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Purchasing coupons: Don't ask, don't sell - Jill Cataldo

Last week, we discussed whether it is against the law to trade coupons (good news, it is not!) This week, a reader writes with a trickier question.

Q: "Is it a good idea to buy coupons on eBay? Is it even legal? Most coupons state 'Void if Sold.'"

A: The fine print on a coupon usually includes the warning, "Coupon may be void if copied, transferred, reproduced, sold or exchanged." While the prohibition of coupon transfer is a little fuzzy -- it's perfectly legal to share or trade them with friends, for example -- the rule about not selling them seems clear-cut.

"Sold" is sold, no matter how you look at it. Despite the coupon disclaimer, however, there are many places to buy coupons online. Coupon clipping services sell multiples of loose, clipped coupons and entire, unclipped inserts from the newspaper. Auction web sites, like eBay, offer coupons, for a price, every day.

How do people get away with selling coupons? Online coupon clipping services aren't low profile. Type "coupon clipping services" into any Internet search engine and you'll find plenty of places to buy coupons. Technically, however, you're not buying them. Disclaimers typically note that the site does not actually sell the coupons. Rather, the fees involved reflect payment for the time someone employed by the web site spends to clip and mail the coupons. So, clipping services charge for a service. Yes, this distinction is a loophole, but it's legal. The fees can range from a few cents per coupon to a $4.95 monthly subscription fee that covers 30 coupons of a shopper's choice. The sites may require a credit card number when a user first registers to be a member, or a member may pay later, after selecting the desired coupons.

In the case of eBay, the legal issues are trickier. Under eBay's terms for coupon auctions, sellers can't claim that the price of a coupon is based on the value of labor involved in clipping the coupon. The terms note, "Under eBay rules, the coupons themselves are the items being sold." The terms go on to state that while some coupons may not legally be sold, eBay does not monitor coupon auctions for these violations. Instead, it simply asks sellers not to auction coupons, if the coupons' terms prohibit it.

Since most coupons' terms prohibit resale, eBay is essentially turning a blind eye. However, manufacturers that issue coupons have not proved to be so accommodating. In 2003, the Food Marketing Institute and the Grocery Manufacturers of America wrote an open letter to eBay requesting that eBay take immediate steps to discontinue the sale or auction of grocery coupons. The letter also noted that the terms of coupons are being violated when they're sold and that coupon fraud abounds on eBay.

I agree with the FMI and GIA on this one. EBay restricts sales of many categories of products, but it has very few restrictions on coupon sales. I've never purchased coupons on eBay. While many coupon auctions look legitimate, on any day, it's easy to spot photocopied coupons or fraudulent coupons. If you do choose to purchase coupons on eBay, stick to coupons that are clearly clipped from the newspaper. Be suspicious of unusually high-value coupons or coupons for free products.

While it may seem counterintuitive to pay for coupons when they're available free in newspapers and online, I do understand why people enjoy purchasing them, especially multiples of identical coupons. Buying ten $1 coupons for 10 cents each nets a shopper $9, great savings even factoring in an auction fee or charge for clipping the coupons.

I find it's much easier to simply buy additional copies of the newspaper whenever there are coupons I'd like more of. Buying a couple of extra newspapers during a week when there are good coupons has always seemed easier to me than dealing with ordering coupons through the mail. And it's definitely legal.

Jill Cataldo, a coupon workshop instructor, writer and mother of three, never passes up a good deal. Learn more about couponing at her web site, www.supercouponing.com. E-mail your own couponing victories and questions to jill@ctwfeatures.com.