Buyer Beware: Coupon Websites Can Be Victim Of A Scam

A couple of weeks ago, Ellen Roseman wrote an excellent blog about the “naïve” exploits of a Toronto butcher who “accidentally” sold 21,000 discount coupons over a few days across several different daily coupon sites.

Surprised by the sudden demand for their products, they could not handle the traffic, and the store swiftly closed down for renovations, and left many consumers fuming with their useless coupons.

It is likely the butchers pocketed as much as a million dollars from this gaffe. Here is an archived copy of Ellen’s original article.

Anyway, around that time a couple came to me desperate to find financing for their business – which happened to be a meat processing facility in Markham. They had to close down their operation several months ago, because tougher meat handling regulations handed down to them means they need over $100,000 in facility upgrades – money they do not have.

I went to visit their facility, and quickly realized there was no chance anymore for these people. Their personal credit and financial worthiness, coupled with a non-functioning business, meant no one would take a chance on investing in them.

I turned the conversation to liquidating their equipment and using the proceeds to make a lump sum proposal to their creditors. (They had already both used a sizeable amount of their personal credit to kick start the business.)

I did not hear from them for a week or so, until they showed up unannounced and asked me to look at Ellen’s article. This had inspired them. They have decided to create a retail store front at their facility, and sell fresh and frozen turkeys to the public – retail and wholesale.

They figure if they can get someone to lend them $125,000 now, they will pay back double within a few months.

They plan to emulate the Toronto butchers, and oversell half price turkeys like crazy, just in time for Thanksgiving and later Christmas.

Of course, this is NOT a viable business model – even they understand that. But they can do the math, and they figure by the time the sudden demand is unmanageable, they will have pocketed a few hundred thousand each. Then they plan to shut down, and take it easy for a year or two.

This is scary stuff – anyone buying online deals of the day should be very wary – I don’t know that this industry is regulated at all – but even if we assume all the online sites are legitimate, it is more than likely many of their clients are not. Buyer beware!

Related Articles:

• Hotmail Scam
• Scamming The EI System
• Trustee In Bankruptcy Catches Mortgage Fraud
• How To Avoid Mortgage Fraud