With new figures showing that the redemption of consumer coupons in the UK has almost doubled since 2009, PromoVeritas – the independent promotional compliance and verification service – is warning that brand owners and retailers face even greater financial risks if they don’t put in place much more robust processes to prevent fraud and malredemption.
Data released by leading coupon and voucher services provider Valassis has revealed that redemptions have increased by 96% over the past three years – with a rise of 14% (to nearly 225 million coupons redeemed) in the first of half of 2012 alone.
Jeremy Stern, managing director of PromoVeritas (www.promoveritas.com), says: “Discount coupons are becoming an increasingly important tool for driving consumer behaviour and spending in the current economic climate. But their success can come at a price. It has given rise to ‘professional shoppers’ who look to exploit coupon promotions by finding weaknesses in their administration, distribution or terms and conditions.
“In this respect, they are similar to the well-organised groups known as ‘scampers’ who ruthlessly exploit and manipulate promotional competitions.”
PromoVeritas has found that coupon exploitation can range from shoppers using self-service checkouts to scan the same coupon multiple times, to people involved in the production process offering stolen or over-run coupons for cash on websites.
“Some consumers simply malredeem coupons for brand X against brand Y instead,” says Stern. “Studies have found that as many as one in six promotional coupons are redeemed against the wrong product.”
Stern warns that the risks to brands and retailers are also increasing significantly due to the widespread use of websites and email to distribute coupons.
“Even the most sophisticated systems can suffer from malredemption, multiple printings and manipulation,” says Stern. “I know of one brand that issued £2 coupons to 3,000 people via email and were shocked when coupons worth over £100,000 were redeemed. They appointed PromoVeritas to investigate and we were able to trace the problem to two specific stores in Derbyshire. We succeeded in getting most of the £100,000 back from the leading supermarket chain involved.”
Stern urges brand marketers and retailers to take immediate action to minimise the growing threat from organised ‘professional shoppers’. Solutions suggested by PromoVeritas include:
- much tighter terms and conditions;
- more robust systems to improve security in the initial printing and distribution of coupons
- the implementation of unique barcodes on coupons;
- better liaison with retailers, and the inclusion of coupon codes into retailers’ EPOS systems to ensure redemption is only allowed when shoppers purchase the brand being promoted;
- a cap on the value of vouchers redeemed by individual customers;
- a more robust approach to investigating abuses, and tracing people who try to cheat the system.
About PromoVeritas
PromoVeritas provides promotional compliance and verification services for brands running online voting, prize competitions, prize draws and ‘golden ticket’ type instant wins and other forms of incentives in the UK and worldwide.
PromoVeritas advises brands and agencies and implements all elements of the administration of a campaign – from logistics and writing terms and conditions, through to printing scratchcards and unique codes. It also ensures that the process for selecting winners is secure and compliant with relevant legislation and codes of conduct.
Established in 2002 by Jeremy Stern, PromoVeritas has administered promotional campaigns worth over £40 million, including the recent Cadbury’s Unwrap Gold Olympic Ticket campaign, a £2.5m prize draw for a Bingo client, and thousands of other high profile campaigns.
The company’s clients include Unilever, Kraft, Pepsi-Cola, Cadbury, Pernod Ricard and Walkers Crisps.
In recent years, PromoVeritas has expanded into television and now provides verification services for shows such as ITV’s National TV Awards, and the BBC’s Strictly Come Dancing and the Eurovision Song Contest.
For more information please visit: www.promoveritas.com