At the recent Society of Consumer Affairs Professional (SOCAP) National Conference in Scottsdale, AZ, leaders from major US Consumer Package Goods companies’ consumer affairs and operations teams attended a bonus session to discuss the rampant coupon fraud apparent in their category and hear from a series of expert presenters and panelists about some measures they are deploying to reduce risk.
Expert presenters included Bud Miller of the Coupon Information Corporation (CIC) and Sgt. David Lake from the Phoenix Police Department who was the lead investigator in the 2012 $40 million counterfeit coupon crime bust. The expert panel consisted of Senior Account Manager Rebecca Levitz from Arrowhead Promotion and Fulfillment Co., Consumer Affairs Manager Cindy Fritton from ConAgra Foods and Sr. Systems Application Supervisor Adina Raven-Everett from Unilever.
CPG Consumer Affairs teams manage consumer inquiries about their company’s products and commonly issue coupons as a form of appeasement. Various companies have added extra measures to ensure that the coupons that they issue to individuals are not duplicated and distributed by fraudulent means. Following is a short list of smart tactics that were recommended at the conference.
What can you do to reduce coupon fraud?
1. Print coupons on demand, imbedding a household identifier in the barcode and print the last name of the consumer atop the barcode. Fraudulent activity may be tracked to individuals. Monitoring and acquiring coupons being sold on eBay or other illegal coupon sale sites, and over-redemption reports from your coupon clearing company (stating which coupon code, with household identifier, was presented more than once) allow the suppression of specific users from receiving further coupons.
2. Eliminate the use of FREE and high value coupons. The higher the value of the coupon, the greater the risk for fraud. Modify coupon issuance strategy to use lower valued cents off and dollars off coupons and reduce the risk of fraudulent reproduction proportionately.
3. All coupon stock contains the CIC hologram seal (now with more and smaller holographic images to further prevent duplication) – and a prominent message line: “RETAILER: Do not redeem without hologram. CONSUMER: Reproduction, alteration, transfer or sale of this coupon or its contents is prohibited and is a criminal offense.”
4. Validate all mailing addresses collected against the US Mailing system list of valid addresses to eliminate fraudulent repeaters – persons who provide variations in their mailing address that unsophisticated data entry systems do not recognize as duplicates.
These 4 strategies may not eliminate fraudulent activity completely. Sharing best practices for reducing fraud spreads the word and helps to educate our partners in the industry and assist them in adding protection to reduce counterfeit and unscrupulous activity.