Eliminating Coupon Fraud

In August 2012 a 22-year old computer whiz and former student at the Rochester Institute of Technology pleaded guilty to an online coupon scam that cost retailers and manufacturers hundreds of thousands of dollars. The coupons were for everything from Tide laundry detergent to PlayStations.

The Texas native, Lucas Townsend Henderson, duped retailers by designing coupons to look like legitimate coupons from SmartSource. Although Henderson was doing it for beer and snacks, his counterfeit coupons were used to redeem $200,000 of Tide laundry detergent in one month alone. A loss that the chemical giant passed on to consumers by increasing prices and offering fewer legitimate coupons.


According to the Coupon Information Center (CIC), an organization devoted to preserving the integrity of coupons and other promotional programs, fraud schemes totaling over $750 million have been uncovered since 1986. More scams are being uncovered with greater frequency and it’s believed that coupon fraud is a billion dollar industry.

It’s a costly cycle that affects manufacturers, retailers and consumers with consumers being the big losers as they are the ones who are forced to make up the loss with higher price tags.

Despite the problems with coupon fraud, internet coupons are not going away any time soon. There can be some pretty damaging repercussions if you’re found using counterfeit coupons. Ultimately, it’s up to you to protect yourself from this and it’s important to understand what coupon fraud is, how to recognize it and how to prevent its proliferation.

Coupon fraud happens when someone tries to redeem coupons without making a product purchase, or the coupons have been altered or counterfeited. If a coupon is too good to be true or involves money upfront, it’s likely a scam. Be wary of coupon emails from unknown senders and unfamiliar websites and forums offering huge savings on brand name goods. To keep from participating in a criminal’s coupon scam, take the time to research any of these ‘exclusive’ and ‘once in a lifetime’ offers.

Never buy coupons. A very common, profitable and easy cheat is to forge coupons and sell them online. Not only is the practice a violation of the manufacturer’s policy, but illegal. While tempting to pay pennies for significant savings on expensive products, it’s very likely that you’re participating in a criminal activity. Do not be swayed by the seller’s claim that you’re paying for their ‘time and effort’ when purchasing coupons. They are essentially acknowledging the fact that the practice is illegal, and subject to steep criminal charges and civil fines. Refrain from supporting and encouraging such fraud by not purchasing coupons online.

Help protect yourself and other consumers by helping to minimize the impact of coupon fraud. Being smart about where and how you acquire your coupons will ultimately save you and your family a lot of money in the long run.

For more couponing tips, read the articles below:

Ideas on Finding Coupons

Coupon Etiquette

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