Coupon fraud involves a form of financial deceit based on the use of fake coupons or the misuse of real discount coupons as part of a scheme to get goods, services, or money in an unlawful manner. Coupon fraud occurs when an individual uses coupons in a way that violates the terms set by the issuer. These violations involve two important legal elements of coupon fraud including the intent to deceive and a financial loss for the issuer of the coupons. Coupon fraud statistics show that retailers in the United States lose between $300 million and $600 million per year due to the use of fraudulent or expired coupons.

There are several types of coupon fraud including using expired coupons, duplicating coupons, or altering coupon values. Other examples include using manufacturer coupons for non qualifying items or redeeming coupons without making a purchase. Organized coupon fraud schemes may involve selling counterfeit coupons or abusing digital coupon systems. These actions are treated as criminal offenses because they involve intentional misrepresentation for financial gain. Legal defense for those facing charges of coupon fraud involves hiring a criminal defense attorney familiar with Oklahoma's fraud laws.

What is Coupon Fraud?

Coupon fraud is defined as the intentional misuse, alteration, duplication, or false redemption of coupons in order to obtain goods, services, or money in violation of the coupon issuer’s terms and conditions. Coupon fraud involves deliberate deception rather than accidental misuse of a genuine coupon. This type of fraud targets retailers, manufacturers, or online retailers.

Manufacturers and retailers are impacted when counterfeit coupons are redeemed, and the losses from this fraud are then passed on to the consumer in terms of higher prices and decreased acceptance of legitimate coupons.

The Coupon Information Corporation (CIC) posts on its website an extensive list of counterfeit coupons, alerting consumers, manufacturers, retailers, and law enforcement to fraudulent coupon schemes. The CIC claims that, with its assistance, fraud schemes totaling over $750 million have been uncovered. The CIC is critical of a popular reality series which focus on the extreme use of coupons, saying the series depicts illegal coupon use and encourages coupon fraud, or using a coupon in any manner other than its intended purpose. Coupon use is exploding, and with its growth comes an increase in coupon fraud in Oklahoma and across the United States.

In Oklahoma, there isn’t a specific statute titled “coupon fraud,” but using forged, altered, duplicated, or otherwise fraudulent coupons to obtain goods or cash could be prosecuted under general fraud or false pretenses laws because it involves intentional deception to obtain something of value. The relevant Oklahoma statutes used for prosecuting coupon fraud are listed below.

• 21 O.S. § 1542: Obtaining property or signature under false pretenses.
• 21 O.S. § 1541.1 (and related sections): Obtaining or attempting to obtain property by trick or deception / false pretenses.
• 21 O.S. § 1541.6: Refund fraud (used when the scheme involves trying to obtain a refund using false/fictitious identifying information, etc.)
• 21 O.S. § 1592 - forgery statutes for case involves counterfeit/forged coupons

These statutes outline acts of general fraud and deception as well as the punishments for convictions of these crimes.

What is the Punishment for Coupon Fraud?

Coupon fraud is charged as a misdemeanor or felony depending on the type of fraud and the amounts of money involved. Punishment for misdemeanor coupon fraud includes a $1,000 fine and up to one year in county jail. The punishment for felony coupon fraud includes a fine of up to $15,000 and up to ten years incarceration with the Oklahoma Department of Corrections.

Below are some common coupon scams and the corresponding punishments.

Counterfeit coupons (using/trying to use fake coupons as real)

Most commonly charged as uttering a forged instrument (21 O.S. § 1592) when someone presents a forged/counterfeit “instrument” as true. The punishments for creating or using counterfeit coupons are listed below.

• < $1,000: misdemeanor, up to 1 year county jail and/or up to $1,000 fine
• $1,000–$2,499.99: felony, up to 2 years DOC (or up to 1 year county jail) and/or up to $1,000 fine
• $2,500–$14,999.99: felony, up to 5 years DOC (or up to 1 year county jail) and/or up to $1,000 fine
• ≥ $15,000: felony, up to 8 years DOC and/or up to $1,000 fine

Barcode swapping (UPC label switching / altering prices)

Most directly matches UPC label / retail receipt fraud under 21 O.S. § 1542. The punishments for barcode swapping are listed below.

• < $1,000: misdemeanor, up to 1 year county jail and/or fine up to 3× the value
• ≥ $1,000: felony, up to 3 years DOC (or up to 1 year county jail) and/or fine up to 3× the value
• Aggregation: multiple acts in a plan/scheme can be combined to reach a higher value tier

Stacking digital coupons (improperly combining discounts to get items cheaper/free)

This is often charged as obtaining/attempting to obtain property by trick or deception. The punishments for stacking digital coupons are listed below.

• If the value is < $1,000: 21 O.S. § 1541.1 misdemeanor — up to 1 year county jail and/or up to $1,000 fine
• If the value is ≥ $1,000: 21 O.S. § 1541.2v1 felony — up to 10 years DOC and/or up to $5,000 fine, plus restitution

What is an Example Case of Coupon Fraud?

An example of coupon fraud is the use of counterfeit coupons to purchase Tide laundry detergent. According to an FBI.gov over a two to three week period in 2010, approximately $200,000 worth of counterfeit Tide coupons were redeemed, with the bulk of the loss being borne by Proctor and Gamble, manufacturer of Tide, and the retailers who honored the fraudulent coupons. The intent behind coupon fraud is to get an unauthorized financial advantage. The act qualifies as fraud because it relies on misrepresentation.

The FBI arrested "The Coupon Dude," a 22-year-old college student accused of counterfeiting coupons. Lucas Townsend Henderson, of Lubbock, Texas, is accused of not only creating and distributing fraudulent coupons online, but also of writing an instruction manual teaching readers how to do the same. Henderson made the counterfeit coupons and counterfeiting guide, entitled "The 6 Commandments of Coupon Making," available online via internet forums and message boards. The FBI found Henderson via an IP tracking device.

Unsealed charging documents from the FBI show that Lucas Henderson was charged with wire fraud and trafficking in counterfeit goods. Henderson allegedly created counterfeit coupons for a variety of consumer goods ranging from low-priced household goods to high-end electronics, such as X-Box and Playstation. Henderson's counterfeit coupons included unauthorized use of the "Powered by SmartSource" logo.  

SmartSource.com is one of the leading providers of internet printable coupons. Henderson was charged last week with one count of wire fraud and one count of trafficking in counterfeit goods. If convicted, he faces up to 20 years in Federal prison for wire fraud and up to 10 years for counterfeiting.

What is the Legal Defense for Coupon Fraud?

The legal defense for coupon fraud focuses on challenging intent, accuracy, and procedural validity. Coupon fraud requires proof of intentional deception. An Oklahoma City criminal defense lawyer defends their client by arguing lack of intent if the coupon use results from mistake, confusion, or misunderstanding of terms. Mistaken use weakens fraud allegations because fraud requires knowing misrepresentation. The defense also challenges whether the coupon rules were clear and accessible. Ambiguous terms reduce criminal liability.

The legal defense for coupon fraud also examines evidence and enforcement conduct. A defense attorney questions whether the coupon was actually invalid or improperly redeemed. Insufficient proof weakens the prosecution case. The defense raises procedural defenses if law enforcement violated search, seizure, or due process rules. Mitigation arguments also apply. These arguments include minimal value involved, first offense status, or immediate repayment. The overall defense strategy seeks dismissal, charge reduction, or alternative resolution such as restitution instead of conviction. If you have been accused of fraud or suspect you may be under investigation for white collar criminal activity, setup a consultation with an Oklahoma fraud attorney as soon as possible.