons inappropriately. Coupons can also be faked or modified, which is considered coupon fraud as well. 

The terms and conditions on a coupon are not just guidelines; they are legally binding. These laws can be upheld at the local, state or even federal level. Anyone who does not abide by these terms and conditions can be held liable for coupon fraud. In some cases, you can even be prosecuted for coupon fraud, so it is important to educate yourself on what does and does not constitute coupon fraud to ensure you are using them properly, on whichever side of the checkout counter you find yourself. 

What Actions Constitute Coupon Fraud? 

Coupon fraud behaviors fall into two primary categories, those committed by customers and those committed by retailers. 

Customer Coupon Fraud Activities 

In many cases where a person is prosecuted for coupon fraud, they are committing coupon violations on a large scale. However, it is still possible for general consumers to become embroiled in coupon fraud allegations if they are not careful. You can still be prosecuted even if the fraud was unintentional, so you need to be informed in order to protect yourself. Here are some of the most common coupon fraud activities committed by customers: 

  • Copying Coupons – Copying coupons is typically not allowed by the companies providing the coupons, and this act can get you into serious trouble. Most coupons are intended for a single use only, and copying the coupon goes against this component of the terms and conditions. 
  • Printing Too Many Coupons – As more and more of our daily activities shift to the digital world, many people are turning to online coupon sites to find these money-saving opportunities. If you aren’t making the purchase online, you’ll typically need to print out the coupon to bring into a brick-and-mortar retail store. However, most online coupons have limits with regards to how many times you can print the same coupon. Stick to these rules to avoid prosecution for coupon fraud. 
  • Decoding Coupons – Using a coupon for products other than the ones specified on the coupon is known as decoding. Each coupon will usually provide the details of the specific products for which it can be used. This includes information about the name of the product, of course, but also the size, color and other specific details. In some cases, a coupon may apply to a class of products, like multiple flavors of juice, while in others, it can only be used for a single variation, like apple juice or 20-ounce bottles. Be sure to read the terms and conditions in detail so that you know exactly how to use your coupon. 
  • Buying or Selling Coupons – The fact that coupons cannot be transferred from one person to another is a mainstay of coupon terms and conditions here in the United States. However, unless a coupon specifically has your name or other identifying information connected to it, like a special coupon for a brand’s credit card holders, most companies don’t mind you passing along a coupon to friends or family members. Where this becomes a problem is if you try to sell coupons to others online or in person. The issue here is that you are now making a profit from another company’s coupon, which is illegal. You should never have to pay to purchase coupons, online or otherwise. If someone asks for money in exchange for a coupon, look elsewhere to find discounts. In addition, buying coupons from strangers also increases your risk of winding up with a counterfeit coupon. 
  • Stealing Coupon Circulars – Many newspapers, especially on the weekends, come with stacks of coupons from a variety of retailers in the local area. However, you are expected to purchase the newspaper in order to get the coupons. There are people who resort to stealing newspapers in order to get more coupons, though, and this is illegal. Even just stealing the coupon inserts is illegal, even if you don’t steal the entire newspaper. Depending on where you live, dumpster diving may also be illegal. This practice involves searching dumpsters or trash cans for discarded newspapers or coupon circulars. 

Retailer Coupon Fraud Activities 

It is not just the customers who use coupons who can commit coupon fraud, but the retailers who accept them as well. Though this is not as common, it is still possible. If you work in a retail environment that accepts coupons, you need to be aware of how to use them properly to minimize your risk of being caught for coupon fraud. Here are a few of the most common behaviors in this category: 

  • Redeeming Coupons for Unsold Products – Some retailers may try to cash in coupons for products they didn’t actually sell. When a retailer redeems a coupon, the product manufacturer or other coupon issuer sends them a rebate to cover the lost income. Disreputable retailers often alter their records to indicate that they sold a particular product with a coupon, even if they did not actually sell that item. This way, they can collect the rebate without actually offering the discount. It is crucial that you educate your employees about the proper way to evaluate and process coupons to ensure they are doing it correctly. 
  • Raising Prices to Counteract Losses – In an effort to protect themselves from customers using coupons in a fraudulent manner, some retailers raise their prices to prevent losing money. This way, they won’t lose income if a coupon issuer refuses to provide the rebate for a coupon that was used fraudulently. While not technically illegal, this practice ends up hurting all of the stores customers, as they must pay higher prices for the items they buy on a regular basis. This is basically punishing the many for the fraudulent actions of the few. 

Protecting Yourself from Coupon Fraud Allegations 

When it comes to coupon fraud, prosecutors tend to target people who are making a lot of money by using, accepting or producing fraudulent coupons, but that doesn’t mean that you are safe if your fraudulent use was unintentional. The best way to keep yourself safe from fraud charges is to carefully read the terms and conditions of every coupon you use to ensure you are using it correctly. The more aware you are of the rules and regulations regarding coupon use, the easier it will be to follow them. If you are unsure, don’t be afraid to ask. 

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