Coupon Counterpoint: Secure online systems can combat home-printed fraud.
Marketers are quickly catching on to the Internet as an easy, cost-efficient way to reach the masses, and are busy “reinventing the wheel” – using the Internet as a slightly different method of distributing their products, services, and ideas. These reinventions are manifesting themselves in many different forms. One of these forms is the Internet coupon – a coupon distributed on the Internet, then printed out at home and used in retail stores.
As is almost always the case, along with new creations comes new fears. The Internet faces a great adversary when pitted against the fear in the minds of many users – the fear that conducting services online may not be secure. When Internet coupons first entered the arena, many questions and fears arose. Will people alter or illegally duplicate home-printed coupons? Ifpeople do use altered or duplicated coupons, will the retailer or consumer packa ged goods company be at a financial loss? Is it at all possible to prevent this type of fraud? Responsible marketing services and coupon companies anticipated these questions and already have the answers to conquer these security concerns.
Internet companies have proven themselves able to conquer security fears in the past and will no doubt do so again. For instance, millions of dollars are now spent on the Internet despite initial fears of using credit cards online. The U.S. Government has created a secure way to print stamps at home – and if secure stamps can be printed, so can secure coupons.
Valassis Communications, Inc. and its Save.com affiliate, working in conjunction with coupon clearinghouses, have put existing technology to use to make home-printed coupons secure for retailers and consumer packaged goods companies alike. Test results have already proven that this technology is an effective method to control the redemption of fraudulent coupons, and is at least as safe as the traditionally delivered coupons the industry has trusted for 30 years.
How are any coupons, whether traditional or home-printed Internet coupons, secure? When consumers use coupons at retail, the stores send the coupons to clearinghouses. These clearinghouses check both the coupons and the retail stores submitting them for validity. If fraud is suspected, the clearinghouses try to identify its starting point in order to prosecute the offender. According to clearinghouses NCH NuWorld Marketing Ltd. and CMS, the attempted industry misredemption rate is estimated to be between three percent and four percent – which means misredemption has been “virtually eliminated” from the coupon process.
“I believe that an Internet coupon is of no greater retail fraud risk than any other medium,” says Charlie Brown, vp-marketing at NCH. Brown says that home-printed Internet coupons pass through the same basic security checks as traditional coupons, with one key exception.
“An advantage that Internet-delivered coupons offer is identifying the source of fraudulent coupons by pinpointing the specific computer or user ID,” which makes it easier to take action against transgressors, says Brown. “Identifying the source of misredemption has been key to the secure environment that exists in the industry today.”
Save.com, which has been tested in parts of North Carolina and Texas for the past several months, uses a special two-dimensional bar code (the Aztec code) on each of its home-printed coupons. The bar code acts like a high-security fingerprint for each coupon printed. The computer from which fraudulent coupons are printed can be located using the bar code and the software can be disabled, cutting the source off from committing future fraud. No incidents of fraudulent redemptions or retailer handling problems were reported from either retailers or clearinghouses during the test. Save.com is planning a national launch mid-year.
The current Save.com system replicates traditional couponing, allowing consumers to interact with new technology while using a method that is familiar, convenient, and secure. Even as technology evolves, the one thing that remains constant is the fact that consumers love discounts.
Valassis continues to look for ways to bridge the gap between off-line and online marketing tools, and believes the next logical step is a “wired kitchen,” that will feature smart appliances with product scanners to help consumers create shopping lists. As more and more shopping is done online, the entire process will be linked together into one system offering convenience and savings. We also predict the broader use of personal wireless devices such as cellular phones and personal digital assistants to deliver personalized promotional offers. Eventually, the entire shopping experience will be changed by the use of these personal high-tech tools.
Technology is at its best when it provides “solutions.” As Internet coupon companies develop new technologies and use them in conjunction with secure methods already in use for traditional coupons, the needs of consumers, retailers, and consumer packaged goods companies will be securely met. And when technology gives us its next creation beyond the Internet, the world of coupons will be ready for it.
