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Dollar General has settled a lawsuit brought by a former employee who claimed the retailer was committing coupon fraud on a grand scale, by aiding and abetting its own customers’ coupon glitching.

Cory McNeley filed a federal lawsuit last year, claiming that Dollar General fired him after he blew the whistle on an $8 million coupon scam. He accused Dollar General staff and managers throughout the company of fraudulently submitting millions of dollars worth of coupons to manufacturers for reimbursement, that customers were improperly redeeming.

McNeley was employed as a Director of Store Operations in Dollar General’s Goodlettsville, Tennessee headquarters. Among his duties were managing data and investigating criminal wrongdoing within the company. In August 2014, he said he “became aware that Dollar General was submitting fraudulent coupons at an increasing rate.”

Dollar General associates “in hundreds of various locations” were accepting coupons incorrectly, he claimed. In many cases, his lawsuit alleged, staffers enabled so-called “glitching” by accepting high-value coupons for specific products, that the register would accept on lower-priced products for which the coupon was not intended. “For example,” the lawsuit explained, “a $10 product coupon can be applied to a $1 trial size of a similar product,” even if the terms printed on the coupon forbid it.

In other cases, McNeley said, “multiple coupons (were) redeemed in the same transaction in violation of redemption terms.” And in still other cases, cashiers or managers would allegedly override coupons that were not accepted, and allow them to be used on products that the store didn’t even carry.

And when he brought all of this to his own manager’s attention, McNeley said nothing was done.

By September 2014, McNeley said Dollar General was “submitting as much as or even more than $8 million worth of fraudulent coupons back to vendors and getting improperly reimbursed for these coupons.” His superior dismissed his concerns, though, because submitting coupons in this way was “in the company’s benefit,” McNeley claimed.

McNeley said he later brought up some other, non-coupon-related concerns. But by that time, he said, his bosses had had enough. In November 2014, the lawsuit states that Human Resources employees confronted him with allegations that he had submitted fraudulent expense reports, and had an inappropriate relationship with a co-worker, both of which he denied.

And then he was fired.

McNeley’s lawsuit sought reimbursement for lost wages, as well as “substantial” damages, claiming that the real reason for his dismissal was “his complaints of illegal conduct taken by Dollar General.”

But Dollar General denied it. “Customers are expected to use coupons according to the terms set forth on the coupon,” the company insisted in its response to McNeley’s lawsuit. Dollar General “denies engaging in or condoning any fraud in connection with its acceptance and handling of coupons,” the company said, maintaining that McNeley was terminated “for violation of company policy based on the belief he was involved in a romantic relationship with a subordinate employee under his direct supervision.”

The two sides settled their dispute out of court, and jointly agreed to dismiss the case this week. Terms of the settlement were not disclosed, and neither side responded to requests for comment. But McNeley did not retract his allegations, nor did Dollar General admit any wrongdoing.

So we may never know whether Dollar General was, or is, getting millions of dollars in extra cash by submitting coupons to manufacturers for products it never sold – and if so, whether staffers were doing so ignorantly, or maliciously.

But whether they’re held responsible, admit wrongdoing, or not, coupon glitchers will no doubt continue to see what they can get away with, when it comes to using coupons on products for which they’re not intended. And if another case like this one comes along, it may be a retailer that accepts their coupons, who ends up paying the price.

Image source: Dollar General

4 Comments

  1. Not and Extreme Couponer says:

    The coupon was intended to help the people who are less fortunately to afford the things that otherwise they wouldn’t be able to afford on their paycheck. But due to the show extreme couponing, it has brought out the worst in people. Some have become so greedy that they would clear out the shelves even if they don’t need the items because they have this idea that they can sell later at $1 or more per item profit. I personally think that there should be a limit per person. like maybe 4 coupon per transaction on the same items. If the coupon does not match with the item bought, no question ask, it shouldn’t be accepted.

  2. Janell sucks too says:

    Because of crybabies like these its now almost impossible to coupon at the dollar store. You crybabies were just mad you had to work for your paychecks.

  3. I work for dollar general and my last district manager MADE us take coupons if the scanned.it didn’t matter if the coupon stated it was for cat food. If it scanned for tooth paste he made us take it. As a matter of fact I gotten trouble for trying to follow the specifics of a coupon! They recently have stated that it has to match what the coupon says now

    • Concerned Employee says:

      This is all still happening. I work at a Dollar General and I have tried to stop the use of multiple coupons in a transaction in which the coupon itself said ONE per person. Yet the more I tried to stop thier use, the more I was told to stop. And the new Digital coupons are worse. We have several customers using multiple phone numbers over multiple transactions to get items for practically nothing. Yet if I try to stop people they simple call corporate and they give the customers gift cards for me causing problems. It’s all ridiculous.

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