Reacting to recent incidents of Internet coupon fraud, supermarket chains Albertsons Inc. and Publix Supermarkets Inc. have started rejecting coupons that consumers obtain online and print at home. Albertsons is rejecting all Internet coupons that offer free products; Publix is rejecting all Internet coupons. The retailers and others say the fraud mostly deals with the illegal copying of coupons that offer free products, such as pint containers of Haagen Dazs ice cream.
Albertsons said it has experienced some losses related to fraudulent use of Internet coupons, but that it was also reacting to reports of fraud in Atlanta and parts of Florida as noted by the Food Marketing Institute and the Coupon Information Corp., a manufacturers’ organization that monitors coupon fraud. “We’re not accepting Internet coupons for free products, because of what happened in other stores and in some Albertsons stores,” a spokesman says. “But we’ve not seen an extensive problem.”
Publix said it has stopped accepting all Internet coupons because of what it says is the difficulty in determining their validity, a spokesman said. “It’s hard to tell what are fraudulent and what aren’t,” he said.
The issue of coupon fraud has also led to some legal saber rattling. FMI, contending that many fraudulent coupons are sold over eBay.com, has requested eBay Inc. to stop their sale, FMI president and CEO Tim Hammond says. EBay has so far declined to eliminate coupon sales, even though FMI has said it may resort to court action or lobby for new legislation to prohibit online selling of coupons, Hammond adds. EBay provides a selling platform but doesn’t sell items itself.
EBay says it will act against fraudulent coupon listings but will not remove all coupon listings. "We've communicated with the coupon industry numerous times on this issue over the years," an eBay spokesman says. "We have explained that we will allow the sale of coupons and remove any fraudulent listings. We are more than happy to work with the respective coupon manufactures and distributors to remove fraudulent listings but we will not remove every coupon listed on the site."
Hammonds adds that fraudsters have become skilled at creating or modifying coupons with high-quality printers and other graphics tools, whether or not the fraudulent coupons are distributed or originally acquired over the Internet. "There are some fraudulent coupons submitted for manufacturers that don’t even do coupons at all," he says.
The Coupon Industry Resource Center, an information source established by the coupon industry to monitor fraud, lists more than 60 Internet free-product coupons that have been either illegally copied or altered. The center can be accessed on the web at http://news.coupons.com.
There were 242 million Internet coupons distributed last year, accounting for less than 0.1% of all of the 336 billion coupons issued by manufacturers for redemption in retail stores, according to Carolina Manufacturer’s Services, which represents more than 600 manufacturers in the distribution of coupons. The Internet coupons last year accounted for about 0.2% of redeemed coupons.
Steve Boal, CEO of Coupons Inc., which operates the Internet coupon service Coupons.com, said web coupons should have a low rate of fraud when used properly. The most important fraud-prevention measure, he says, is to take Albertsons’ approach of rejecting all free-product coupons. “Using a free-product coupon is begging for trouble,” he says.
Boal adds that the Coupon Industry Resource Center, which he helped set up, includes a new Veri-FI service that lets store clerks key in code numbers of any coupon to determine if it’s valid.
Albertsons, however, says using such a service would slow down checkout lines. “That kind of service could be helpful, but tying up a whole line to check one coupon wouldn’t be fair to the other customers,” the spokesman says.
Back...
