Coupon fraud hurts all shoppers and raises prices – part 1
The post-recession squeeze has made couponing more than a casual glance through the paper for many. But coupon counterfeiting and other forms of coupon fraud are rapidly becoming more common, and that could drive the prices up for all in the long run.
Coupon fraud on the rise
Bud Miller, executive director of Coupon Information Corp. — a group that represents manufacturers that issue coupons — said that his group saw only 18 reports of counterfeit coupons in 2007. By 2011, that amount had risen to 486. This year, more than 600 cases have been reported in the first half of the year alone.
‘They don’t care who it hurts’
Couponing guru Jill Cataldo described the mentality behind people who justify committing fraud with their own savings in tough economic times:
“They want to get all that they can as cheap as they can, and they don’t care who it hurts in the process. Eventually it trickles down into higher prices for everybody, and that’s something you should care about.”
Josh Elledge, of the coupon site SavingsAngel.com, said:
“It’s going to accelerate the thing that irritates us all, the constant creeping up of prices and the constant shrinking of package sizes… That’s not sticking it to the man. That’s sticking it to everybody.”
It retailer’s give discounts to consumers using coupons inappropriately, then their tills come up short when reimbursed by the manufacturer that issued the coupon. To make up that shortage, retailers may pass those costs onto consumers in the form of higher prices.
Sometimes, coupon fraud is committed unintentionally, as was the case with a recent consumer who wrote to Cataldo. This shopper printed out many copies of a coupon from an online version of a newspaper.
A shopper, identified only as George R., wrote:
“Same as buying many copies of the paper, right?”
Not at all. And as it turned out, none of the copies were valid anyway. Sometimes the online version of a paper is merely a scan of the print version. The rights associated with those clip coupons do not transfer to a copy from another medium.
Serious criminal fraud
Other times, coupon fraud can be a highly organized, serious crime. Last month, Corey Scott Lester, 22, of Porter, Texas pleaded guilty to felony theft for defrauding a grocery store out of $20,000 to $100,000 in an elaborate coupon scam that involved paying off cashiers at a Kroger store for accepting the invalid coupons. Charges are pending against other conspirators in the scam as well.
Police detective David Scott said:
“They would buy $1,000 worth of goods and pay only $20. They would ‘tip’ the cashier about $50 to $1,000.”
Scott got off relatively easy. He was sentenced to 30 days in jail, followed by eight years probation.
Common scams and mistakes
In the second part of this article, we will take a glance at some of the common scams and mistakes in couponing that, if not avoided, could lead to raised prices, or even to retailers banning their use all together.