Coupon use is on the rise and so is coupon fraud.
From 1986 to 2001, the non-profit CIC reported only two cases of investigated or prosecuted coupon fraud. That figure rose to just nine in 2007. From 2008 to the middle of 2009, 93 such cases were reported and the numbers are expected to rise as the recession drags on.
For example, Nestlé Purina Petcare Co. issued 250 coupons in Jan. 2008 for a free bag of its adult dry dog food. By May 5, nearly 2,800 coupons for the product had been redeemed.
The availability of Internet coupons is blamed for a large portion of these fraud cases, costing the industry tens of millions of dollars. So how does this fraudulent activity effect someone using coupons legitimately? Stores are more frequently refusing suspicious-looking coupons, such as coupons with smudged Universal Product Code (UPC). Some major stores now refuse to accept any online coupons, closing off a money-saving avenue for many with verifiable coupons.
One of the best ways to reduce coupon fraud, making things easier for us all, is for consumers to recognize and refuse suspicious coupons. Here are some tips that will help savvy coupon users spot a fake coupon.
1. The UPC is suspicious: A UPC consists of a bar code and numbers placed at the bottom of each coupon. Bar codes include 12 numbers that represent different things. The first digit represents the actual coupon; the next five numbers identify the manufacturer; followed by three digits indicating the family code assigned to the product by the manufacturer; the proceeding two digits represent the coupon's value; and the last digit is known as a "check digit" that tells the cashier how to validate a coupon.
Look for signs that indicate the bar code has been tampered with or smudged. Make sure it matches the description found on the front of the coupon. For example, if the bar code numbers indicating the coupon's value are 20, the value of the coupon should be 20-cents off the product.
2. No or little redemption data: All online coupons should include the "small print" information found on traditional coupons. This includes an expiration date.
3. Too easy to access: Most legitimate Internet-based coupon services require registration or subscription to access coupons. Consider the source before downloading.
4. Too good a deal: Out-of-this-world deals are likely fraudulent. Manufacturers and retailers simply don't offer $200 coupons on a $300 product.
5. Photocopied coupons: It's illegal to photocopy or scan a coupon. You can tell if a coupon has been scanned or copied then uploaded to a web site by visiting the manufacturer's web site. If that site doesn't have printable coupons, it's likely the original coupon is fraudulent.
6. Fake printed coupons: These are easy to spot as they're usually printed on thin, cheap computer paper and look faded.
7. Up-front fees: You shouldn't have to pay money before receiving coupons. Up-front fees suggest a fraudulent coupon.
8. Longer-than-normal expiration dates: Coupon distributors have steadily decreased the number of days you can use a coupon. Be wary of coupons with an expiration date that is more than 30 days out.
9. One-sided print coupons: Newspaper, magazine and insert coupons should have print on both sides.
If you come across a coupon scam, send your records and any mailing envelope to the Coupon Information Center, P.O. Box 320224, Alexandria, VA 22320.