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Imagine a problem so big -- yet so subtle -- that it’s costing U.S. retailers and manufacturers hundreds of millions of dollars per year. It’s a method of counterfeiting a currency so simple that instructions are available through the click of a mouse. It's a crime so insidious that many people participate unwittingly,with the result that money disappears into a black hole.
Often considered the scam nobody talks about, paper coupon fraud costs are borne mainly by product manufacturers for which the coupon is redeemed, or by the retailer delivering the discount. Rest assured, however, that money is coming out of the pockets of these retailers and manufacturers in the end, through cutbacks in offers and rising product prices to absorb these costs.
Coupon fraud occurs when a coupon that is submitted for redemption – either by a consumer or retailer – is counterfeit or altered, or used in a way that fails to satisfy the terms and conditions for redemption of said coupon. While intent is important in committing an act of fraud, sometimes that line can be blurred in the case of coupons.
With today’s prevalent technology, sophisticated population and high turnover of checkout clerks, creating and using a counterfeit coupon has never been easier. Bar codes (including the newer GS1 DataBar) are easy to create. High-quality art work and graphics can be rendered in the blink of an eye. High-resolution scanners can copy almost anything quickly and efficiently.
What’s especially concerning about coupon fraud are the many different types: counterfeit coupons, copies coupons, reusing coupons, accepting expired coupons, and return fraud, to name just a few.
Now imagine a solution that virtually wipes out the problem and puts the money back in the pockets of retailers and manufacturers. Imagine a method that ensures that coupons can't be copied and distributed, a system where coupons can’t be sent for settlement without a purchase. While not easy, this solution is in practice today and has the potential to save would-be lost dollars due to fraud.