Cents-off coupons are providing big bucks for scam artists who offer business opportunity and work-at-home schemes featuring coupon certificate booklets and coupon clipping services.
Using the Internet to market these so-called opportunities, fraudulent promoters are promising entrepreneurs, charity groups and consumers earnings of "hundreds per week" and "thousands per month" simply by selling coupon certificate booklets or cutting coupons at home. The fact is that consumers and manufacturers are getting clipped in these costly and deceptive coupon capers.
Legitimate Ways to Use Coupons
There's only one legitimate way to use a coupon - cut it out of the newspaper or other source and use it toward the purchase of the designated product. A coupon is meant to be used only by the consumer who buys the product for which the coupon is printed. Selling or transferring coupons to a third party violates most manufacturers coupon redemption policies and usually voids the coupon.Coupons are Big Business
More than 3,000 manufacturers distribute nearly 330 billion coupons worth an estimated $280 billion every year in an effort to help consumers save money. Indeed, it is thought that 77 percent of American households use some eight billion coupons to save $4.7 billion on their grocery bills.Yet, fraudulent promoters are making money marketing and misrepresenting coupon-based business opportunities to unwary consumers and even savvy organizations.
Among the victims are:
- would-be entrepreneurs trying to run a business from home, people with otherwise limited income opportunities, and people just trying to make a living, who are losing savings and time and effort;
- charity groups, lured into selling coupon certificate booklets as fundraisers; and
- consumers who are dealing with complicated forms involving difficult procedures and handling fees to receive the same coupons manufacturers give away for free.
Heres how the coupon scams work:
Coupon Certificate Booklet Scams
A promoter sells an investor a business opportunity selling coupon certificate
booklets. The investor is supposed to sell the booklets to consumers for $20 to $50 each.
The booklets contain 20 to 50 certificates, each of which can be redeemed for $10 worth of
grocery coupons. That makes each booklet worth between $200 and $500 in
coupons. To redeem the certificates for coupons, the consumer must complete and mail a
form, select 30 to 50 products from a list and include a self-addressed, stamped envelope
and a processing fee.
In theory, the investor should make big profits selling the booklets to consumers. And consumers should save big money by using the coupons when they buy the groceries. In reality, though, the promoter is the only one who makes money.
Investors who spend several hundred to several thousand dollars to buy the certificate booklet distributorship lose money because inflated earnings claims never pan out. Consumers who pay out substantial processing fees and postage for coupons lose money because they can clip coupons for themselves from their newspaper. To redeem $500 worth of certificates, for example, a consumer might pay postage and processing fees of over $100. And everyone loses on false claims that coupons have no expiration date. Only a tiny share of coupons issued by manufacturers have no expiration date.
