Counterfeit Coupons Thrive During the Holiday Shopping Season

The 2011 online holiday shopping season is off to a robust start — increasing 15% from last year in its first 32 days. It appears that fraudsters are also off to a rapid start. As reported by Technorati, counterfeit coupons are popping up on the Internet, often on popular online marketplaces, classified ad sites, social networks, blogs and via email. Counterfeit coupons target both higher priced items and every day items; earlier this year, a student was charged with posting hundreds of thousands of dollars’ worth of counterfeit coupons on the Internet for items ranging from laundry detergent to video game consoles.

The fraudulent practice is a real problem for manufacturers and retailers alike. According to the Coupon Information Center, a nonprofit organization focused on fighting coupon fraud, Internet coupon fraud costs retailers hundreds of millions of dollars. In a two-week period in December 2010, for example, $200,000 worth of online counterfeit coupons for Tide detergent were redeemed by consumers. Ironically, Proctor & Gamble, the manufacturer of Tide and largest coupons issuer in the US, has never issued a print-at-home coupon.

Counterfeit coupons can be harmful to consumers as well. Not only do consumers sometimes risk wasting paying a nominal amount for a non-redeemable coupon (such as those offered on online marketplaces), they may unknowingly download viruses or spyware when clicking on coupon offers. Perhaps more importantly, consumers may also suffer if retailers plagued with coupon fraud begin to reject certain coupons or pass on their losses in the form of higher prices. In fact, some stores reportedly no longer accept print-at-home coupons due to the prevalence of fakes.

So, what are retail and consumer brands and consumers to do? For starters, brands need to be able to detect the online abuse so that they can effectively address it. There are also a number of tips for consumers to spot and avoid coupon scams.