December 12, 2003, 12:00 AM

Moves that minimize the risk of Internet coupon fraud

In addition to technology that stops web coupons from being edited before printing, steps to minimize coupon fraud include skipping free product offers, including ID information, and shortening expiration dates, says Coupons Inc.


The recent flap over fraudulent store redemption of coupons for free Haagen Daz ice cream printed off the Internet, along with similar incidents, has thrown a spotlight on what retailers and manufacturers pursuing a couponing strategy online can do to minimize risk. While manufacturers and retailers find online distribution a speedy and effective way to encourage purchases among targeted groups of existing customers and prospect for new ones, problems can arise when coupons are reproduced and distributed beyond a campaign`s intended scope.

In response, some coupon distributors that work with coupon sponsors to combat fraud are developing extra security measures. One such measure that hinders fraud is technology that prevents an Internet coupon from being printed out on anything but a true home printer. Coupons Inc, a provider of consumer-printed coupon marketing and technology solutions for CPG manufacturers and others, attaches code to Internet-distributed coupons that detects and stops attempts to print coupons through other interfaces that could allow a coupon to be edited--for instance, by changing the expiration date--before printing.

Coupons Inc. also has developed a list of best practices for Internet coupon distribution that it recommends to the manufacturers and retailers with which it works on promotional campaigns. “We don’t recommend that campaigns include any printable coupons for free product,” says CEO Steve Boal. “And we strongly recommend putting some kind of identifying information, such as the consumer`s name, on the face of the coupon.”

Boal also recommends that marketers using promotional coupons shorten expiration dates for the coupon and campaign. “Don’t print a coupon that represents a nice value off a product and make it valid for a year,” says Boal. “Have it be valid for 14 to 30 days. Push the consumer into making a product purchase. It works for the manufacturers and for the consumers.”


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