Two-year-old MTailor has garnered millions in sales for its custom-made shirts, all via its app.
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Not only does Coupons Inc. recommend against offering coupons for free product, it no longer will distribute such coupons online for manufacturers. “It introduces too much risk for our clients,” says CEO Steve Boal.
In response to fraudulent use, supermarket chains Albertson’s Inc. and Publix Supermarkets in September said they would curtail their acceptance of coupons printed from the Internet. Albertson’s rejects Internet coupons that offer free products rather than discounts while Publix rejects any kind of coupon printed from the Internet.
Other top recommendations for skirting fraudulent redemption include shortening both the coupon’s expiration date and the campaign. “Don’t print a coupon that represents a nice value off a product and make it valid for a year,” says Boal. “Make it valid for 14 to 30 days. Push the consumer into making a product purchase. It works for the manufacturers and for the consumers.” Boal also strongly recommends that retailers and other sponsors of coupons put some kind of identifying information, such as the consumer’s name, on the face of the coupon, similar to personalized coupons that come in the mail.
CoolSavings recommends the same. “We require advertisers to print a household name on the coupon. That way, the store cashier can check ID, which goes a long way toward preventing or discouraging reproduction and distribution of the coupons to households that weren’t intended to receive them,” Moog says. “If you can limit availability to a particular credit card number or household address, you have a better chance of limiting the application of that offer.”
That’s not to say fraudsters haven’t tried to alter that identifying information. Standard FSI coupons distributed in newspapers or via mail are printed on glossy paper and carry information on both sides; coupons printed from the Internet are one-sided, appear on printer paper and are therefore easier to reproduce and easier to get past store cashiers.
A technology solution
Coupons Inc. tackles that problem with technology that prevents an Internet coupon from being printed out on anything but a true home printer, reducing the likelihood the original data on the coupon will be tampered with. It attaches code to the coupons it distributes over the Internet 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. in August launched its Veri-Fi system, designed to help retailers identify counterfeit or altered coupons in the store. Store personnel can check coupons against criteria posted and accessible free at veri-fi.com by visiting the site and typing in a three-number code that appears on the face of the coupon. In addition to listing the physical features that constitute a real coupon, typing in the code also brings up information on the face value of the coupon being checked, the product, the summary information on the coupon’s face, the correct bar code and expiration date that should be on the coupon, and the time of day it was printed. Any differences between the printed coupon and the coupon as posted on veri-fi.com are readily apparent.
Some stores say such verification encumbers checkout, but Boal says the system isn’t meant to be used in-lane, but only where a problem is suspected. “In practical terms, the issue a retailer might have is when they start to see multiples of a coupon; or they might have questions about a coupon’s value,” he says. “Typically a retailer will not reject a customer at the point of sale, but a store manager can visit the site and determine whether or not there is an issue.”
Coupon providers are working on other security measures as well. CoolSavings, for example, plans to roll out initiatives this year, including functionality that will automatically offer online coupons only to consumers not already in the advertiser’s database. Scheduled for release later in the year is technology on the back end that verifies whether the coupon user qualifies for the offer and reverses discounts on purchases where that’s not the case.
Shorter lead times
Properly executed, online coupons have unique benefits to offer their sponsors, especially in flexibility. “The big divide is the lead time,” Boal says. “The lead time associated with delivering coupons in newspapers is quite long. You have to schedule dates well in advance and manage exclusivity of categories so you are not bumping up against a competitor in the same publication. Online, you can deliver a higher or lower offer depending on who you are trying to reach. You can manage your redemption budget and track performance in real time.” In addition, he notes, going online reaches the growing segment of the population that does not buy a newspaper.
For those reasons, sponsors’ concerns aside, providers such as CoolSavings and Coupons Inc. report no slowdown of their business as manufacturer participation and the level of redemptions continue to rise.
And as the popularity of this marketing strategy grows, they have advice for consumers as well. Faced with an increasing number of coupon purveyors, consumers must be sure they are dealing with coupon companies that will actually give them value. “Be careful not to land on a site that purports to deliver coupons, but collects too much information about you without giving you an adequate reward,” says Boal.