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Online coupons should be tightly controlled, says marketing body


Retailers should ensure that digital money-off coupons are unique and linked to individual customers to avoid the losses that mass duplication of the vouchers could bring, the sales promotion industry body has said.

Advert: free OUT-LAW Breakfast Seminars - 1. Making your contract work: pitfalls and best practices; 2. Transferring data: the information security issuesThough coupons have been a feature of sales promotion for years, it is only recently that coupons have been delivered digitally, in email or on websites. While it is hard for a customer to duplicate a coupon from a magazine or promotional leaflet it is far easier to make many copies of a digital coupon.

The Institute of Sales Promotion (ISP) has said that the number of online coupons being used by retailers has rocketed.

"In 2007, there was an unmistakable shift towards Internet coupons by marketers with an increase of 650% in Internet Coupons printed," it said in a set of guidelines it has published for marketers on electronic coupons.

The ISP said that the while consumers welcomed digital coupons, they presented dangers to retailers.

"The opportunity exists to make multiple copies of Internet print-at-home coupons by photocopying, scanning, or reprinting the original coupon," it said. "The primary impact of coupon copying is the potential for unbudgeted redemption liability."

"Through email, online forums and online auction sites, all coupons have the potential to reach a wider base than originally planned," it said. "As a result, coupons other than those intended by the marketer could be introduced into the marketplace."

Companies that use digital coupons should make sure that they keep control of the offers and of how many people can take advantage of them, the ISP said.

"Each coupon printed should be marked with a unique barcode and an identifier that ties to the data in a marketer's database," said the guidance. "These unique barcodes and identifiers should enable each coupon to be tracked and linked to a specific consumer or computer."

Some retailers have found that coupons can spread very quickly via email. The Thresher chain of off-licences emailed a coupon to some suppliers and business partners in November 2006 offering 40% off wine and champagne.

The coupon did not specify who could benefit from it, though, and it became an email sensation, being sent around the country to people who were not barred by its terms and conditions from using it.

The ISP said that marketers should make sure that technical and legal measures are used to limit coupons to the intended audience alone.

It said that the legal wording should make any restrictions, such as a bar on transferring the coupon, clear. It also said that technical measures should be used to prevent copying of the coupon and even to prevent multiple printing.

Some of these measures could only be taken in relation to coupons made using special software, which it recommends doing.

"A good coupon print application will allow marketers to maintain control over the coupon printing process and print quality," it said. "It will also prevent the coupon from being stored as a file on a consumer's hard drive, making it extremely difficult to manipulate in a graphics application."

The ISP said that such technology could even detect when a consumer was sending the coupon to a 'file based' printer or fax application, either of which could duplicate the coupon or distribute it.

"[The guidelines] will help marketers and their agencies to better understand the challenges of this new medium and navigate quickly through the process to create successful internet coupon programmes," said ISP chief executive Annie Swift.

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