Couponing Ethics: Is it wrong to buy and sell coupons?

By / 3 years ago / Shopping News / 9 Comments

This is the third in a series of articles exploring couponing ethics.
You may also enjoy the previous articles in this series:
Couponing Ethics: Reader made countless photocopies of coupons
Couponing Ethics: Blogger advocates coupon misuse for deeper discounts


 

Among coupon enthusiasts, there is perhaps no more controversial topic than that of the resale of coupons. While it may seem illogical to pay for coupons, for some shoppers, the temptation to buy larger quantities of identical coupons is great. And, it’s also pretty easy to buy coupons on the Internet. There are quite a few coupon clipping services online where shoppers can buy coupons, and popular auction sites often have a plethora of coupon listings too.

With all of these coupons “for sale,” it must be okay to buy and sell coupons, right? Even though there are many places selling coupons online, in most cases it is not okay to sell them. And, I completely understand that this may be confusing to new coupon users. Years ago, when I first began couponing at a more-enthusiastic level, I saw numerous clipping services online and assumed that because they were there, the services were legitimate and legal. (As an aside, I have not purchased coupons from a clipping service or an auction site.)

But, as I became more educated about the legal terms and ramifications of buying and selling coupons, I understood that in most cases, coupons should not be bought or sold. Let’s take a look at the fine print of some manufacturer coupons:

  • Coupons may not be combined, sold, auctioned, or otherwise transferred or reproduced.
  • Void if transferred, sold, auctioned, reproduced or altered from original. Any other use constitutes fraud.
  • Coupon cannot be bought, transferred or sold.

An argument I often hear is, “I bought the newspaper or printed the coupon. It’s mine, and I can do whatever I want with it.” The websites of many clipping services often state that you’re not actually paying for coupons, but rather, “you’re paying for our time to clip them.” (If that is true, why does a $5 coupon cost more than a .50 coupon? Does it really take longer to cut a higher-dollar-value coupon out?)

Unfortunately, neither argument can be true.

It’s important to think of a coupon as a contract between you, the manufacturer and the store. While you may own the actual piece of paper that you cut out of the newspaper inserts or print online, you do not own the contract itself. If at any point any of the terms of this coupon’s contract are violated, the coupon is considered to be void, and the manufacturer does not have to pay out the reimbursement for that coupon.

How does the manufacturer know if a coupon has been sold? There is no single, definitive way to know. So, coupon redemption houses and clearinghouses utilize a variety of indicators to identify whether a coupon may have been sold at some point. If the manufacturer believes a coupon may have been sold, the coupon is void, and they do not have to reimburse the store for it. One method of identifying possibly-sold coupons is via the coupon’s condition. The term “gang-cutting” refers to the practice of stacking multiple, like insert pages on top of one another, then cutting through the entire stack at the same time, either with a scissors or with a paper cutter. This is the method most often used to cut individual coupons by resellers. Gang-cut coupons are also often in mint condition, meaning that they haven’t been held or handled enough to indicate that they were hand-cut by consumers.

Look at the terms on this coupon:

  • Void if… coupon is reproduced, gang cut or mint condition.

Whether you like it or not, or wish to continue arguing “a coupon it’s mine, I can do what I want with it,” the truth is that the manufacturer ultimately holds all of the cards in this particular game. Again, you own the paper it’s on — not the actual exchange of money that it represents. Even if your store accepts coupons that you purchased, which were gang-cut by a reseller, the manufacturer may refuse to reimburse your store. Then, your store is forced to take a financial loss. If you wouldn’t shoplift from your store, you shouldn’t pass coupons that they will not be reimbursed for either. Some stores have added clauses to their coupon policies that they will not accept any coupons that appear to be gang-cut either, because again — as far as the manufacturer is concerned, those coupons are void. (Learn more about the gang-cutting of coupons at this link.)

Another argument I often hear is “the manufacturer prints all of these coupons, why do they care how many we use?” I’ve previously written another post on this topic, but in brief, it is important to understand that a manufacturer budgets for a free-standing insert coupon campaign fully expecting only a small percentage of those insert coupons to be redeemed. With the average coupon redemption typically running at less than 6%, it means that statistically speaking, 94% of the coupons a company issues for a particular campaign will not be redeemed. But, it also means that when a company runs a coupon campaign, their expected payout for the coupons redeemed during that promotion will also likely fall into that same low, expected range of return.

Of course, the company wants as many people to buy its product as possible, but there’s a newer element in the mix that companies have had to contend with – the extreme couponer. When a extreme couponer orders large numbers of coupons online, an “artificial demand” is created for that product. The same shopper that might buy one, two, four or five of a product might now be buying 20, 30, 50 or more of them. And while the shopper certainly can buy however many the store will allow them to, like it or not, a manufacturer isn’t too thrilled about the same person redeeming that many coupons for the same item. They want us to buy their products, but when the quantities move into the extreme range, they also know that person is purchasing far more than he or she would normally buy if coupons weren’t a factor.

Manufacturers are reacting. Any regular coupon shopper has noticed that for many coupons, the statement “Limit 4 Like Coupons Per Transaction” appears, the expiration dates are getting shorter, and in some cases, dollar values are going down too. Why? According to some of the manufacturers I spoke with at an industry conference last year, the shortened dates and lowered values are being used to combat the resale of coupons. With shortened dates, the window of time that those coupons can end up on the resale market is shortened as well. Another manufacturer’s representative was even more candid. The rep said “If we see too many of our coupons on Ebay, we know the dollar value was too high, and the value of the coupons we issue goes down next month.” (Learn more about manufacturers’ reactions to resale and over-redemption at this link.)

Another significant reason not to buy coupons online is coupon fraud. The number of completely-free product coupons being “sold” online is surprisingly widespread. Again, the fact that they’re being sold would void most of these coupons if they were legitimate in the first place… but many of them aren’t. If you look, you can find numerous coupons that are already on the CIC’s fraud list being sold online, seemingly “legitimate.” And, when people buy coupons and get an envelope full of color photocopies, or worse, professionally-printed, realistic-looking counterfeits, is their inclination going to be, “Well, I shouldn’t use these because they don’t quite look real?” It’s more probable that they’ll think “I paid for these, I’m going to use them!” If you don’t purchase coupons in the first place, you nearly eliminate the risk of passing counterfeit coupons — as well as the risk of being prosecuted for passing counterfeit coupons.

The simplest reason not to buy or sell coupons, though, is because the coupons themselves state not to do it. If the ethics of what we do are important to you, following the rules that the manufacturers have set is the best and most ethical way to enjoy the savings that coupons can provide to us.


If selling coupons is wrong, why does Ebay and other sites allow it? Why don’t the manufacturers do anything?

Indeed, some coupons don’t contain a “Void if Sold” clause, though most do. But if you look at the image above, you’ll see that this particular coupon does not contain this clause. Technically, if the coupon does not state that it can’t be sold or auctioned, there would likely be no penalties for doing so.

Ebay has a special policy specifically for coupon resale in which they state that sellers should review coupon terms to make sure the coupon can be sold… and then they go on to say that they don’t usually remove coupon listings anyway. They also warn that stores may not accept coupons that they believe have been sold:

Make sure you review the terms printed on the coupon before you sell it. The terms on some coupons state that selling them is restricted or not allowed. While we don’t monitor the site for possible violations, and we usually don’t remove listings based on third-party contracts, we ask that you carefully review the coupon’s terms and conditions when you’re deciding if you want to list it.

Also, sellers can’t claim that the price of the coupon is based on the value of the labor involved in clipping the coupons instead of the coupons themselves. Under eBay rules, the coupons themselves are the items being sold.

Coupon buyers should also note that retailers might refuse to accept coupons that have been obtained in a way that violates the terms on the coupon.

Ebay seems more concerned with collecting fees than stopping coupon fraud, and they’re placing the responsibility to sell valid coupons back onto the sellers. Even when counterfeit coupons appear on Ebay, they often allow the auctions to continue. Check out this news report about people who bought fake coupons online and how angry they were that they were out significant sums of money… that they paid for useless pieces of paper. Even after this report aired, the same counterfeit coupons were still available to purchase on Ebay. And if you bought them, Ebay and Paypal would do nothing, allowing the sellers to keep the money paid — even when the people that received counterfeit coupons filed disputes. As far as Ebay seems to be concerned, you paid for a piece of paper, and you got one.

I’ve received many emails over the years from shoppers who state something like “Because Ebay allows you to buy coupons, I thought it was okay. Why don’t the manufacturers or the CIC do anything?” While the CIC is the industry’s watchdog group and maintains a regularly-updated list of counterfeit coupons that are circulating, it primarily represents the companies and manufacturers that are members of its organization. The CIC is constantly monitoring and releasing alerts on fraudulent coupons that are circulating, But, if a manufacturer chooses not to be represented by the CIC, that manufacturer is left to monitor and prosecute coupon fraud on their own — or not.

9 Comments

  • JillCataldoSpoofer29. Feb, 2012

    Jill. While I appreciate your research and arguement here I do not agree with you. Coupons have entirely to many loopholes and are NOT considered a contract with us, the store and the MFC. For example one coupon above states “Void if transferred to any person”. Well why we can all interpret this in many different ways it could also be left room to say that when you buy the newspaper it is trnsfrd from the store making it void. Or if the newspaper company takes it to a store to be sold it becomes void. When you purchase coupons online you are paying for “clipping”. I understand that you say “Why is 1 more expensive than the other” but that is still not your call. That is your “opinion” but that statement has no legal basis and this is why coupons have never been removed from the web! I for a fact know that MFC and companies have sent legal notices to several clipping service websites to be taken down and have failed. So put the topic to rest!

  • helptheold29. Feb, 2012

    Thanks for another great article Jill! I was wondering, can you recommend any websites for sending coupons to for military families? I often end up with a bunch of ones I don’t use & I’d love to send them where they can do some good.

  • Flag129. Feb, 2012

    Nicely written Jill. Always appreciate you trying to teach the correct way.

  • rswehrle29. Feb, 2012

    Let’s be honest. The cost of food is going up. But if all manufacturers stopped producing coupons and if the stores just lowered their prices, then it would be benificial for every shopper. The name of the game is to make your grocery money stretch, but because of all the “wheeling and dealing” with coupons, there is a desire to make it stretch farther and not everyone plays by the same rules thus there is going to be fraud. Elminate the coupons, eliminate the fraud. Simple as that.

  • oyxgen momma29. Feb, 2012

    What CIC and the manufactures have actually been able to do.

    Force the clippers and ebay that sell whole inserts to be able to prove where they are getting their inserts. In other words. If that person is getting their inserts buy buying them legitimately they have been allowed to stay in business. If they were going to the recycle bin..they are not.

    Beyond that Manufacturers cannot do anything because it’s not ACTUALLY ILLEGAL TO SELL COUPONS. CIC has no actual means of stopping anyone. They can scare people, and they certainly can help be on the look out for fraud..and are very helpful with that…but they don’t have the actual legal means to stop anything.

    CIC and the Manu’s however cannot and have been trying unsuccessfully for 8 years to put a stop to ebay..and don’t expect ebay to go anywhere in the sell of coupons. It’s a piece of paper. Manufactures can put whatever fancy legal wording they want on it, but until it’s getting redeemed at the register it doesn’t mean anything, unless it’s being copied illegally. Joe Schmoe that sells it for a nickle, it doesn’t matter.

    Honestly I don’t even care about the sold coupons on ebay..if they would just stop selling the completely fake coupons that are sold on ebay….I would be ecstatic. CIC should be putting 99% of their focus there. That is what is hurting all of us, not some mom that is buying 20 Cereal coupons. It’s the one buying the $9 P&G tide coupons..that we ALL KNOW IS FAKE!

    I realize Jill your trying to sound super knowledgeable on the ethics of coupons, but if manu’s had the legal means to stop all selling of coupons..they would of done it by now, and they certainly wouldn’t of started with ebay..the people with the biggest pockets and attorney’s..they would of started smallest with sites that have no means to protect themselves, and the only means they could was force those that were selling whole inserts to buy their inserts from an actual distributor. Beyond that, they’ve been able to do nothing, and they’ve never gone after a forum in any way…and they could shut them down in a heart beat…except obviously they don’t have the legal means because their is no law on the book to back them up.

  • momof401. Mar, 2012

    We can sit here and debate whether or not it is legal or morally ethical (I believe it to be morally wrong at that is my opinion) and we can debate all day long but the fact of the matter is because such practices like this are taking place it is hurting all of us couponers in various ways.

    As Jill stated when a manufacture puts out these coupons they dont expect a high redemption rate, and when more than they expect are redeemed (because of purchasing on line, dumpster diving and other ridiculous practices) the next round of coupons they issue have shorter expiration dates, limits per transactions and lower values.

    When I started couponing almost 3 years ago we saw $4 airwick coupons, $5 maalox as so on you definitely dont see that anymore. This is in part due to the show as well as the many of people who feel its ok to clear shelves and sell these items at garage sales.

    IMO when people obtain an excessive amount of coupons it leads to fraudulant use, shelve clearing, resale of these items and wiping out warehouses such as walgreens and cvs (did you try to find speed stick deodarant) warehouse wiped clean and while some may only want a few now they cant get them because the coupon expired before they could restock.

    Bottom line this hurts the consumer in so many more ways than just is it legal or not or does e bay have the right to sell them. You can save an incredible amount of $ by following the rules and having some integrity…I will get off my soap box now :)

  • fodacima62101. Mar, 2012

    Jill, while this article is very informative, I can understand why a lot of couponers disagree with a lot of points mentioned.

    For one thing, I have read people rant about reporting to NewsAmerica and Valassis about couponers in boards that sell tons of complete inserts in their areas and up to now, those same couponers are still enjoying brisk business selling complete inserts ranging from .10 to .25 each plus flat rate shipping. While the good side of this is that it keeps the USPS in business, why can’t the inserts publishers do something about widespread selling of inserts on ebay and coupon boards? Can’t they just send a warning to coupon board admins about these type of business activity and these will completely stop? The fact that they won’t send a cease and desist order, simply means they do not have the law to back them up concerning this business activities. If they can stop complete inserts sellers, maybe the newspaper industry will be saved because people who want more coupons will have no other choice but to buy their papers to get more coupons that they want. As to dumpster diving, the authorities should have done something to the TLC show that glorified dumpster diving with one of the participants shown defying a notice that prohibits going inside the dumpster. If they are really serious in cracking down on illegal activities, they know where to start; if there are just more action than talk, then people will probably listen.

    Therefore, if it is not illegal, nothing that they can put on their coupons makes it a law. Unethical trading/selling? probably, but unless they figure out ways and means to totally get rid of all these coupon selling, people will do all they can to stretch their dollar.

  • CWvet01. Mar, 2012

    These are exactly the rules you should follow when learning to coupon! Stay on the light side!

  • coupon674302. Mar, 2012

    Read this on Budget Savy Diva. She also has section on how to tell if coupon is fake.

    NEW FAKE COUPON ALERT

    What are the penalties for coupon fraud?

    Longest prison sentence: 17 years

    Highest financial penalty: $5 million

    Prison sentences of three to five years are not uncommon. Financial penalties generally vary, but have often been in excess of $200,000.

    This is why Budget Savvy Diva is SUCH a great resource – I give you all the updated coupon news happening in your world – so make sure to check back daily. If YOU have a fake coupon – there is a high chance that it will be accepted at the store BUT you can easily be tracked so make sure to know where you are getting your printable coupon information from. MANY fake coupons will be in BRICK format – meaning it will be the only coupon you can print…

    I cannot stress enough about where you get your printable coupon information — I know someone who found out about a “fake” (they did not know at the time) coupon from another deal site and was caught and fine the $2,500.

    This coupon has been confirmed fake

    There is a $2500 reward for For information leading to the successful prosecution of the individual(s) responsible for producing this counterfeit coupon.

    She has pix of $3 Coke coupon.

    It is fake because

    The manufacturer did NOT approve this coupon to be product

    High Value: The value of the coupon is simply to good to be true.

    Thanks! CIC
    And also thanks to Budget Savy Diva.