How can you make $100 million/year "redeeming grocery store coupons"?

from this week’s News of the Weird

This can’t possibly be factually correct, can it?

No it can’t. Remember, journalists write, they do not always calculate. Don’t simply give yourself over to the figures stated in articles, no matter where they are from.


Or, in the case of this periodical, excrete. :slight_smile:

Forgive me!

I thought that said Weekly World News! I really do need to get my eyes checked, I guess. My sincerest apologies to keno and most importantly to Chuck Shepherd.

Here’s the original article on ABC

Here’s a 1997 article linking coupon fraud to terrorism (the first WTC bombing.) According to that site, there’s about $200 million worth of coupon fraud every year.

Another site estimates yearly coupon fraud at $300 million to $600 million.

And here is what appears to be the testimony from a 1998 congressional hearing on coupons and terrorism

Seems like the journalist may have gotten it right.

I recall reading that the mob is in on this big time. I think they essential set up a fake store and then send them into the companies claiming to have sold that companies product and deducted the coupon from the cost, thus getting reimbursed for it. I believe the gov’t will occaisionally do sting operations where they place fake coupons (for non-existing items) into the rags and see who’s dumb enough to return them.

I realized I may have been vague on the second and third cite. Of course I didn’t mean that the $200 million to $600 million of coupon fraud were all related to terrorism. The numbers are just there for frame of reference so we could decide whether $150 million was a plausible figure for just terrorism organizations.

So, does this mean supporting coupons = supporting terrorism? :wink:

I used to deliver papers in our small town. One of the proprietors, known for his “deals”, would purchase all the leftover, Sunday full of coupons papers from me. I didn’t think much of it at the time, assuming that he would just re-sell them at a discount. A couple years later I met a gal that was hired by said proprietor to come in on Sundays, just to clip the coupons out of newspapers.

I suspect that if you have a store capable of using the coupons sent in, that it is fairly profitable to do so.

That’s it. I’m going to retreat into my fantasy world now, where the entire universe is merely absurd.

Oh yeah, coupon fraud is big business, especially back when there were high-priced cigarette coupons all over the place.

Your average unscrupulous corner store owner will just grab some coupons that apply to some item he sells, and send them in for reimbursement. If he’s at all smart, he’ll keep this in line with what he sells—if you send in 100 Cheerios coupons every month, but your store only buys 10 actual boxes of Cheerios per month, people might get wise to it.

Also, many corner-store cashiers are instructed to treat coupons as cash. Unbenknownst to even an honest store owner, a cashier can easily “sell” his own coupons to the store he works for.

In my pizza management days I caught one of my driver’s trying to “swap” some coupons for cash. He normally worked a 4-5 hour shift, but had to leave after about 2 hours due to some sort of problem at home. When I cashed him out he had more coupons than orders (there was a limit of one per order due to discounted pricing on additional pizzas). And several of them ($2.00 off) appeared to have been cut out at one time from a stack of several sheets in a nearly identical pattern.

The scary thing is, I considered him to be a pretty intelligent person - I guess the phone call from home rattled him pretty good.

I couldn’t get to the ABC cite but a Google search recapped the ABC report as quoting Ben Jacobson of Peregrine Group. The same Ben Jacobsen in the congressional hearing cite. So two of the four cites seem to rely upon Ben Jacobsen.

Don’t know what it means but this cite shows Peregrine Group, Inc. of Miami FL, whose President is Lorin Jacobson, was fined for some unspecified indiscretion

The newamerican cite seemed to bounce all over the place with its accusations. The cents-off-site is a creation of an organization created by coupon issuers to police the use of coupons issued by its members. Not to be overly cynical but it seems to be in its own best interest to generate public outcry against fraudulent coupon redemptions, terrorist related or otherwise. I can understand the formation of the cents-off groups to discourage widespread, i.e, millions of coupon clipping housewives/husbands, trying to defraud the issuers.

But the cites provided don’t seem to support the allegation that terrorist groups can generate that kind of revenue. The coupons I see are worth $0.40-$0.50 each, so to generate $100MM/year would require 200,000,000 coupons. For the manpower involved, you could redirect your terrorists from clippling coupons to minimum wage jobs and wind up with more money.

(I know there rebate checks for computers, etc. that can be as much as $100s, but those type of rebates generally require serial numbers and have enough monetary value that security measures are likely in place to prevent fraud. It’s the nickel and dime stuff that nobody keeps track of).

Hmmm…the link works for me. Anyhow, the ABC does cite the same guy. I guess I was reacting more to Tom’s comment questioning the journalism. The figure reported was reported accurately. The question is whether the figure itself is accurate.

Is it possible? Certainly. Plausible? I think it’s just plausible enough. I would like to see how Mr. Peregrine arrived at his figures though. Minimum-wage jobs would NOT generate more money if you think about it. How many coupons can you clip in an hour? Let’s say you can clip one coupon a minute, to err on the side of extreme caution. Let’s say that each coupon is worth, oh, 50 cents. That’s $30/hr. I’d wager we can all clip at least 3.333 coupons a minute to average at $100/hr.

One person working 40 hours a week could thus generate $4000/week, or $208,000 per year. At that rate you only need 480 terrorists working on this scheme.

And I think mine is a VERY conservative estimate. Double your work hours or clip 6 coupons an hour and you’re down to 240 terrorists.

Certainly within the realm of plausibility, IMHO.

Check my math, but I think that’s right.

I admit my math sucks, but I can still prove how ridiculous your theory is.
Sure, if they worked 40 hours per week, maybe they could come up with that kind of cash.

However, you aren’t figuring in the cost of living: Rent, food, clothing, etc. Nor are you accounting for the cost of laundering the coupons. (Not to mention the fact that 480 people have to keep their mouths shut…Yeah right.)

Your math is OK but I don’t think your assumption about 3.33 coupons/minute takes into account having to acquire the coupons to clip them, then bundling them for redemption. Or, as jcmckaing notes, the cost of some place to house this activity.

(I don’t take his point on food and housing for the participants as those are required whether they are clipping coupons or flipping burgers).

I realize that the 3.33/min figure does not take into account acquiring the coupons, but I think that would not take a tremendous extra amount of manpower. OK, let’s say we have to DOUBLE the people. 1000 folk working on such a scheme is not so far out of the question. And I honest-to-God think 1000 people is a very high estimate of the amount of people needed to pull this off. Also, remember that the 3.33/min figure is conservative, IMHO. So is the 40 hrs/week…

I don’t get the 480 people keeping their mouths shut comment, though. Crime rings exist, and they go on, and they certainly can encompass more the 500 people, so why not with coupon fraud?

Do I honestly believe terrorists are making $100 million on coupon fraud? I don’t know, but breaking down the number, it really does not seem far-fetched. Maybe if you halve the number, it’d be a little more convincing, but it’s still a hell of a lot of money.