Illegal to sell coupons? No!

When doing a search on eBay today, I noticed a bunch of coupons for sale. Huh, I thought. Is that legal? Like most people, I have heard that selling coupons is illegal. Spoke to Husband about it, and he said that’s what he thought. So, I decided to do some research. The results were quite interesting.

A search of “illegal to sell coupons” on Google returned about 6,700,000 results. After clicking on all the results of the first 10 pages, I discovered that all those sites included that statement. Many were adamant about the legality of such practices. None named a legal statute. Could we all be misled on this topic?

I then went to the website for the Federal Trade Commission. If anyone would know the answer, it would happen to be them, right? The same search on their site returned a bunch of results, but here the tone was completely different. In fact, I was directed to a publication that puts “coupon fraud” in an entirely new light. The publication: Costly Coupon Scams, describes what is illegal in the coupon realm.

The first two paragraphs tell the story:
Cents-off coupons are providing big bucks for scam artists who offer business opportunity and work-at-home schemes featuring coupon certificate booklets and coupon clipping services. Using the Internet to market these so-called opportunities, fraudulent promoters are promising entrepreneurs, charity groups and consumers earnings of “hundreds per week” and “thousands per month” simply by selling coupon certificate booklets or cutting coupons at home. The fact is that consumers and manufacturers are getting clipped in these costly – and deceptive-coupon capers.
There’s only one legitimate way to use a coupon: Cut it out of the newspaper or other source and use it toward the purchase of the designated product. A coupon is meant to be used only by the consumer who buys the product for which the coupon is printed. Selling or transferring coupons to a third party violates most manufacturers’ coupon redemption policies – and usually voids the coupon.

Nowhere in the publication does it say that selling coupons is illegal – just that it “usually voids the coupon.”

Further down the page, in a section titled “Coupon Clipping Scam” is some more interesting info:
A related scam centers on coupon clipping. Promoters make overblown promises about the income or profit potential for consumers working at home clipping coupons. These claims certainly sound appealing, but they are unsubstantiated at best and bold lies at worst. Making money – particularly “hundreds per week” and “thousands per month” – isn’t that easy. Success generally requires hard work.
Sometimes, fraudulent promoters use coupons clipped by consumers to fill orders from other consumers who redeem the coupon certificates. Many manufacturers have policies that do not allow coupons to be transferred. That is, the coupons that are being sold may not be redeemed by the retailer or manufacturer.

Again, they don’t say that it is illegal to sell or transfer coupons – just that “The coupons that are being sold may not be redeemed….”

Perhaps I’m wrong, but wouldn’t it make sense, if selling coupons were truly illegal, that the FTC would say so?

My guess is that this is an urban legend, started by manufacturers and coupon issuers, as a way to protect their marketing research. When they publish coupons, and the coupons are redeemed, they track the effectiveness of that promotion in a variety of ways. They track the stores that redeem them, the cities where redeemed, etc. When people exchange coupons, it messes up their results. They don’t know if the coupons redeemed in one city were as a result of being published in that city, or it they should attribute the redemption to another city of publication.

The CIC (Coupon Information Corporation) is a nonprofit association of consumer product manufacturers dedicated to fighting coupon misredemption and fraud. They proudly announce on their home page: The CIC and its members have worked with federal, state, and local law enforcement officials on every significant coupon fraud case since the CIC began operations in 1986.

On their FAQ page, they have 2 items I found interesting:

Can I sell my extra coupons?
No, there is no legitimate way to sell your unwanted coupons.The sale or transfer of coupons is a violation of virtually all manufacturers’ coupon redemption policies. These policies are generally printed on the coupons or is available from the manufacturer upon request. The sale or transfer voids the coupon.
Persons purchasing coupons have often been associated with organized criminal activities. They often purchase the coupons as one aspect of a scheme to defraud the coupon issuers/manufacturers, usually by seeking to redeem coupons without purchasing any products. Individuals selling coupons to such crime rings have been charged with and convicted of criminal violations.

Can I buy coupons?
No, there are good reasons not to purchase coupons. In addition to being in violation of the manufacturers’ policies, it simply does not make sense to pay for something that is given away for free.
Coupons being sold on the Internet or by other means may be stolen property or counterfeit. Individuals attempting to use these coupons may be subject to prosecution.

I noticed that they Did Not say that buying and selling coupons is illegal. They listed specific situations where it might be illegal – to defraud the issuer/manufacturer, or the selling of stolen or counterfeit property.

Let’s let this urban legend die. Coupons, in the hands of lawful consumers, are a great hedge against inflation and the rising prices on things we need and use. Putting more coupons in the hands of lawful consumers, who will use them as intended, makes good money sense. It helps the consumer, AND sells more of the manufacturer’s products, which is why they publish them in the first place.

By the way, I’m not an attorney, and this isn’t legal advice. Before you do anything you’re worried might be illegal, check with an attorney. When you do, make sure he knows the law, and doesn’t just spout “common knowledge.” In this case, “common knowledge” appears to be “common misunderstanding.”

1 thought on “Illegal to sell coupons? No!

  1. Bob

    Very insightful and well researched. I’ve bought some coupons on Ebay and they’ve proved very valuable for me.

    I find it interesting for someone to say it makes no sense to purchase coupons when you can get them free. Umm, how about because buying them, sometimes for pennies on the dollar, saves you money?? lol

    The seller makes money and the buyer saves money. Hard to complain about that.

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