The $40 Million Counterfeit Coupon Caper

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Talk about extreme couponing! Three women in Arizona were arrested recently for selling counterfeit coupons—a lot of counterfeit coupons. After an eight-week undercover investigation, police raided three homes in the Phoenix area, seized $40 million worth of bogus coupons, and arrested the women, who were enjoying a life of “opulence and the money was the equivalent of drug cartel-type of stuff,” according to the police.

Last week, the Associated Press reported that three middle-aged women in Phoenix were busted by police for involvement in an enormous counterfeit couponing ring. Originally, police estimated that some $25 million worth of coupons was confiscated. Local TV station KPHO has since noted that the estimated value of the coupons is actually $40 million.

In addition to the coupons, police seized $2 million worth of assets from the women’s homes, including $240,000 in vehicles, 22 guns, and a 40-foot speed boat. The scene at these homes, which sounds like something out of a rap video, indicates that the women, in their 40s and 50s, were hardly your prototypical thrifty coupon clippers. Sgt. David Lake, who led the Phoenix Police Department’s investigation into the coupon caper, told KPHO that the women involved in the illegal ring were living the high life:

“The opulence and the money was the equivalent of drug cartel-type of stuff. That’s the type of money they had,” Lake said.

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The women allegedly purchased the fake coupons overseas and then resold them at eBay and sites such as savvyshoppersite.com. Selling counterfeit coupons is obviously illegal, and the site’s FAQ section discusses the tricky territory about the legality of buying and selling legitimate coupons:

You should not advertise that you have purchased any coupon. However, there are not any laws that prohibit the sale or purchase of coupons.

Manufacturers do not endorse or authorize the sale of their coupons. Some coupons state items are void if sold or transferred. For this reason, you will see many people who sell coupons disclaim, you are not actually buying the coupon, but instead paying for the time involved to find, sort, mail, etc.

Interestingly, the site has a “Wall of Shame” section devoted to “Bad Check Writers, Con Artists and Scammers,” and none of the trio of women recently arrested are listed.

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The police’s eight-week investigation, which involved undercover operations in which counterfeit coupons were purchased, was launched after victim companies such as Procter & Gamble and Hershey and the non-profit Coupon Information Center hired private investigators to find out the origin of counterfeit coupons hitting the market. Investigators contacted the Phoenix Police Department, leading to the arrests of the three women—two of whom have gone public swearing that they had no knowledge the coupons were counterfeit. The FBI is now said to be involved in an investigation to figure out where the fake coupons were made.

Couponing has grown enormously popular in recent years due to the Great Recession and the possibility of saving big money via strategies shown on the TLC program “Extreme Couponing.” The couponers featured routinely buy coupons from clipping services, even though the legality of doing so is questionable, and there have been confirmed incidences of counterfeit coupons being used on the show.

In a press release about the Arizona coupon counterfeiting ring, the Coupon Information Center’s Bud Miller said, “This case clearly demonstrates the dangers of purchasing coupons on the Internet, whether it is from independent websites, e-mail or from online auctions”:

“Coupon buyers expose themselves to the possibility of becoming involved with counterfeits, stolen property or other criminal activities. They may also expose themselves to additional risk by providing their names, home addresses and financial information to organized crime rings.”

(MORE: Are the Money-Saving Strategies on ‘Extreme Couponing’ Bogus?)

It’s not just retailers, manufacturers, and law-enforcement authorities who advise against buying coupons. Some coupon enthusiasts come down against the practice as well. In one of Jill Cataldo’s columns, the “Super Couponing” expert writes plainly:

Even though many places sell coupons online, you should never buy them. I have never purchased coupons from a clipping service or an auction site.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

17 comments
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Bill Clarke
Bill Clarke

And now there's another case - details at couponsinthenews-dot-com - from three middle-aged women, to a college kid, coupon fraud is apparently getting too easy.

Janet McMonagle
Janet McMonagle

Any real couponer who watched Extreme Couponing could spot the fakes.  Over and over and over.  Even on the finale last year, when they "awarded" the "Golden Shopping Cart" to a ministry student who used hundreds of dollars worth of counterfeit coupons for Tide.  It was that obvious.  The media ignores this for the most part because of the economic ties to Discovery Communications LLC.  Or, the elite class making the decisions in media reporting just dont understand couponing and could not realize just how major this was, week after week featuring counterfeit coupons from Ebay, and what that must mean.

Only now is there the briefest nod in the mainstream media to the widespread problem of counterfeit couponing - because with the FBI involved, it cannot be ignored.  The media has been ignoring Bud Miller for years.  He's been telling the truth about this stuff every day.  He publishes a list of counterfeit coupons that retailers check at the cash register.  But he cannot publish everything - and some cashiers, believing that this must be ok because they saw this coupon on Extreme Couponing go right ahead and manually key it in.

The counterfeits from Hershey and Proctor and Gamble have been well known by real couponers for a long time, but the broadcasts featured them prominently.  Look at Ebay.  Those are everywhere.  After Bar-S foods withdrew a coupon that was popular with their real customers due to an outrageous amount of counterfeiting, I challenged several ebay sellers to remove the listing as the coupon - real or counterfeit - would no longer be honored.  The response from one seller was to thank me for letting them know, and a very casual admittance "I buy these in bulk and sell for $".  As if that were ok, no biggie.....

Ebay does act like it is no biggie.  They receive plenty of complaints from couponers.  They do not monitor these auctions at all.  Selling coupons is illegal, just like selling ivory is illegal.  You cannot even post something on ebay that LOOKS like ivory, they are very strict.  But the same counterfeit coupons as ere discovered in a huge FBI bust, no problem.  Even though the items are COMMONLY known by REAL couponers to be counterfeit.  The corporations involved should sue Ebay for being a fence for stolen goods.  I searched for Free Northern Toilet Paper Coupons today on Ebay.  The counterfeits featured repeatedly on Extreme Couponing that are known to be counterfeit and disowned by the manufacturer are still selling

When you coupon on the level of the people on Extreme Couponing, you KNOW it is counterfeit, but you decide to do it anyway.  The excuses I have read from people on the show are that "it scanned", or "I checked and the stores were reimbursed by the manufacturer".  Of course,  if that is true, the manufacturer has absorbed the loss from the theft.  It is for that reason that I believe that people who pass counterfeit coupons should also be arrested, at least as accessories to crime.

Tony Soprano would be proud.  And rich.

justaname2477
justaname2477

@Janet McMonagle Nice response...with the huge exception that selling coupons is NOT illegal. Just because a manufacturer types ut on the coupon "can not be sold" does not make something illegal. Laws are written by lawmakers...in books...not in the sunday newspaper coupon insert. Now if the lawmakers want to get to together and make it illegal, they can go right ahead. Could you imagine if proctor and gamble typed up "must send $1 to us if you use our coupon....anything else constitutes fraud". Not exactly legit, huh?

Coupons in the News
Coupons in the News

And the other thing worth mentioning is that people knew their website was suspicious for a long time - even their own customers had their suspicions about whether the coupons were legit, but they kept buying them and using them anyway "because they worked".  More info on that angle here:

http://couponsinthenews.com/20... 

Gary McCray
Gary McCray

Cautionary certainly, but in a society that champions both daytime TV reality series featuring "super couponers" and ruthless business CEOs who succeed at any cost, it is hardly surprising.

For the most part we don't value honest labor as being of any importance and instead champion the competitor who will stop at nothing to win.

The coupons themselves are a testament to our shallowness and market driven consumerism. 

e-Sherpa
e-Sherpa

"reality" series. 

Coupons are just formalized stealing from fellow consumers. 

Lisa18
Lisa18

 Coupons are sent out from manufacturers and stores to entice people to buy their products. If done legally, it's not stealing. It's a way of getting more people to buy a company's product and get more money out of your pocket.

Say you only eat Jiff peanut butter. Well Peter Pan wants you to just eat their peanut butter. You're not likely to try Peter Pan at a regular price. But if you can get Peter Pan peanut butter for $1 cheaper than Jiff, than you're more likely to try it. And if you find it tastes better and decide to just eat Peter Pan from now on, well Peter Pan will have sacrificed $1 to gain a new customer.

I use coupons. I also work at Kroger. I am not stealing from Kroger or any customer or fellow coworker when I use a coupon. When I use a coupon, like using $1 off Colgate coupon, I save $1. Then Kroger will send the coupon I used to Colgate who will then send Kroger $1 plus 8cents for accepting the coupon. Kroger made a gain of 8cents when I used the coupon. And if I find that I prefer Colgate to Aim, then I'm more likely to spend an extra few cents to buy Colgate than Aim. Thus, Colgate has gained a consumer.

Coupons in the News
Coupons in the News

And the scary thing is, their site was under suspicion for a long time, and even some of their own customers had their doubts about these coupons, but bought and used them anyway.  More on that angle here:

http://couponsinthenews.com/20...

sixtymile
sixtymile

"confirmed incidences" -- what is that? try "confirmed incidents".

e-Sherpa
e-Sherpa

Meet "Sixtymile" -- Correcting gramar and syntax on the internet for the past 3 weeks with only a few trillion pages to go.  Oops, I left one more to fix. 

The Krazy Coupon Lady
The Krazy Coupon Lady

Watch The Krazy Coupon Lady's commentary on the monetary loss of coupon manufacturers and the red flags consumers could have spotted from the criminal-ring. 

http://thekrazycouponlady.com/...

Coupons in the News
Coupons in the News

And the sad part is, this site has been pegged as being very suspicious for a long time - even some of their own customers had suspicions about whether these coupons were legit, but they kept buying and using them anyway.  There's more on that part of the story here: 

http://couponsinthenews.com/20...

Bill Clarke
Bill Clarke

And what's interesting is that there were suspicions about this site for so long - even some of their own customers had questions about whether the coupons were legit, but bought them and used them anyway.  Thought you might be interested in that angle, here: 

http://couponsinthenews.com/20...

Bill Clarke
Bill Clarke

And what's interesting is that there were so many suspicions about this site for so long - even some of their own customers questioned whether the coupons were legit, but bought and used them anyway.  Thought you might be interested in that angle:

http://couponsinthenews.com/20...