Why Coupon Sellers’ Supplies Were Suddenly Cut Off

If you buy coupons online, did your favorite seller have a little less to offer this past week? If you sell coupons online, did your supplier come up a little short?

Many people who sell coupons online, get their inserts from “sources” all over the country. But several sellers reported that they were not able to get their regular supply of coupon inserts from the Los Angeles area last weekend, when Procter & Gamble’s brandSAVER was published. The sellers came up with various explanations and excuses for the shortfall. But the real explanation could be that the coupon publishers are catching onto what they’re doing – and working harder to stop them.

“California ended up not getting early PG inserts!” one Facebook coupon seller told followers last week. “Due to the Thanksgiving holiday, the warehouse will not have P&G this week. It is not available to any supplier or anything in Southern California,” an Instagram insert seller wrote. “PG has gone digital in Los Angeles,” a third seller concluded.

Gone digital? Nice try. Newspaper subscribers and newsstand shoppers had no trouble getting their P&G inserts in their papers last weekend. So why did so many resellers have such a hard time – and why from Los Angeles in particular?

“I work with many suppliers and have been in contact with every single one of them since Sunday as soon as I heard that there were no P&G,” one seller wrote on Instagram. “I just received my last confirmation from the last supplier confirming that there are no P&G in the warehouse.”

The insert providers won’t confirm, but neither will they deny, that it’s all because they planned it that way.

Coupon sales have become a big business in recent years, with the largest sellers offering thousands and even tens of thousands of inserts each week. Most no longer bother to pretend that they’re getting all of these coupons by buying tens of thousands of individual copies of the Sunday newspaper and pulling out the inserts themselves – especially since many sellers get their inserts days before the Sunday paper comes out, and many get them from out of state. Instead, the inserts come from “suppliers” who are walking out of warehouses with pallets of coupon inserts that are intended to be included in newspapers or home-delivered advertising supplements.

In short, the coupon industry points out, most of the bulk inserts that are offered for sale online are very likely stolen property.

So coupon publishers and local newspapers have been trying to stop this illicit flow of inserts from warehouses to sellers. A couple of years ago, more than a dozen newspapers across the country offered a reward for information about anyone obtaining “quantities of coupon inserts through unauthorized methods”. They tried removing inserts from some local newspapers and delivering them via mail instead. And police got involved in at least a couple of recent cases, when four people were arrested in connection with the theft of inserts from a South Carolina newspaper distribution facility, and a police officer was charged with helping himself to inserts from a Rhode Island newspaper distribution facility, and giving them to his wife to sell online.

But all of these efforts did little to stop the flow of coupon inserts into suppliers’ and sellers’ hands. So suspicion began turning to other potential problem areas – not local newspaper distribution centers, but separate facilities that bundle and prepare advertising supplements for home delivery. This past August, a former employee of just such a facility was arrested in Allentown, Pennsylvania. He’s accused of taking more than 100 bundles of ads and coupons that were meant to be included in a weekly ad supplement, and supplying them to a local coupon seller.

These ad supplements are typically the types that are tossed onto your driveway or stuffed into your mailbox. They’re a way for advertisers and coupon publishers to reach more consumers, particularly those who don’t already receive the ads and coupons by subscribing to their local newspaper.

One such supplement in the Los Angeles area is the “California Weekend Direct”. Its name often features prominently on the spine of many inserts offered by online coupon sellers (see the inset in the image above, from an insert seller based in Florida – quite a distance from California).

That particular seller is one of many that is not currently offering P&G brandSAVERs from the California Weekend Direct, or from anywhere in Los Angeles. Could it be, then, that those empty warehouses this past week belonged to the distributor of the California Weekend Direct? And if so – why?

Valassis, which distributes the P&G inserts, declined to “discuss specific clients or situations” in a statement to Coupons in the News. But it admitted putting into practice “a comprehensive security process to ensure appropriate levels of protection and security are provided throughout the distribution process. When warranted, Valassis, in cooperation with its partners and clients, will take appropriate action to address or eliminate identified sources of potential security breaches.”

“Appropriate action”, as in, declining to deliver brandSAVER inserts to a facility whose product is known to end up in the hands of online coupon sellers? Valassis wouldn’t say.

The head of CIPS Marketing Group, which distributes the California Weekend Direct, also declined to discuss his company’s relations with specific advertisers. But he acknowledged that coupon providers are becoming increasingly concerned about the illicit distribution of their inserts – and that preventing them from falling into the wrong hands isn’t always easy. “It always surprises me that there’s a black market for this,” CIPS President & CEO Manuel Collazo told Coupons in the News. “We’ve probably been involved in half a dozen conversations about coupon insert security. The coupon advertisers want more security all the time.”

So how secure were the inserts pictured in the inset above, that apparently came from his warehouse? “We’re constantly trying to upgrade security, but we’re working in a facility that wasn’t built yesterday,” he conceded.

The lack of available P&G inserts in Los Angeles certainly got many sellers’ attention this past week. But several of them simply turned to other sources in other parts of the country to obtain their inserts. So the problem is one that the industry won’t be able to solve by simply shutting off the supply from just one city.

But it’s a start. So the next time large-scale insert sellers report they’re having a hard time getting their illicitly-obtained coupons from a certain part of the country, it may be more by design than coincidence. And if it gets to the point that the sellers begin to rethink their line of work – well, perhaps that’s precisely the point.