MARTIN SLOANE | Supermarket Shopper Free product coupon costs shoppers plenty

Coupon fraud and misredemption take many forms. At the recent conference of the Association of Coupon Professionals, I learned of several interesting examples.
Coupons for high-value products, such as baby formula, are magnets for fraudulent misredemption. Art Gann, the associate director of corporate security for Bristol-Myers Squibb Co., told the ACP audience of a free product coupon for a 1-pound can of Mead Johnson Enfamil, which has a retail price of $10 to $14. The coupon was created in 1997 for limited distribution in California's WIC (women, infants, children) program.
Double trouble
Within three months after the first free Enfamil coupons were distributed, counterfeits began appearing in California. They soon turned up at supermarket and drug chain checkouts counters in Arizona, Colorado and New Mexico. The WIC distribution of this free Enfamil coupon ended in July of 1998. However, the counterfeiting continued. By the end of 1998, the counterfeiters had redeemed twice as many coupons as Mead Johnson printed! Gann's Bristol-Myers security department sent notices to retailers alerting them to the counterfeits and asking them not to redeem the blue and white Enfamil coupons. The counterfeiters promptly changed the coupon to a different set of colors. When the Enfamil was downsized from 16 ounces to 14.3 ounces, the counterfeiters made the change on the free coupons. Every few months, the counterfeiters have advanced the expiration date printed on the coupon.
In July 2001, Gann received word that the free Enfamil coupons had started to appear at K-Marts in Buffalo, N.Y. According to Gann, Ahmad Tahir and Anthony Shoushani supposedly drove from Denver to Buffalo with 5,000 counterfeit Enfamil coupons. At each store in Buffalo they redeemed a dozen or more coupons, took the Enfamil to their car, went back to the store again and again, each time checking out at a different register in order to avoid suspicion. In nine days they redeemed more than 2,500 coupons and received more than $30,000 worth of Enfamil. Finally, a K-Mart associate recognized the bogus coupon, ran after them and took down their license plate number. On their way back to Denver, the two were arrested in Ohio. They pleaded guilty to two counts of forgery, receiving stolen property and theft by deception.
Gann says most of the counterfeit coupons were used to purchase Enfamil that wound up on the shelves of small food shops or sold at flee markets.
Counterfeiting continues
The 1997 free Enfamil coupon is still being counterfeited. Bristol-Meyers no longer distributes coupons to broad-based consumer markets. "It is just bad for business," says Gann.
Internet print-at-home coupons are also being counterfeited and misredeemed, says Bud Miller, manager of the Coupon Information Center in Alexandria, Va. CIC is a not-for-profit association of consumer product manufacturers dedicated to fighting coupon misredemption and fraud. Miller says the coupons are easy to obtain. Miller went to a Web site that offered a print-at-home coupon and used the name, Easter Bunny. It asked for the number of children in the household, and he inserted 32. He also gave a false e-mail address. With this information he was still able to print out the coupon.
Once obtained, computer editing of these print-at-home coupons can increase values, decrease purchase requirements and alter expiration dates. Miller showed me a 75-cent Quilted Northern coupon and a counterfeit of that coupon altered to show a $2 value. CIC is warning manufacturers that supermarket cashiers are not able to distinguish genuine print-at-home coupons from the altered counterfeits. To keep checkout lines moving, they will feel obligated to accept suspicious and low quality printed coupons.
Cost of corruption
Coupon industry experts say misredemption and fraud costs manufacturers between $250 and $500 million annually. No one knows for sure. Doubtless, it impacts on the prices we pay for groceries, a good reason for consumers to be concerned. If you have evidence or suspect coupon fraud or misredemption, call Bud Miller at CIC at (703) 684-5307.
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United Feature Syndicate