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Coupons: Traffic Driver, Money Saver, Fraud Enabler

Online coupon users will sell their e-mail address for a buck, CPG Matters reports: "For a $1 coupon, more than half of online coupon printers were willing to give their email address and demographic data. For a $2 coupon, nearly two-thirds were willing to give anything from email address to postal address."

One would think that's a sure-fire loyalty hit, with shoppers getting cheaper stuff and marketers getting demographics and contact info. But retailers and manufacturers have become wary of online coupon fraud -- proprietary software altered, extra coupons produced and traded or sold, bar codes and dollar amounts changed, to the tune of $500 million a year, according to the Grocery Manufacturers of America. The most egregious examples offer free items, such as infant formula, soymilk, meat products and giant bags of dog food.

Grocery receiptAn increasing number of stores have stopped accepting online coupons altogether, or limit their use, the Baltimore Sun reports. Rite-Aid, Giant Foods, Wal-Mart, Harris Teeter, and Safeway are among chains that limit coupon value or the number of discounts redeemed per day, after being burned by fraudulent coupons accepted by undertrained cashiers.

A study from Coupons, Inc. found that online coupon clippers skew higher in income, younger, and more likely to have kids than those who redeem cents-off coupons from newspaper circulars. They get 43 percent of their offers from "general savings sites" like Coupons.com, along with manufacturer, brand, and retailer sites. While just 0.2 percent of the 302 billion coupons distributed last year were online, according to coupon processor CMS Inc., a higher percentage of online coupons are actually redeemed.

In Promo magazine, Peter Meyers of marketing consultancy ICOM predicts that shoppers will launch "individual economic stimulus plans" based on couponing. By Meyers' reckoning, the average family can save 25 percent on staple purchases (food, HABA, paper goods, and cleaning products) by redeeming coupons, the equivalent of $2,400 annually on an $800 monthly spend. That's twice the size of the biggest checks from the feds.

Coupon redemption has been on the decline over the past 10 years. Meyers says 67 percent of ICOM's survey respondents intend to use more coupons, but they're irritated by short expiration dates and "non-targeted offers irrelevant to their needs."

For example, the SmartSource supplement in my Sunday paper included two offers (out of 37) for products I might buy: Barilla pasta and Oral-B toothbrushes. The rest were stuff like Fruit Roll-Ups (ew), Purina Bonz (no dog), and Depends (dear God), along with chain restaurant discounts and therapeutic bedroom slippers. I'll pass, thanks.

Image: Wal-Mart Coupon Challenge receipt by Belinda Hankins Miller via Flickr, CC 2.0

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