FORT LAUDERDALE, Fla. (FNS) -- As more on-line services offer coupons to be redeemed in grocery stores, coupon marketers are warning retailers to be wary of possible scams.
Computer users' easy access to scanners and printers allows them to alter face values, bar codes and security measures, experts said at the Association of Coupon Professionals' recent spring conference here.
"Net fraud is probably just beginning. If it catches on it will undermine the coupon industry as a whole," said Bud Miller, CPP, operations manager at Coupon Information Corporation in Alexandria, Va. Although retailers have not yet reported problems with Net coupons, Miller and others point out how easy it would be for consumers to alter and create their own coupons.
Already, coupon fraud is rampant in the off-line world, accounting for more than $1.5 million in losses annually for consumer product manufacturers. Recently, over $1.2 million was recovered in a coupon fraud case perpetrated by the top executives of Sloan's Associated Food Stores in Bronx, N.Y.
In addition, a free-standing-insert distributor admitted diverting coupons to a store owner engaged in fraudulent coupon redemptions. A consumer goods manufacturer also lost more than $125,000 a month over a counterfeit coupon scam on one product, according to CIC.
In stores, checkers sometimes accept coupons that do not go through the scanner, rather than argue with customers and hold up the line. However, with Net coupons, checkers will have to watch more closely, Miller says. "They are probably going to be pressured to accept them, but they are going to be the police of the system," he said.
Meanwhile, on-line coupon marketers are taking steps to prevent their coupons from being misused. Planet U, a coupon marketer that works with several supermarket chains, downloads the electronic discount to both the retailer's point-of-sale system and to consumers, who activate the discount with their frequent shopper cards. Planet U also sends coupons directly to consumers' homes.
Catalina Marketing's SuperMarkets Online's coupons include a bar code that is scanned at the checkout, and printed on Catalina's coupon printer.
Still, the Association of Coupon Professionals in Schaumburg, Ill., is concerned about the potential for fraud, and it recently organized a task force to set up voluntary guidelines on Internet coupons.
Meanwhile, some coupon marketers' often inconvenient requirement that consumers buy a product first, then get a discount on the next product they buy, could help prevent some of the fraud, Miller added.