How the Scam WorksA promoter (scam artist) recruits investors (sales people) as distributors for coupon certificate booklets in exchange for a distribution fee.
The booklets contain 20 to 50 certificates, each of which can be redeemed for $10 'worth' of coupons. This makes the booklets total 'worth' between $200 and $500 in coupons.
The distributors are told to sell the booklets to consumers for $20 to $50 each.
Consumers who purchase the coupon books fill out and mail in a form, select 30 to 50 products from a list, include a self-addressed, stamped envelope and a processing fee to obtain the coupons.
Where is the Scam for the Consumer?Consumers rarely receive the savings they believed they would receive when buying the booklets. For example, for a consumer to get the advertised $500 worth of coupons, they could end up spending $100 in processing fees and stamps.
Generally, consumers have to pay a processing fee of around $1.00 or more for each coupon redeemed.
Consumers have to provide self-addressed, stamped envelopes with every order.
Many times there is a minimum to how many products are selected, resulting in more coupons getting checked off as wanting than will actually be used.
The promise of 'No Expiration Dates' on the coupons is a common ploy used to sell the coupon booklets, making the consumer believe they can check off more products than they actually need at the time (to meet their minimum) because they can always redeem the coupon later since there is no expiration (or hurry) to redeem it. The reality is, there are very few, if any, 'no expiration' coupons issued by manufacturers.
The amount of the coupon is often very low. (10 - 25 cents off)
The promoter often includes a disclaimer, which says they will try to fulfill all orders, but because it is 'first come first serve', the coupons may not be available. Substitutions or receiving no coupons at all for products checked often results.
The coupons received are available free in newspapers and magazines.
Where is the Scam for the Distributors?Skilled scam artists (promoters) oversell the system as an easy moneymaker and investors who put up hundreds of dollars rarely see any profit because the inflated earnings claims never pan out. They often target work-at-home moms, entrepauneurs, and charity groups.
The scam artist often:
- Guarantees big profits, high income or amazing savings in a short time.
- Claims that no risk is involved.
- Uses pressure to act now.
- Claims that this is a hot, "can't miss" opportunity.
Who Is Targeted?
- Entrepreneurs trying to run a business from home.
- Work at home mom and dads.
- People with otherwise limited income opportunities.
- People wanting a second income.
- Charity groups, lured into selling coupon certificate booklets as fundraisers.
The Bottom-lineThe only person who makes money with the coupon certificate booklet scam is the promoter. People looking for extra income or to work from home should avoid this type of business opportunity. Consumers wanting to save on food costs by using coupons will spend more than save by investing their money in coupon certificate books.
What Should You Do If You Are Scammed?If you have been or are involved in a coupon certificate program that fails to make good on its promises, ask the company for a refund. Let the company know you plan to notify officials about your experience. If you can't resolve the dispute with the company, you may want to turn to one of these organizations for help:
Your local Postmaster. The US Postal Service investigates fraudulent mail practices.
The Attorney General's Office in your state or the state where the company is located.
For more information, visit FTC.com.