The buying and selling of manufacturer’s coupons has become a hot topic lately, after eBay’s recent move to impose new restrictions on the practice (even though it appears those restrictions are not being vigorously enforced just yet). But eBay won’t say whether it made the decision on its own, or under duress. A couple of years ago, there was an uncorroborated report, since repeated as fact across the internet, that the major coupon insert publishers were either considering, or had filed, a lawsuit against eBay. There are no records of any such lawsuit ever having been filed during that time. But the notion that a coupon provider would threaten to sue anyone who facilitates the buying and selling of coupons – even legitimate, non-counterfeit ones – is not far-fetched. Because it’s just happened.
A legal threat from Coupons.com has led to the shutdown of a year-old website that allowed customers to place orders for printable coupons – from sites like Coupons.com.
The website houseofcouponZ.com launched in August 2012, as an alternative to the usual coupon clipping service. Instead of offering coupons clipped from the Sunday newspaper inserts, as many sites and eBay sellers do, this website offered to provide customers with extra sets of printable coupons. Users just had to submit the location of the website where their coupon was located, pay a 15-cent handling fee per coupon, and they could bypass their own computers’ two-print limit by getting houseofcouponZ to print some extras and drop them in the mail.
“We couldn’t find any other website offering the same service,” one of the site’s co-founders, who did not want to be named, told Coupons in the News. “We thought this would not be a big problem, since we were selling the service to print and clip the coupons, and a big company like eBay allows people to sell coupons.”
But it was a problem, to Coupons.com. houseofcouponZ abruptly shut down about two weeks ago, under pressure from the biggest player in the printable coupon business.
“We require that you immediately stop all illegal distribution and commercial use of our software and/or coupons and destroy all copies of our software and its documentation,” Coupons.com representatives ordered houseofcouponZ in an email. “If you do not, we will have no choice but to take legal action against you.”
And houseofcouponZ felt it had no choice but to comply. “If we had a million plus dollars behind us like some startups, I’m sure we would have kept it going,” the site’s co-founder said. “Unfortunately, houseofcouponZ.com will most likely stay down because even though we think we would win our case, fighting the case financially at this time is not an option.”
As compared to some of the more established coupon clipping and selling services out there, houseofcouponZ was relatively new. And it was no eBay. While the concept of the site might have evoked an image of a warehouse full of computers spitting out hundreds of coupons, in reality, the site’s owners used just six computers to supply their customers. At two prints per computer, that meant houseofcouponZ could provide a maximum of just 12 prints per coupon – hardly a big business.
That was still 12 too many for Coupons.com. Most of its printable coupons, and indeed most coupons in general, contain wording to the effect that they’re “void if copied, transferred, reproduced, sold or exchanged.” And even eBay’s own rules state that “you can’t claim that the price of the coupon is based on the value of the labor involved in clipping the coupons instead of the coupons themselves.” Which means charging a “handling fee” and throwing in the coupons for free, is just as frowned upon by coupon providers, as admitting to selling the actual coupons.
That hasn’t stopped many sellers from doing it anyway, and claiming ignorance or innocence, under the assumption that no one is really enforcing the rules, or that the rules don’t carry any weight. It’s not illegal, per se, to buy and sell legitimate, non-counterfeit coupons. Therefore, many buyers and sellers assume it’s okay, and that coupon providers write those rules about selling and exchanging just because they’d prefer that people not do it. But there’s still a risk. Copyright and intellectual property concerns can easily turn such a dispute into a civil case, that a deep-pocketed company like Coupons.com has a better chance of winning than a civilian running a little coupon-clipping business on the side.
Coupons.com’s move could serve as a warning, then, that coupon providers can use their muscle to enforce the rules when they want to. The move could even serve as something of a shot across the bow for other coupon clipping sites – if Coupons.com can order a site to stop selling its printable coupons, what’s to stop SmartSource or RedPlum from doing the same to those who are selling their insert coupons?
Printable coupon providers are also capable of disabling your computer’s ability to print their coupons, if they notice, say, photocopied coupons with a unique ID code linked to your computer’s IP or MAC address. Since Coupons.com hadn’t identified all six of the computers that the houseofcouponZ owners were using, it presumably figured a legal threat was another, easier, way of achieving its desired result. houseofcouponZ emphasized that all of the coupons it offered were unique, and not photocopied. But that didn’t matter to Coupons.com. About 75% of the coupons that its customers ordered were from Coupons.com, houseofcouponZ estimated, so it simply wasn’t viable to continue the site without the ability to print Coupons.com offers anymore.
As usual, Coupons.com’s media contact, whose job it is to handle media inquiries, did not respond to Coupons in the News‘ inquiry about this story. So, other than the wording printed on its coupons banning their sale or exchange, the company has not gone on the record about its position on the practice, or whether it intends to go after others who might sell or exchange its coupons. But in this case, Coupons.com’s actions speak louder than its (lack of) words.
So in a reversal of the old adage “buyer beware”, this time it appears to be “seller beware”. Sellers may be able to fly under the coupon providers’ radar and continue selling coupons undisturbed and undetected. But someday, perhaps, they too may find themselves on the receiving end of an email from some friendly lawyers – who would like to see to it that the sellers’ next customer, becomes their last.
I didn’t know that leaving a valid internet printable on the store shelf for someone else to use would be also be a problem. They’re just doing something nice for someone else, but you don’t know that that someone could use it to produce photocopies.