When you’re frugal with money, every single penny counts. You try to save on groceries, clothes, entertainment, transportation costs, and all the other things. And when you use coupons to cut back on things, it gets much easier to save up. They’ve become very popular in the U.S., and the statistics speak for themselves. More than 80% of U.S. consumers subscribe to emails primarily to get coupon codes, according to Bitdefender.
But there’s always a fly in the ointment. While coupons can be a great way to save money, they can also be exploited by scammers. Fake coupon emails, phishing links, and counterfeit codes are becoming increasingly common.
Juliana O’Rork from the Better Business Bureau explains, “These fake deals are tricking consumers on websites, social media platforms, and in texts and email inboxes. While motives and methods vary, phony coupons often mean serious losses for retailers, consumers, or both.”
So, let’s dig deeper into what fake coupons are and what you can do to protect yourself.
Common Types of Fake Coupons
Coupon fraud manifests in various ways, each posing unique challenges to consumers and businesses.
Each type of coupon fraud will be explored in detail to understand its operation and impact on the retail sector.
Phishing Coupons
Phishing coupons are often delivered via email, text messages, or social media. They are crafted to look like legitimate promotions from well-known brands. The goal is not to provide a discount but to trick you into revealing sensitive information such as login credentials, credit card numbers, or other personal data.
Example: You receive an email claiming to be from a popular online retailer offering a “$50 gift card.” Clicking the link takes you to a fake login page designed to steal your account password.
Risk: Identity theft, unauthorized purchases, or compromised email and financial accounts.
Counterfeit Coupons
These are fake coupons created to look like genuine promotions. They can be printed or digital, but when you try to redeem them, they are invalid. Fraudsters may share these on forums, social media, or coupon-sharing websites.
Example: A “Buy One, Get One Free” coupon circulating on social media that your store refuses to accept because it wasn’t issued by the retailer.
Risk: Wasted time, frustration, and potential exposure to scammers if personal information was required to claim the coupon.
Malware Coupons
Malware coupons often come as links claiming extraordinary deals—like a free phone or massive discount—that lead to malware downloads. These can infect your device with viruses, spyware, or ransomware.
Example: A link promising a free high-end gaming console. When clicked, it downloads malicious software onto your computer or smartphone.
Risk: Device infection, data loss, financial theft, or ransomware demands.
Coupon Code Scams
These scams involve fake promo codes for online stores. The codes either don’t work or redirect users to fraudulent websites designed to steal personal information.
Example: Searching for a promo code for a popular retailer leads you to a site claiming, “Use this code for 50% off.” Entering your info gives scammers access to your account or credit card details.
Risk: Unauthorized transactions, account hacking, or malware installation.
How Fake Coupons are Created
Creating fake coupons requires a high level of sophistication and technical know-how.
The methods used to create fake coupons, along with the tools and technologies involved, will be explored in detail below.
Advanced Printing Techniques
Fraudsters employ sophisticated printing technologies to produce counterfeit coupons that closely resemble legitimate ones. Microprinting and watermarking are techniques used to create counterfeit coupons that closely imitate legitimate ones. By replicating the exact color palette of genuine coupons through advanced color matching techniques, fraudsters ensure high-quality counterfeits that enhance their authenticity.
Certain printing methods like offset printing and digital presses allow counterfeiters to produce high-fidelity, realistic coupons that are difficult to detect.
Digital Manipulation
Fraudsters use sophisticated digital tools to create fake coupons that can easily deceive both consumers and retailers. Digital coupon scams often operate through phishing emails and fake websites to manipulate consumers into providing personal information.
Detecting Fake Coupons
Code Tracking
A code tracking system is essential for monitoring coupon usage patterns and identifying unusual or excessive use. Businesses should track code usage patterns, redemption velocity, and usage frequency to detect potential coupon fraud. Automated alerts can be set up for tracking suspicious transactions related to coupon codes. Patterns such as excessive redemptions from a single location and spikes in use can indicate potential coupon fraud.
Techniques to identify and address coupon abuse include:
- Machine learning and statistical analysis to identify anomalies in coupon usage.
- Monitoring the velocity of promo code redemption to suggest potential coupon abuse.
- Leveraging advanced analytics and predictive modeling to address fraudulent activities.
Customer Behavior Analysis
Analyzing user behavior, such as rapid redemption of multiple coupons, can help flag potential coupon fraud. Suspicious patterns like multiple accounts from the same IP address can indicate coupon abuse.
Manual Review
High levels of coupon issuance to a single customer should alert customer service teams to potential fraud. Efficiency in manual reviews can be enhanced by utilizing tools like Identity Review 360.
This method, though time-consuming, adds an extra layer of verification and helps in identifying fraudulent activity.
Preventing Fake Coupon Fraud
Unique, One-Time Use Codes
Unique, one-time-use coupon codes are recommended to prevent unauthorized promo code usage. Features that can increase coupon code security include expiration dates and account limitations. Using randomized digital coupon codes enhances security and reduces the likelihood of fraud.
Creating unique codes tied to specific customers or accounts ensures only the intended recipient can redeem them. To prevent fraud, consider the following:
- Avoid generic or reusable coupon codes to prevent exploitation by fraudsters.
- Personalize coupon offers by generating unique codes for each customer.
- Use unique codes as a method to help prevent fraud.
Clear Terms and Conditions
Clear coupon policies prevent fraud by reducing confusion and unauthorized usage. Educating customers about how to use promo codes is essential. It highlights the importance of fair usage and following the terms associated with them.
Promo code coupon terms and conditions should specify restrictions, limitations, and expiry date.
Fraud Detection Tools
AI-based analytics can identify unusual patterns in coupon redemption, helping to detect fraud early. Blocking fraudulent redemptions and setting up automated alerts help businesses monitor suspicious transactions and detect fraud early.
Real-World Examples of Fake Coupon Scams
Lori Ann Talens Case
Lori Ann Talens orchestrated a large-scale counterfeit coupon scheme that deeply affected the retail sector. Talens created fraudulent coupons that replicated legitimate offers, distributing them widely to consumers through various channels. The counterfeit coupon scheme resulted in significant financial losses for retailers.
After the investigation, Talens faced legal consequences (12 years in prison) for her extensive fraudulent activities.
The “Queenpins” Case
The operation was masterminded by Robin Ramirez, with assistance from Marilyn Johnson and Amiko “Amy” Fountain. They created and sold counterfeit coupons through a website called SavvyShopperSite.com, offering discounts or free items like detergent, food, coffee, and diapers. Customers were required to purchase at least $50 worth of coupons, and the site operated on a referral basis to maintain secrecy. The counterfeit coupons were produced in bulk and sold to individuals across the United States.
In 2012, the trio was arrested, and during the investigation, authorities discovered over $25 million worth of counterfeit coupons, along with assets including sports cars, a 40-foot speedboat, and firearms.
Wrapping Up
Coupon fraud is a complex and evolving threat that requires vigilance and proactive measures from both businesses and consumers. Understanding the different types of fake coupons, how they are created, and the methods used to detect and prevent fraud is essential in protecting against financial losses and maintaining trust.
