a guide to internet coupons

8/6/2019 A Guide to Internet Coupons

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A Guide to

Internet Coupons

Phase One

Association of Coupon Professionalswww.couponpros.org

Association ofCoupon Professionals

The ACP Guide to Internet Coupons . Phase One (May 2001)


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Table of Contents

Introduction

Industry Message

Overview

Benefits of Internet Coupons

Risks of Internet Coupons

Recommendations for Designing Internet Coupons

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Copyright 2001

by the Association of Coupon Professionals

1043 Charlene Lane

Schaumburg, IL 60193

Phone: 847-922-3782

Fax: 847-985-5670

Email: [email protected]

Website: http://www.couponpros.org

All rights reserved. This publication may not be reproduced, stored in any information retrieval system or

transmitted in whole or in part by any means--electronic, mechanical, photocopy, recording or otherwise--

without the express written permission of the Association of Coupon Professionals. Contact the ACP for

permission to reprint material in this report.


Table of Contents


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Industry Message

Coupon industry representatives, who have various opinions on the subject of print-at-home Internet

coupons, collaborated to develop these voluntary guidelines. The Task Force consisted of

representatives from the following companies:

Allrecipes

BrightStreet

Campbell Soup Company

Carolina Coupon Clearing

CMS

CoolSavings.com

Efficient Marketing Solutions

General Mills, Inc.

Giant Food, Inc.

Hershey Foods

Kellogg Company

Lees Marketing Services, Inc.

Lets Go Shopping, Inc.

NCH

Pinpoint Data, Inc.

Promotion Eyes, Inc.

Ralston Purina Company

Santella & Associates

Save.com

Schering-Plough

Seven Oaks International, Inc.

Target Stores

The Quaker Oats Company

Valassis

The Task Force agreed that marketers should evaluate print-at-home coupons on the basis of net value,

defined as economic benefits versus potential risks. Further, the Task Force agreed that net value could

vary depending on marketing objectives, coupon values, range of distribution and other factors of a

program. Included in this analysis of net value should be an assessment of the advantages and

disadvantages of restricting print-at-home coupons to color only versus using black & white coupons.

Finally, the Task Force avoided judging the level of risk associated with Internet coupons, leaving that

analysis to the marketer. Using the information provided in this document, each marketer should

evaluate the risks of implementing an Internet coupon program.

The Internet Coupon Task Force will continue to monitor Internet coupons and will inform marketers of

changes in factors affecting the net value of print-at-home coupons.


Industry Message


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Overview

OverviewNot long ago the web was merely a concept and the thought of distributing coupons online was

just a seed of an idea. However, marketers quickly caught on to the Internet as an easy,

effective marketing tool and Internet coupons have taken root. Today, according to a study by

NPD Online Research, nearly one-third of Internet consumers use coupons distributed via the

web. These consumers indicate that their use of Internet coupons will increase. The question is

not whether online couponing will take hold, but rather how fast it will grow, how big it will

become and what new methods of coupon distribution will evolve. Even now, as the use of

Internet coupons grows, marketers are developing new methods of cyber discount distribution.

Internet coupons allow manufacturers one-to-one interaction with consumers. The Internetprovides research and information on the purchase behaviors of individual consumers. In

addition, the Internet gives marketers the opportunity to cost-effectively segment their databases

using multiple offers to test marketing strategies. As technology continues to make the Internet

faster and easier to use, less expensive, integrated promotions allowing marketers to

communicate directly with the consumer will evolve.

Technology is best when it provides solutions. With respect to marketing, particularly

couponing, the Internet provides a viable solution for manufacturers and retailers to reach

consumers who are looking for ways to save time and money. In addition, the Internet can be

used effectively to complement offline promotions. However, as with any new technology, there

is a learning curve associated with online coupon distribution. The information in thisdocument should help marketers navigate quickly through the process to create successful

Internet coupon programs.

The first phase of this project deals with print-at-home Internet coupons, defined as coupons

that are printed by consumers on a desktop printer from an Internet web site. The first phase

covers three topics:

l Benefits of Internet Coupons

l Risks of Internet Coupons

l Recommendations for Designing Internet Coupons


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As technology evolves, consumers continue to respond to value. Coupons provide value in the

form of price discounts. Print-at-home coupons add value by giving consumers an easy, convenient

way to save money on a variety of goods and services. The benefits of print-at-home coupons to

consumers include the additional value of providing consumers with an easy, convenient way to

save money on a wide variety of goods and services. The benefits of print-at-home coupons to

consumers also include:

Ease of UseConsumers click on the coupons they want and print them at home. The coupons can be

redeemed at any retailer that accepts coupons.

ConvenienceConsumers can search for print-at-home coupons when they want--any day of the week, any time

of the day.

RelevanceConsumers choose the coupons they want. Marketers can offer coupons and information targeted

to individual preferences.

PresentationConsumers see interactive, enjoyable and unique content.

Information-RichConsumers receive more targeted information.

Enhanced IncentivesConsumer interaction can result in additional rewards.

Benefits to MarketersThe Internet is an easy, cost-effective way to reach a mass audience that offers marketers the

potential to target individual consumers. This new medium provides marketers with:

Benefits to Consumers

One-to-One Marketing CapabilitiesPrint-at-home coupons can be tailored to individual consumer needs and marketers can learn more

about customer buying habits, creating unique one-to-one marketing opportunities.

An Upscale, Educated Audience

Online coupon users are a prime consumer group.


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Benefits to Marketers, continuedPotential New Coupon UsersThe Internet allows marketers to reach a unique audience some of who may not be traditional

coupon users.

Links to Company Web SitesOnline coupons can bring consumers back to marketers home pages where they can learn about

other products and services, receive helpful advice or obtain additional discounts, helping to create

strong brand identity and company loyalty.

Tracking and MeasurabilityMarketers can conduct tests in real time and measure the results on an individual promotion and/orconsumer level.

Relationship BuildingMarketers have the opportunity to build ongoing individual relationships with consumers.

Consumers voluntarily agree to provide information and, therefore, may be more receptive to the

marketers message.

Integration

Print-at-home coupons can be integrated with online programs and offline events.

FlexibilityThe Internet allows the continual reshaping of coupon promotions. Additionally, the speed andtargeting capabilities of the Internet allow marketers to run last minute promotions and react to

changing market conditions.

Benefits to RetailersRetailer response to online coupons is generally positive as print-at-home Internet coupons are

treated like traditional coupons--no investment of time or money is required for additional

equipment or new procedures. In addition, print-at-home coupons can provide incremental sales

and profits for retailers.

However, because of the potential for fraud, retailers are cautious about print-at-home coupons.

Still, some retailers are searching for ways to make Internet coupons part of their web-based

marketing strategies.




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Risks of Internet CouponsAs a relatively new medium, Internet print-at-home coupons present both new concerns for

coupon fraud and the need for new risk management controls. Likewise, print-at-home

coupons utilize many of the existing industry standards for controlling and administering

marketers coupon promotions.

Differences of opinion exist about the marketing strengths versus the risks of print-at-home

coupons. The purpose of this section is to offer the reader an understanding of the potential

issues regarding print-at-home Internet coupons. By weighing the benefits against the risks,

marketers can make their own decisions about Internet coupon promotions.

Consumer packaged goods companies are beginning to use Internet coupons as a method for

reaching consumers and meeting marketing objectives. Retailers are beginning to issue and

accept Internet coupons. The Internet has become a viable coupon distribution method, with

print-at-home coupons being one of several options.

There are three categories of risk associated with Internet print-at-home coupons:

l Copying of Internet Coupons

l Manipulation of Internet Coupons

l Print Quality of Internet Coupons

Categories of Risk




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CopyingIndividuals can make multiple copies of Internet print-at-home coupons by photocopying or

scanning and reprinting the original coupon. Replicating an original coupon is not unique to

print-at-home coupons, but affects other types of coupons, as well. Consumers can also print

multiple copies if the Internet coupon supplier does not have the technology in place to keep

consumers from printing several copies.

Consumers usually have good intentions when duplicating coupons and will use the replicated

coupons to purchase additional products, resulting in increased sales for both the manufacturer

and the retailer. Depending on the circumstances, this may or may not be acceptable to a

marketer.

The primary impact of the increased distribution resulting from coupon replication is the

potential for unbudgeted redemption liability. In addition, replicated coupons may not have the

same design quality as the original offer. Replicated coupons may not move efficiently through

the redemption process resulting in a slow-down at the point-of-sale, reduced checker

productivity and hard-to-handle issues that add costs to the clearing process. Again, this

problem is not unique to print-at-home coupons, but also affects other forms of coupons.

Industry Initiatives to Manage Copying Risk

Unique Barcode SerializationAn important security measure for print-at-home coupons is encrypted, serialized barcodes that tie

to data in a marketers database. Each coupon that is printed can be serialized, making it

individually unique for tracking purposes and linking it to a specific consumer. Fraud can be

detected through the reconciliation of supplier clearinghouse data feeds to the marketers print-

activity database. If a duplicate coupon is detected, it can be flagged. As supplemental data is

required for this type of analysis, marketers should contact both the Internet vendor and their

redemption agent to understand the additional costs for this level of data and control. Note that

detection of replicated coupons occurs after retail redemption.

Control Coupon DisplaySuppliers can deter the duplication of offers by not displaying an image of the actual coupon on the

home computer monitor. The final coupon should be a product of the print function. Additional

time and knowledge are required for consumers to alter a coupon that is not available online,

acting as a deterrent to fraud.




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Industry Initiatives to Manage Copying Risks, continued

Offer CappingMarketers can set predetermined limits on total coupon distribution. For example, a specific

coupon offer can be limited to a total of 500 prints or an individual household can be limited to a

certain number of prints. After preset limits are exceeded, households will not be able to view the

offer again.

Color-Printer DetectionPrinting applications can detect whether or not a consumer is using a color printer. Marketers who

want coupons printed in color can force consumers to print in color. Color copying can become

cost prohibitive to those trying to commit fraud.

Printing ApplicationSoftware can control printer diagnostics including page orientation, color capabilities and printing

limits. This technology allows marketers and suppliers to maintain control over the printing process.




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ManipulationWith todays technology, coupon face values, expiration dates, barcodes and other factors can

be altered. If the technology used by an Internet coupon supplier does not have appropriate

controls in place, an online coupon can be manipulated. Coupons can also be scanned and

specific components modified. This ability offers individuals the opportunity to create new

coupons.

Through e-mail, web-based bulletin boards and trading clubs, all coupons have the potential to

reach a wider base than originally planned. As a result, coupons other than those intended by

the marketer could be introduced into the marketplace, jeopardizing the integrity of the original

offer. Unexpected distribution and/or changes in design could cause:

l Increases in promotion liability.

l Inconsistent or incorrect product messaging.

l Deductions resulting from discrepancies between retailers expected coupon

receivables and a manufacturers authorized reimbursement.

l Decline in productivity at point-of-sale.

l Higher cost of clearing due to hard-to-handle issues.

l Unintended reach with fraudulent coupons going to unintended recipients.

Industry Initiatives to Manage Manipulation Risk

Printing ApplicationBy requiring consumers to download an application that allows them to print coupons, marketers

can implement security measures. For example, one print application encrypts data between the

marketers server and the consumers computer, making it virtually impossible to intercept the

relayed coupon information. The printing application prevents coupon data from being written to

the hard drive and displayed on the computer screen, making data and images difficult to capture.

Registry Identifiers

Coupon providers can place a unique identifier which is difficult to delete on a consumers harddrive or registry. If the coupon or data is returned to the supplier for additional analysis, the

supplier can reconcile these identifiers to their consumer database to detect fraudulent redemption.




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Print Quality

The print quality of an Internet print-at-home coupon can be compromised by the type of printer

used by the consumer. As a result, Internet print-at-home coupons may not scan correctly at

any or all points in the redemption process, including point-of-sale, retailer clearinghouse or

manufacturer clearinghouse, and may result in consumer ill-will, slow-downs at checkout and

hard-to-handle issues that add costs to the clearing process.

Industry Initiatives to Manage Print Quality Risk

Control Print Quality

A downloaded printing application is a tool that ensures that print quality standards are met. Theapplication controls all printer diagnostics, including page orientation, color and printing limits. It

disables the consumers print dialogue box during coupon printing, giving the marketer control over

printing for the specific session. The plug-in also allows for high resolution printing of coupons

using vector text and lines for greater fraud deterrence.

Studies conducted by Internet coupon suppliers indicate that most home printers are of high quality

and can be purchased relatively inexpensively. These studies also indicate that even the lowest

resolution printers will produce barcodes with a high degree of scannability. Also, the use of color

printers at home can improve print quality and minimize the risks associated with printing black and

white coupons.

Barcode Quality

The ability of suppliers to accurately control the print quality of the barcode is critical.




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Additional Industry Initiatives to Manage Risk

Recommended Design Standards Security MeasuresManufacturers and retailers can deter consumers and/or retailers from engaging in the fraudulent

duplication or manipulation of coupons by requiring Internet suppliers to adhere to the

recommended design standards outlined in this document. Using consistent design components for

Internet coupons will assist in discouraging misredemption activity, as abnormalities may attract

attention throughout the redemption process.

Redemption Data AnalysisWhen evaluating Internet print-at-home suppliers, manufacturers and retailers should gain a

complete understanding of the misredemption control analysis capabilities provided by thesevendors. The existing coupon EAN-128 barcode and Internet vendor-specific security codes provide

marketers with the ability to capture additional data components for analysis. If a coupon carries

specific consumer demographic information, the information can be obtained through the

manufacturers agent as part of the redemption process or the physical coupons can be forwarded

directly to the Internet print-at-home supplier for additional data capture. In either case, this

information can be utilized to determine if fraudulent activity has occurred at either the consumer or

retail level.

Currently, this type of fraud analysis takes place after the coupon has been redeemed by the

consumer and processed for payment by the manufacturer or their agent.

As supplemental data is required for this type of analysis, manufacturers should contact both the

Internet vendor and their redemption agent to understand the additional costs for this level of data

and control.

Redemption Agent ControlsManufacturers agents provide their clients with various services that help minimize exposure to

fraudulent coupon activity. Verifying submitters and matching the characteristics of the retail outlet

to those of their coupon shipments are the responsibilities of the coupon redemption agent and will

help uncover fraudulent activity at the retail level, regardless of the distribution vehicle used by the

manufacturer.

In addition, manufacturers agents review coupon shipments for evidence of physical misredemptionsuch as photocopied coupons. Due to the quality of photocopied coupons, they can be difficult to

identify.

Manufacturers should work with their agents, as well as third party organizations, to implement

misredemption controls.




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A Final Note on the Risks of Internet Coupons

Regardless of the distribution method chosen, the marketer is responsible for any liability associated

with the redemption of their coupons.

The stated risks and security measures, in combination with the benefits outlined in the previous

section, are intended to provide manufacturers and retailers with the foundation necessary to

evaluate Internet print-at-home coupons. Similarly, marketers may wish to evaluate the risks of

other coupon promotions and measure the benefits of meeting the promotional objectives of the

marketer.

Should a manufacturer, retailer, Internet vendor or agent identify or uncover fraudulent couponactivity of any type, they are encouraged to contact the following national organizations or the

corresponding local divisions:

Both agencies are available to assist in evaluating the level of potential fraud and potentialaction steps.

US Postal Inspection Service

National Headquarters

475 Lenfant Plaza, SW

Washington, D.C. 20260

(202) 268-2000

http://www.usps.gov/postalinspectors/

Coupon Information Center

115 South Street, Suite D

Alexandria, Virginia 22314

(703) 684-5307

http://www.cents-off.com




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Recommendations for Designing Internet Coupons

All Internet coupons should follow standard coupon design requirements and standards. The

following are recommended voluntary guidelines for developing an effective Internet coupon.

For more information, please refer to theJoint Industry Coupon Guidelines.

Purchase RequirementThe purchase requirement should be prominently shown and stated in simple, easy to read

language. Multiple purchase requirements should be clearly stated and shown next to the face

value. Avoid complicated offers, where possible.

Face ValueThe face value should be prominent. Face values should be based on the UCC approved value

code listing. The coupon should offer specific savings or, if it offers free products, the maximum

value should be stated. The use of free coupons should be limited. In a black and white

environment (like newspaper run-of-press, print-at-home, etc.), free coupons are discouraged due

to their high value and ease of copying. Free coupons are considered hard-to-handle.

Product Name and LogoThe product name should be placed in the center of the coupon and the product logo should be

included if space permits.

Manufacturer Internet Coupon TitleThe words Manufacturer Internet Coupon should be placed at the top center of the coupon in

bold type. To help checkers and agents (both retailer and manufacturer) clearly distinguish Internet

coupons from other black and white coupons, the Task Force recommends that this new title

Manufacturer Internet Coupon be used to clearly identify Internet coupons (as we do today for In-

Ads).

Internet Coupon LabelingThe words Internet Coupon, shaded in gray, should appear behind the legal wording of all

Internet coupons, thereby increasing the difficulty for consumers to manipulate the coupon and

giving the retailer a way to distinguish or identify the coupon as an Internet coupon rather than a

photocopied Free-Standing-Insert (FSI).

SizeThe coupon should be 6 x 2 1/2 (with a tolerance to 3 x 2 1/16). Larger coupons are

hard-to-handle and smaller ones are difficult to read. The coupon should include a dotted line to

indicate the need for cutting so the consumer does not give the checker the entire page of coupons

for redemption.


Designing Internet Coupons


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Designing Internet Coupons, continuedExpiration DateThe expiration date or the words No Expiration Date should be placed at the top center next to

the words Manufacturer Internet Coupon. Always include the month, day and year of expiration.

The use of No Expiration Date coupons should be limited.

Web Site Name and LogoThe name of the web site issuing the coupon and the site logo should be printed on the coupon

(preferably underneath the amount in the top right corner). An image is easier for someone

handling the coupon to identify and is also more difficult to replicate.

Picture of the ProductA picture of the product should always be displayed.

ColorThe coupon should be four-color and stand out from any advertising. Do not use distracting

background colors. Many Internet coupons will be printed in black and white, even if shown in

color on the web site. UCC scan guidelines for color should be adhered to as color impacts

scannabilty.

Terms of the OfferThe coupon offer should be clear, specific and visible, including the purchase requirements such as

quantity, size, etc. The legal terms for the offer should be simple and easy to read. They should

state the handling fee, the name of the manufacturer and the P.O. Box address where the coupon

should be sent for reimbursement. Consider including language such as coupon valid only for

items indicated, any other use constitutes fraud, may not be combined with any other offer and

duplicated or altered coupons will not be accepted.

UPC CodeThe Universal Product Code (UPC) should be placed in the lower right corner of the coupon. The

UPC must be in black on a white background, should be at 100% magnification and have sufficient

quiet zones on both sides of the barcode. Use the standard 12-digit UPC code which includes the

Number System Character 5; your Manufacturer Identification Number (MIN); Family Code;

Value Code and Check Digit. All coupons must conform to UCC Coupon Code guidelines

(Application Standard for UCC Coupon Codes).




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Designing Internet Coupons, continuedUCC/EAN-128 Extended Barcode

Always use the extended barcode which can be in one of 5 different formats and may include a 5

digit Offer Code; 4 digit Expiration Date; 8 digit Household ID; or a 2 digit Null Code, however,

the Null Code format is not recommended. Marketers should include either a consumer code or

household identification code on all Internet coupons utilizing the EAN-128 code or Internet

vendor-specific security codes. The offer code that is placed in the barcode should also appear in

printed form above the barcode in the event that the coupon is not scannable. Space allowing, the

household ID number should also be printed on the coupon.

Legal CopyCoupons are a contract between the issuer of the coupon and the retailer, as well as between the

issuer and the ultimate consumer. Therefore, the legal copy on the coupon is intended to protect

the issuer from fraud and misredemption. Use of the words, void if altered, copied, transferred,

purchased or sold is recommended. See the example below:

Direct MailCoupons selected from an Internet web site and mailed directly to the consumer should be printed

on copy-resistant paper if copying is not desired.

Fraud NotificationPlace prominent disclosure on the web site issuing coupons stating the consequences of altering a

coupon. Below is a sample notification:

Retailer: We will reimburse you the face value of this coupon plus $X.XXhandling provided it is redeemed by a consumer at the time of purchase onthe brand specified. Coupons not properly redeemed will be voided andheld. Alteration or reproduction of this coupon is expressly prohibited.(ANY OTHER USE CONSTITUTES FRAUD.)Mail to: ABC Company, 122Main Street, Anytown, USA 00000. Cash value $.XXX. Void where taxed or

restricted. LIMIT ONE COUPON PER ITEM PURCHASED.

It is illegal to alter, reproduce or manipulate these coupons in any way.Coupons not properly redeemed will be voided and held. Alteration or

reproduction of this coupon is expressly prohibited. (ANY OTHER USECONSTITUTES FRAUD.)Anyone who uses the Internet to commit fraud is subject to prosecutionunder the Federal Wire Statute. Unauthorized interceptions of Internetcommunications are prohibited by the Electronic Communication PrivacyAct.




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Designing Internet Coupons, continuedSample Coupons

Sample coupons are shown below:




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a guide to internet coupons

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