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Coupon fraud is the illegal reproduction of commercially issued discount coupons or store–promotion currency. In 2009, there was a greater than 400% increase in incidences of this type of fraud over the previous year. The cost of these counterfeits has easily been in the tens of millions of dollars, according to a survey of 24 major consumer–products manufacturers. One consumer–product manufacturer estimates its losses to fake coupons at more than $3 million a year.


How Coupon Fraud can Hurt Your Business

Fraudsters often copy legitimate coupons and change expiration dates, product names or the amount of the discount. Sometimes coupons that are printed in circulars are scanned or photocopied. The fake coupons are then distributed through e–mail, Internet discussion groups and online auction sites. Some counterfeiters sell or trade them. Most fake coupons cover a wide variety of brands and involve mostly “free” product offers. Those that offer cents off can range from 50 cents to as high as $11.99.

Even though fake coupon counterfeit voucher fraud is on the rise, there are things that you can do to protect yourself.

We work closely with manufacturers and their coupon printing/distribution partners to secure legitimate coupons against fraud by making them verifiable by using the same equipment many retailers currently use to verify currency, credit cards, driver licenses and other important documents.

To augment the effectiveness of coupon verification equipment, it is prudent to also implement a set of procedures that help deter criminal activity by proactively identifying the individuals against watch lists for passing counterfeit coupons. This critical second layer to the fraud prevention framework can be achieved in a number of ways, ranging from using our line of inkless fingerprint pads for all return transactions, to more elaborate ICV products designed to capture and store images of identity documents utilized during transactions all of which are inexpensive, easy to use, require little to no training-and without adverse impact to the customer experience.

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