Digital Coupon Guidelines
Transcript of Digital Coupon Guidelines
DIGITAL COUPON GUIDELINES
6/17/2011 v.2 June 2011
The ACP Digital Coupon Task Force created these guidelines to:
Encourage consumer use of digital coupons
Encourage rich communication between industry partners
utilizing digital coupons
Encourage the development of digital promotions and
technologies
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C O N T E N T S
1. ABOUT THE GUIDELINES ..................................................................................................................... 3
2. THE DIGITAL MEDIA OPPORTUNITY ................................................................................................... 3
3. DIGITAL COUPONS DEFINED .............................................................................................................. 4
3.1. Digital Coupon Definition ....................................................................................................................................... 4
3.2. The Digital Coupon Process .................................................................................................................................... 4
3.3. Terms Used in the Guidelines ................................................................................................................................. 4
4. DIGITAL COUPON ECOSYSTEM PARTICIPANTS, ROLES AND RESPONSIBILITIES ............................... 6
4.1. Overview ................................................................................................................................................................... 6
4.2. Digital Coupon Publisher (DCP) ............................................................................................................................. 6
4.3. Brands ........................................................................................................................................................................ 7
4.4. Retail Participant (or other redemption invoicing entity) ................................................................................. 7
5. DIGITAL COUPON SET-UP AND COMMUNICATION ........................................................................... 8
5.1. Communications Process .......................................................................................................................................... 8
6. DIGITAL COUPON DISCOVERY AND ACQUISITION ........................................................................... 9
6.1. Discovery ................................................................................................................................................................... 9
6.3. Acquisition ............................................................................................................................................................... 10
7. DIGITAL COUPON PRESENTMENT .................................................................................................... 11
7.1. Definition ................................................................................................................................................................. 11
8. DIGITAL COUPON VALIDATION AND REDEMPTION ........................................................................ 11
8.1. Definition ................................................................................................................................................................. 11
8.2. Types ....................................................................................................................................................................... 11
8.3. Validation Challenges: ......................................................................................................................................... 12
8.4. Deletion and Disablement ................................................................................................................................... 13
9. DIGITAL COUPON RECONCILIATION................................................................................................ 14
9.1. Definition ................................................................................................................................................................. 14
9.2. Format and Need.................................................................................................................................................. 14
9.3. Tasks ........................................................................................................................................................................ 14
10. DIGITAL DATA CONTROLS ............................................................................................................... 15
10.1. Retailer Controls – Claimed Total Comparison ............................................................................................... 15
10.2. Digital Publisher Controls – Verification of Redemption Controls ............................................................... 15
10.3. Invoicing Agent/Retail Clearinghouse Controls ............................................................................................... 16
10.4. Manufacturer Agent Controls.............................................................................................................................. 17
11. AUDIT ................................................................................................................................................ 17
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12. OTHER CONSIDERATIONS ................................................................................................................ 18
12.1. Fraud Controls ....................................................................................................................................................... 18
12.2. Training of Store Personnel ................................................................................................................................. 18
12.3. Transaction Time .................................................................................................................................................... 18
12.4. Number of Offers ................................................................................................................................................. 18
12.5. Self-contained Digital Coupon Standards ....................................................................................................... 18
13. CONCLUSION .................................................................................................................................... 19
14. ACP DIGITAL COUPON TASK FORCE PARTICIPANTS ...................................................................... 20
15. RESOURCES ....................................................................................................................................... 21
16. APPENDIX ......................................................................................................................................... 22
16.1. Continuing Task Force Work ............................................................................................................................... 22
16.2. Recommended Data Fields .................................................................................................................................. 22
16.3. Digital Coupon Technologies Overview ............................................................................................................ 22
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1. ABOUT THE GUIDELINES
While these guidelines conceivably create a framework for electronically clearing coupons presented at
the point of sale in paper form, this document is focused on enabling promotions for which there is no
existing industry-standard clearing process. As such, this document does not address the unique issues
associated with electronically clearing the 3.3 billion coupons currently presented each year in a paper
form. Instead, it specifically deals with promotions for which the current coupon clearing process‘ requisite
paper trail is not possible. Therefore, any program that can produce an industry-standard paper coupon
to be sent through the acceptable paper coupon processes is not addressed by these guidelines and
should be considered a ―paper coupon,‖ not a digital coupon, and covered by existing ACP guidelines
available in other documents.
It is important to note that this discussion does not refer to ―Internet Coupons,‖ which the ACP defines as
coupons that require a printed version to be redeemed at the point of sale.
2. THE DIGITAL MEDIA OPPORTUNITY
We live in a digital world where usage of digital devices and media continues to increase. In the United
States more than 302 million people use mobile phones1, 240 million people use the Internet2, and millions
more use other digital devices such as cameras and mp3 players, every day.
The digital medium allows ease of use, interaction, speed, and measurement not attainable through other
means. While digital media often reaches the same audience as traditional means, they also enable one
to reach an increasingly ‗digital-only‘ audience of 18 – 34 year olds.
As other information has gone digital so too have coupons.
1 CTIA-The Wireless Association, December 2010
2 IITU – Internet users as of June 2010
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3. DIGITAL COUPONS DEFINED
3.1. Digital Coupon Definition
A digital coupon is a coupon that traverses the full coupon process (set-up and communication, discovery,
presentation, validation, redemption) without the requirement to manifest itself as ―paper‖ or in other
hard-copy form. Digital coupons, by definition, can be stored and presented via numerous digital devices.
Examples include: mobile phone, electronic key fob, USB drive, magnetic card, RFID card, camera, mp3
player, etc. The transmission of digital coupons from one step to another may occur physically (e.g.
swiping of a card, hand entry of a visually presented coupon code), electronically (e.g. via wireless
communication (NFC, Bluetooth, Wi-Fi, etc.) Infrared/LED strobing, etc.), image scanning of a mobile
device, or a combination of these, as well as other implementations.
3.2. The Digital Coupon Process
The nature of a digital medium gives rise to extensive variability in how it may be used. The Taskforce
defined a general framework for digital coupons while allowing for flexibility in technological and
campaign implementation.
The stages involved in a digital coupon process are:
– Set-up and Communication
– Discovery and Acquisition
– Presentment
– Validation and Redemption
– Reconciliation
3.3. Terms Used in the Guidelines
Association of Coupon Professionals (ACP) - an industry wide trade organization whose membership
has interest in providing coupon incentives to drive brand growth.
Bar Code Strobing – Technology that utilizes an LED or Infrared light source to strobe or ―pulse‖ data into
a laser scanner at the point of sale.
Bluetooth® – A short range (less than 30 feet) wireless technology used to link devices (such as mobile
handsets and wireless headphones) and/or to transmit data.
Camera Phone Bar Code Scanning (CBS) – Mobile devices with cameras and proper
software/applications are being used to capture information from 1D and 2D bar codes, as well as
through picture recognition in order to launch an interaction on the handset.
Setup & Communication
Discovery & Acquisition
PresentmentValidation &
RedemptionReconciliation
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Click-to-Call – With some mobile handsets, and using the proper protocols, a phone number that is
displayed in a text message or on a mobile Web page can be selected by a button on the handset,
instantly dialing the number.
Common Short Code (CSC)/Short Codes – A five or six digit numeric code that can receive a text
message and generate an automated response back to a mobile handset. See SMS (below).
Coupon Code – The code assigned by the retailer to refer to a particular offer within their system. This
code is unique within the retailer and is what is used at the POS to identify the offer.
Digital Coupon Publisher (DCP) – A broad term for companies which offer advertisers the
opportunity/means to distribute promotional offers to consumers. In this context, the offers are digital
coupons.
Interactive Advertising Bureau (IAB) – An industry association working to evaluate and recommend
standards and practices, as well as field critical research on interactive advertising.
MMS – Multimedia Messaging Service, an evolution of SMS that can include pictures, video, audio and
graphics. Current U.S. wireless handset and carrier incompatibilities have hindered widespread use.
Mobile Marketing Association (MMA) – A global industry association concerned with issues pertaining to
marketing through mobile devices.
Near Field Communications (NFC) – An ultra-short range (less than 20cm) wireless technology used to
transmit data in near real-time. The ―handshake‖ overhead is much more streamlined than Bluetooth®,
allowing for fast (less than 1 second) transactions. NFC is also compatible with RFID. Companies
evaluating NFC should consider security challenges regarding this technology.
Offer Code – The code used by the manufacturer/brand to identify a particular promotion. Typically this
is the 6 digit code that would reside within the bar code on the paper coupon. This code is unique within
the manufacturer (unique by manufacturer ID), but may easily be duplicated by other manufacturer within
a retailer‘s environment.
Opt-in – Refers to a consumer specifically granting permission to be contacted by a marketer. See MMA
and IAB guidelines for more information.
Preloaded – Description for a method of executing digital coupons at Point of Sale (POS.) Digital coupons
are stored in a system that can be referenced directly by the POS prior to, or during, the validation
process. There may be various methods to accomplish this.
Promotion Marketing Association (PMA) – An industry association concerned with issues pertaining to
promotional and integrated marketing.
Self Contained –Description for a method of executing digital coupons at Point of Sale (POS.) With a
self-contained digital coupon, the data/code/information presented by the coupon itself contains the
information needed for validating its authenticity. Much like a paper coupon today, the coupon is
validated against the basket of goods purchased and the discount is applied
SMS – Short Message Service, also known as text messaging, typically restricted to 160 characters per
message. See Short Code (above).
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Wireless Application Protocol (WAP) – A set of standards used to govern how mobile handsets connect
to the Internet. A ―WAP page‖ has design characteristics suited for display on and transmission to small
mobile device screens much in the same way that a ―Web page‖ is governed by standards suited for PCs.
The same URL used for a PC website may also be used for a WAP site. Most web servers can be
configured to ―sniff‖ the requesting browser type and serve the appropriate experience. An example of
this can be found at http://www.hardees.com. The PC user is presented a rich user experience whereas
the mobile user is presented with a store finder.
4. DIGITAL COUPON ECOSYSTEM PARTICIPANTS, ROLES AND RESPONSIBILITIES
4.1. Overview
The concepts below are primarily communication, legal and set up tasks above and beyond all the
―normal‖ duties performed and expected of each of the participants.
4.2. Digital Coupon Publisher (DCP)
Establish process
– DCP to define and document a process for transaction settlement based on the ACP Guidelines.
– DCP to explain process to Offer Sponsor or Brand and Retailer participants.
Establish agreement
– DCP to establish agreement with Brands for promotion services to be provided.
– DCP to establish agreements with retailer participants for inclusion in the program.
– DCP to establish expectations for retailers on invoicing Brands.
Establish (in cooperation with Brands) unique offer codes for proper tracking of promotion results.
Ensure that Brands understand their responsibilities with digital promotions (see below) and complete their
tasks prior to distribution of promotions. As best practice, offers should not be distributed to consumers
within the Digital Coupon Publisher‘s system unless the Brands‘ tasks have been completed.
Communicate
– New Brands. DCP should notify the retailer four weeks in advance of new Brands added to the network to allow time for any set up work necessary within the systems.
– New Promotions. DCP should notify the retailer at least five business days in advance of new promotion distribution (new offer codes) to allow time for any set up and validation work necessary within the systems.
– New Retailers. DCP should notify Brands four weeks in advance of new retail participants added to the network to allow time for any set up work necessary within the systems.
Provide reporting. DCP to provide Brands and Retail participants with results/reporting/auditing as
agreed upon through the Digital Coupon Publisher‘s systems and possibly partners.
DCP should be prepared to present documentation of coupon management application systems controls.
Examples of such would be SOX, SAS70 Type II, third-party security assessments or other rigorous audit
documentation.
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4.3. Brands
Engagement. Brands considering digital promotions should carefully consider and understand the
options for settlement as presented by the Digital Coupon Publisher.
Using an Agent (sometimes called a Manufacturer Agent). In the traditional paper coupon process,
many brands use a Manufacturer Agent to manage the invoices and payments on their behalf. If a
Brand wants to use an Agent for settlement of digital promotions redemption, the Brand is responsible
for communicating to the Agent and to the DCP about how to interact with the Agent. The Agent has
unique responsibilities as noted below. If using an Agent, the following must be arranged between the
two parties:
– Necessary legal addendums/changes to authorize the processing of digital promotions through the Agent‘s system.
– Approved Digital Coupon Publisher/Retail Participant information.
– Offer Code Data. This information should be shared with their Agent within 5 business days of the distribution of any offer, including appropriate method of distribution for reporting and payment control.
– Pay Decisions. Establish the needed payment controls and tolerances, and approve the implementation.
Control, make, and account for payment. An Agent may be used for these tasks; the Brand is
responsible for ensuring that they are handled properly.
– Receive invoices and redemption data and apply all system controls and processes.
– Make payments to retail participants, based on established agreement and invoicing.
Agent responsibilities
– Education. Agents should educate the Brand on the necessary legal/administrative duties needed to accept digital promotion redemption from DCPs and/or retail participants.
– Implement system controls and procedures with the intent of meeting standards for Sarbanes-Oxley (SOX) reporting compliance.
– Offer Management. Upon notification by the DCP or retail participant and with authorization by the Brand, add or update offer information within the processing system, if offer not already established by brand. When authorization for set up cannot be given, the agent will notify the DCP.
4.4. Retail Participant (or other redemption invoicing entity)
With traditional paper coupons, the entity creating an invoice for redemption reimbursement is usually
the retailer or it‘s agent who accepted the coupon from the consumer. With digital promotions, some
technical implementation companies may undertake this task. The company that creates the invoice for
redemption and manages the receivable is essentially representing the Retail Participant and should
be responsible and held accountable for the following tasks. They should:
– Educate all parties within the relationship regarding invoicing policies and timetables.
– Ensure invoicing policies are communicated and enforced.
– Cooperate with Brands (or their Agents) to establish cross-reference accounts.
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– Ensure that the invoicing process can be audited, is sufficiently controlled and is scalable to meet industry standards.
In some situations Retail participants work directly with technology partner or establish a relationship
with Point of Sale technology partner to manage and enable digital coupon programs. In this situation
the technology partner or Point of Sale Integration Provider may represent the Retailer for tasks such
as offer approval. The company that manages and enables coupons on behalf of the Retailer is
responsible for receiving offers from DCP, confirming offer acceptance from Retailers and ensuring
controls around consumer acquisition process.
5. DIGITAL COUPON SET-UP AND COMMUNICATION
5.1. Communications Process
1. Brand contacts DCP for availability (dates, pricing, etc.)
2. DCP approves request
3. Brand sets up offer within its system (may include notification of Agent)
3a. Agent enters offer into system
4. Brand transmits offer details (offer code, expiration date, etc.) to DCP
4a. DCP enters offer data into their system
5. DCP publishes digital coupon data to Retailer or their Integration Provider/aggregator and the
Retailer‘s established Clearinghouse
6. Retailer or Integration Provider/aggregator confirms acceptance and provides its coupon code (may
include notification to the Retailer‘s Clearinghouse)
7. DCP confirms retailer acceptance to brand/manufacturer
8. DCP publishes digital coupons to consumers
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6. DIGITAL COUPON DISCOVERY AND ACQUISITION
6.1. Discovery
The Discovery phase of a digital coupon takes many forms, both physical and digital. ―Discovery‖ itself is
defined as the means by which a consumer finds or is presented with an opportunity to acquire a digital
coupon.
All coupons are designed to directly motivate consumer action, but placing that impetus in the digital
world creates an interactive dialog between the marketer and the consumer. Understanding this two-way
communication philosophy also means that uninvited, interruptive, ―spam‖ campaigns are not condoned by
the ACP. This philosophy is shared by the Mobile Marketing Association and other industry groups.
Detailed best practices regarding ―opt-in‖ requirements and appropriate digital communication conduct
can be found through the MMA3, PMA, and IAB organizations.
Discovery can occur through electronic distribution via website, email, mobile website, SMS text or MMS
multi-media messaging, Bluetooth® broadcast, mobile handset applications, or other purely electronic
means. However, discovery can also occur by utilizing traditional media forms while providing a digital
response. Examples bridging the physical and electronic worlds include short codes, camera phone bar
code scanning, and wireless technologies.
The following are discovery examples as experienced through different media:
– Internet. The Internet is a common method for discovering digital coupons. Digital coupons can be accessed on dedicated coupon websites as well as presented as a call to action in banner ads, search term results, and even as a link in an email. In most cases, the digital coupon can be pre-loaded onto a retailer ―savings card.‖ In others, it can be saved to a unique id, mobile device, mobile application or even sent to a phone as a text message.
– Mobile Applications. Software applications can reside on mobile handsets and may behave like a ―coupon wallet,‖ allowing consumers to search for, save, manage, and redeem digital coupons. This wallet can be populated with offers automatically utilizing wireless data networks and/or synchronized with websites that offer the same functionality.
– In-store/On-package. Short codes, 1D codes and 2D codes can be displayed on any in-store media offering near-POS access along with a call to action. These codes can also be presented on the packaging of products and samples. ―Texting‖ a response to the short code, or ―scanning‖ the 1D or 2D code with the camera, can generate an SMS/MMS reply or automated mobile/WAP browser navigation which can contain a coupon and/or instructions on how to access one. The SMS/MMS communication can have a coupon code embedded in it, a link to a WAP page, or an embedded phone number allowing a Click-to-Call. NFC and Bluetooth® may also be used in-store in similar fashion; however, caution is warranted, in the case of Bluetooth® any wireless communications, to not expose consumers to ―spam-like‖ messaging beamed to them without their consent or specific request.
– Outdoor/Print. Similar to In-Store/On-package Short codes and 2D codes can be displayed along with a call to action. An outdoor or print campaign can also include a WAP site URL that consumers can enter directly into their mobile browser to access the digital coupon offer. Bluetooth® and NFC may also be used in conjunction with Outdoor media to transmit offers directly to mobile handsets.
3 The ACP Digital Task Force has collaborated with the Mobile Marketing Association on past and recent guidelines. The
Mobile Marketing Association Mobile Coupon Guidelines 1.2, March 2011 is available at www.mmaglobal.com.
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– Events. Events provide a unique opportunity to connect consumers with a digital coupon call to action. Short codes are widely regarded as the best method for event-based call to action. 2D codes can also be used in this venue through large format displays.
– Broadcast. Short codes are the typical coupon discovery method for video and audio broadcasts. The consumer texts the keyword to the short code initiate distribution of the coupon. 2D codes are less common and limited to use within broadcast to video only.
– WAP Sites. As an extension of websites, WAP sites specifically defined for mobile consumption can also contain downloads and coupon codes for display or delivery directly to the device. These sites can be searchable, and may not even require the specific transmission of any graphic files or applications in order to ―deliver‖ a coupon to the user. A user may simply access the WAP page to view the coupon at the time of redemption.
6.2 Distribution Limits
Digital coupons provide the opportunity to either open or constrain distribution. Digital coupons can be made viral, enabling more than one consumer to share and spread the offer within the limits defined. Conversely, they can be restricted allowing just one person to receive and take advantage of the offer. Some offers may allow multiple uses by a single individual, others may limit to one use. A brand can often also limit the total cumulative acquisition opportunities. Advertisers considering digital coupons should understand their objectives and select a technology and DCP that can meet their needs.
6.3. Acquisition
Irrespective of how a digital coupon may have been discovered, it ultimately is acquired by the consumer
and stored digitally. Examples where it might be stored include: mobile phone, electronic key fob, USB
drive, magnetic card, RFID card, camera, mp3 player, etc. Furthermore, acquired digital coupons may
also be stored on a network and accessed later for presentment.
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7. DIGITAL COUPON PRESENTMENT
7.1. Definition
Presentment is the means by which a digital coupon is delivered to the point of sale for redemption by the
consumer. The presentment process includes some form of data entry of the digital offer into a point of
sale (POS) network. Presentment that includes surrendering a piece of paper is not considered a digital
promotion and falls under existing ACP guidelines for coupon redemption. See section 3.1 for a definition.
Examples of presentment methods include, but are not limited to the following*:
– Input of unique ID (such as loyalty card, credit card or phone number) triggers a ―pre-loaded‖ interaction (see Digital Coupon Validation and Redemption section for description of pre-loaded digital coupons).
– Visual reading of the mobile device screen by a merchant clerk and hand entry into the POS
– Scanning of a code, by a POS scanner, that is displayed on a mobile device screen
– ―Strobing‖ of the code via LED or infrared into a POS scanner/reader
8. TRANSMISSION OF INFORMATION VIA WIRELESS (E.G. BLUETOOTH®, NFC, ETC.) OR PHYSICAL CONNECTION (E.G. USB) DIGITAL COUPON VALIDATION AND REDEMPTION
8.1. Definition
Validation and redemption is the process of confirming that the digital coupon presented by the consumer
is legitimate and valid for the purchases made, thereby giving the consumer the promised discount and
recording the transactions.
8.2. Types
Types of validation and redemption and the information required by the POS will depend on which of
two scenarios are used by the merchant: Pre-loaded or Self-contained.
Pre-loaded digital coupons are stored in a system that can be referenced directly by the POS prior to, or
during, the validation process. There may be various methods to accomplish this.
One method may involve storing a discrete code in a database of valid digital coupon codes that can be accessed on demand for validation.
Another method may involve multiple coupon codes associated with a unique consumer/master ID (e.g. loyalty account). At presentment, the unique ID code presented by the consumer is matched against the database. Then, the basket of goods purchased is compared to the list of available pre-loaded coupons associated with the unique consumer ID. Where matches occur, coupons are validated and the consumer receives the discount.
– Standards. Due to the tight coordination required between retailers and Brands, this method of validation and redemption necessarily has an inherent, agreed-upon standard for validation.
Self-Contained. With a self-contained digital coupon, the data/code/information presented by the
coupon itself contains the information needed for validating its authenticity. Much like a paper coupon
today, the coupon is validated against the basket of goods purchased and the discount is applied. Use of
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self-contained validation and redemption process is more suited for closed looped retail promotions
where reconciliation step is not needed.
– Standards. In order to leverage existing POS system controls and validation methods, the data presented should include the GS1 Company Prefix and Family codes of the products required to be purchased in order to receive the discount. (The coupon industry has not yet developed comprehensive standards for self-contained digital coupons to ensure their validity and accountability within the Merchant‘s POS and accounting systems.)
– Risks.
No validation against an acceptable list of codes. It is plausible that the system could be abused by those able to ―fake‖ a valid digital coupon.
Settlement is completely reliant upon the code/information that‘s communicated between the digital device and the POS; unlike traditional paper coupons, there is no paper ―back-up‖ or paper audit trail. In today‘s POS environment there is often no complete record of transaction to enable settlement process.
8.3. Validation Challenges:
Stacking is the process of applying multiple coupons/discounts to an item purchased.
Arbitration is the process of determining which of multiple applicable coupons/discount to apply.
Stacking and arbitration go hand-in-hand. In some instances both processes come into play for the same
item purchase (i.e.: when the consumer has more coupons available in the transaction than the item‘s
purchase price. In this case, which coupons to stack.)
Both of these processes are controlled solely by the retailer and their systems and policies. Stacking may
include a number of discount sources, including TPRs (Temporary Price Reductions), in-store specials,
digital/electronic coupons, and/or paper coupons). Stacking processes may not be consistent across a
retailers stores or even match their published policies.
The various options include:
1. No stacking. Each item may participate in only one discount. However, be aware all stacking scenarios cannot be accounted for:
a. No electronic stacking, but paper may stack with electronic discounts. b. No paper stacking, but electronic may stack with paper. c. No stacking of manufacturer‘s coupons at all regardless of paper or digital. d. In-store and TPRs are exempt, and may stack with other discounts.
2. Stacking of coupons until the item‘s price is zero. Excess discount is lost. 3. Stacking until the item‘s price would go to zero. Item is never free. 4. Stacking allowed; full value of offer given to consumer, even if it exceeds purchase price.
Item 2 and 3 (above) also apply to single coupons (e.g.: item price is 48¢, and the coupon is for 50¢. In
option 2, the item is free, and 2¢ is lost to the consumer. What is actually cleared and invoiced may be 48
or 50 cents, depending on other issues. In option 3, the coupon is not applied since it would take the item
price to zero.
Additionally, all discount types mentioned above are pre-tax, with the exception of paper coupons.
Paper coupons are typically treated as tender and are post-tax. This means that a paper coupon does
not reduce the sales tax charged for an item, just the total paid for the order.
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Regardless of stacking, arbitration comes into play whenever there exist multiple discounts for a single
item in a transaction. For ease of discussion, let‘s assume a non-stacking environment, where only a single
discount shall ever apply to an item in a transaction. The options to choose which discount/coupon to apply
include:
1. Electronic always applies; paper will be declined and returned to consumer. Multiple electronic coupons may be chosen based on:
a. Expiration date. b. Clip date. c. Value d. ‗best deal‘ an algorithm using both value and expiration to try to give the consumer the ‗best
deal‘ e. Some arbitrary value within the retailers system (e.g.: coupon number!?!?!)
2. Paper always applies and any electronic discount that was applied will be removed automatically. The consumer has the paper in-hand, and may not even be aware of the electronic discount. If multiple
paper coupons, the subsequent coupons are not applied, and returned to the consumer.
8.4. Deletion and Disablement
While most paper coupons are surrendered and cannot be reused, digital coupons are transmitted at
presentment and have the ―benefit‖ of allowing multiple uses without redistribution, if so desired by the
brand sponsor. As such, digital coupons should have a mechanism by which they are deleted or disabled
once the individual redemption limit, as defined by the brand, is reached. Deletion and disablement will
ensure the coupon cannot be ―over-redeemed‖ and provides brands and merchants the security they need
to have confidence in the digital coupon process. At the same time, the advertiser may also choose to
constrain redistribution of the same offer to an individual such that the individual cannot re-acquire the
coupon and gain additional unintended uses.
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9. DIGITAL COUPON RECONCILIATION
9.1. Definition
Once the consumer has received a discount for a valid digital coupon, the retailer has a receivable.
Reconciliation is the financial settlement between the brand sponsoring the discount and the retailer who
has the receivable.
9.2. Format and Need
How reconciliation is handled may depend heavily on which organization is funding the event, how the
offer is negotiated between parties, and a desire for controls.
– Trade Funds. Coupon programs managed by an Account Specific Marketing group and funded by trade funds may require a less formal process.
– Consumer Funds. Coupon programs managed by consumer fund/brand groups may require a more formal process in order to allow brands to see, in consolidated fashion promotional results. This need may influence a desire for Manufacturer Agent controls and reporting.
– Sarbanes Oxley Compliance. Sarbanes Oxley requirements and internal controls may dictate certain settlement standards for some brands and retailers.
– No Reconciliation Needed. In some situations, financial reconciliation between two parties does NOT need to occur. Examples would include self-funded promotions – where a retailer is offering and funding the discounts, sometimes on their own products (e.g., a video store offering free rentals, retailer offering discount on store brand).
Due to the variety of relationship possibilities and reconciliation requirements, the ACP recommends
vendors, brands and retailers set expectations about reconciliation clearly and frankly during the process
of creating events.
Vendors should carefully consider their business plans and clearly communicate their preferred/supported
reconciliation model to brands and retailer participants. Approval/agreement should be reached before
programs begin.
9.3. Tasks
Reconciliation of digital coupon receivables can follow a variety of paths, but each path has some
constant expectations and necessary tasks. The following tasks need to be accomplished, but who does
each is ultimately up to retailers, brands and technology providers. All parties should carefully consider
business plans and clearly communicate the agreed upon reconciliation model. Also, agreement should be
reached before programs begin. Required reconciliation tasks include:
All Participants:
– Cost Control. Control and minimize the total end-to-end cost of the program
– Scalability and Ubiquity. If the digital coupon solution is intended for multiple merchants, the reconciliation process should be designed to scale to a large volume of digital coupons.
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Invoicing Participant:
– Produce invoice data consistent with industry standards, including: Promotion Owner Identification, Retail Identification, Remittance Address, Invoice Date, Offer Code, Offer Count, Face Value, Handling Fees (if applicable), Amount Due by Offer, Invoice Total, Terms.
– Enable invoicing to Manufacturer Agent as directed by Promotion Owner; communication and set up steps may be required. Invoicing Participants are strongly encouraged to utilize industry adopted EDI880 invoicing standards.
– Ensure accountability for all valid redemptions and a Promotion Owner‘s ability to audit.
– Create and enforce financial and system/application controls. For many this may include satisfying internal controls and SOX requirements.
Promotion Owner:
– Make payments in a timely manner or according to stated payment terms.
– Ensure complete reimbursement for legitimate coupon liability
– Provide exception reporting/reasons for amounts not paid.
– Create and enforce financial controls. For many this may include satisfying internal controls and SOX requirements.
10. DIGITAL DATA CONTROLS
Below is a discussion of some of the possible controls implemented at each touch point. We suggest
participants discuss process controls with all involved parties prior to engaging their services. Most vendors
are prepared to provide proof of controls upon request.
10.1. Retailer Controls – Claimed Total Comparison
Retailers who do not submit their own Redemption File can elect to submit their claimed totals to their
Clearinghouse for comparison to the claimed value submitted by the technology providers. Coupon
Claimed totals are pulled independently by the accounting department for POS store-level data and
used for booking receivables into accounting systems. Variances are reported to the Retailer and
technology providers. Additional controls may be in place and may vary by Retailer.
10.2. Digital Publisher Controls – Verification of Redemption
Controls
Digital Publishers can receive a file of all digital redemptions from each participating retailer on a routine
basis (daily, hourly, per transaction, etc.). The digital redemptions are compared to the downloaded
digital coupons. For each digital redemption record, the associated clip/save/download is searched for.
When the corresponding download is found, this constitutes a match.
The download is then marked as redeemed and can be used in some implementations to prevent further
redemption unless offer parameters allow multiple uses. Pre-loaded coupons are marked redeemed at
the retailer level, regardless of the DCP actions.
We suggest Manufacturers work closely with Digital Publishers to review redemption verification audit log
results and any associated research for offers performing outside of expectations.
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Excessive Redemption Controls
Many Digital Publishers enable the Manufacturer to have a greater control over dollar amount that will
be paid for each promotion. This ensures the promotion doesn‘t exceed the budgeted amount, most often
this is controlled by setting caps on the number of consumer acquisitions allowed. Manufacturers should
work closely with Digital Publishers to review reporting and capabilities.
10.3. Invoicing Agent/Retail Clearinghouse Controls
Outlined below are potential controls in place with the Retailer‘s Invoicing Agent or Clearinghouse.
Offer Master Controls
An Offer Master is maintained by the Invoicing Agent, from data input by the Digital Publisher. Invoices
will only be created if the offer being presented for redemption from the Retailer or technology provider
is found in the Offer Master.
Invoicing Controls
A Promotion File should be received from the Digital Publisher containing the following data elements in
advance of redemption:
– Manufacturer number
– Offer Code
– Face Value/Free Indicator/Max Value
– Expiration Date
The Invoicing Agent compares the Digital Publisher Offer Master Data to Offer Master Data presented
from the Manufacturer‘s Agent (ex: Inmar Promotion Services, NCH, and P&G). If there is a discrepancy
between the Digital Publisher‘s and Manufacturer‘s offer master data (i.e. Digital Publisher value stated
as $.50 while Agent file value equals $.75) then the Digital Publisher and Retailer are notified and value
is verified for invoicing.
When the Redemption File is received, the Invoicing Agent validates the following to the Offer Master,
invoicing cannot occur until discrepancies are resolved:
– Manufacturer Number
– Offer Code
– Face Value/Free Indicator/Max Value
If the Retailer or technology provider submits any of the following, an invoice will not be created, until the
error is resolved:
– Non-digital offer or offer is not in the Digital Publisher‘s Invoicing Agent Offer Master File
– Invalid Digital Submitter ID
– Offer with a value discrepancy to Digital Publisher Offer Master
Each Redemption File received should be reviewed to ensure it is not a duplicate file. If the file is a
duplicate, invoicing should not occur.
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10.4. Manufacturer Agent Controls
Manufacturer‘s Agents may offer some or all of the following controls:
– Payments for digital redemptions are not released without a proper manufacturer authorization
– Appropriate submitter level pay decisions must be in place before payment will be released. Payment for digital redemption is not released unless the digital offer code is in the Manufacturer‘s Agent database and the face value claimed matches the offer‘s face value in Agent database
– Digital redemptions will only be paid if the offer code claimed by the submitter has approved digital method code(s) in the Manufacturer‘s Agent database
– All Manufacturer‘s Agent standard Retailer Controls will also apply to Digital Submitters
11. AUDIT
It‘s important to perform digital audits in order to confirm sufficient controls over cash and cash-like assets.
These audits ensure adequate process controls between parties. The ACP Digital Coupon Taskforce recognizes
the need to provide direction to the industry on the methods and processes to audit the redemption and
settlement of digital coupons. We are actively working as a group to develop standards here.
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12. OTHER CONSIDERATIONS
12.1. Fraud Controls
As with any coupon method, the potential for fraud or misredemption will likely be a major concern for
digital coupons. As such, depending on the program needs or objectives, it is imperative that appropriate
controls be in place for managing unauthorized coupon distribution, access, duplication, alteration,
forwarding and usage. Brands considering digital coupons should understand their objectives and,
depending on their needs, select a technology and DCP that can provide applicable fraud controls.
12.2. In-Store Consumer Issues
Digital coupon validation should be an automated process at checkout. Retailers should train in-store
personnel on how to assist consumers if issues arise regarding digital coupons.
12.3. Transaction Time
Critical to the deployment of any presentment option is the length of time required at the retail POS to
complete the promotional transaction. To assist adoption, any new technology or method should require an
equal or lesser amount of time than existing methods.
12.4. Number of Offers
In certain cases, there might be a limit to the number of offers that can be available for use by a
consumer. These may be due to various restrictions, such as a retailer‘s POS limitations. Therefore, some
guidelines (or at least understanding and expectation) should be given around how consumers can access
and present digital coupons on a single visit.
12.5. Self-contained Digital Coupon Standards
While the pre-loaded format has been discussed in further detail in this document, the coupon industry has
not yet developed standards for self-contained digital coupons (i.e. coupons not pre-loaded) that support
third-party redemption and reconciliation processes. (See section 8.2.) Other industry groups may choose
to actively discourage a self-contained digital coupon due to fraud and lane performance concerns.
Solutions for this challenge may be developed in the future. The ACP Digital Coupon Taskforce will
continue to evaluate options and will update our guidelines once a clear direction has been set by the
industry. At this time, we do not recommend self-contained digital coupons when third-party reconciliation
is required.
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Conclusion
Digital Coupons represent a significant opportunity along with some challenges. The opportunity exists in
taking advantage of exciting new technologies and consumer expectations in simplifying their lives
through more targeted, relevant, and convenient marketing messages. The challenges are primarily
related to ensuring trust and accountability in a process that is completely paperless by definition.
The ACP Digital Coupon Task Force is committed to tackling these complex issues and helping to guide
marketers, retailers, and the promotions industry at large into the digital future.
The ACP believes that all industry participants would be well-advised to follow the Guidelines; the ACP
cannot and does not wish to suggest that they are required to do so. All industry participants, even ACP
members, should make their own independent decisions about how they will proceed in the marketplace.
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13. ACP DIGITAL COUPON TASK FORCE PARTICIPANTS
Tara Trocki AOL Shortcuts
Bud Schneider Arrowhead Promotion & Fulfillment
Brenda Yeuh Atlantic Coupon Service
John Doyle Benetel
Maria Flaherty Campbell Soup Company
Joe Henson Catalina Marketing
Ron Hilmes Cellfire
Jane Michels Coupons, Inc
John Bigler Cunningham Electronics Corp
Jackie Broberg General Mills
Melissa Telli i2c Inc.
Amir Wain i2c Inc.
Hung Tran Infinian
Bill Catania Inmar
Susan Jones Inmar
Debbie Settle Inmar
Matthew Tilley Inmar
Jon Robertson Intelligent Clearing Network
Len Harris Kellogg Company
Cheryl Riley Kellogg's
Patrick J. Lewis KickBack Rewards Systems
Pradeep Mandlik Mandlik & Rhodes Info. Systems
Joe Machado News America Marketing
Ross Ely ProLogic Redemption Solutions
Lisa Irwin Promotion Eyes
Jodi Claeys Promotion Fulfillment Center (PFC)
Ron Fischer Redemption Processing Representatives, Inc
Jonathan Treiber Revtrax
Vijay Chetty ScanAps
John Gorowsky Symbology
Ted Schultze Symbology
Karen Cervenka VISA
Hariramani, Prakash VISA
Ryan Dranginis VisibleBrands
Cheryl Black You Technology
Earl Ellsworth Universal Marketing Services
John Tikwart Zave Networks
Jackie Kempf Zave Networks
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14. RESOURCES Association of Coupon Professionals
http://www.couponpros.org
Mobile Marketing Association - MMA
http://www.mmaglobal.com/
Promotion Marketing Association - PMA
http://www.pmalink.org/
Interactive Advertising Bureau - IAB
http://www.iab.net/
GS1 Mobilcom
http://www.gs1.org/mobile
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15. APPENDIX
15.1. Continuing Task Force Work
– Retailer input to digital coupon guidelines.
– Coordination with other industry initiatives.
– Complete recommendations on Digital Coupon Audit procedures and best practice.
15.2. Recommended Data Fields
– Expiration Date – when the offer is no longer accepted at point of sale.
– Face Value – The value of the offer. Amounts are displayed without ―$‖ or ¢ signs. Example: $1 appears as 1.00 while 25¢ appears as .25. (Blank for BXGO offers).
– Free Indicator – is the item free (face would then be variable).
– Max Free Value – the maximum value allowed.
– Manufacturer Number – this is a number assigned by the clearing house system – it helps the clearing house identify the owner of the Brand.
– Manufacturer Offer Code – Offer or OCR code used to reference the offer.
– Minimum Purchase Requirement – Number of products or items a consumer must buy to conform to offer requirements. Example: If purchasing two items to qualify for the discount, the Minimum Purchase Requirement is 2.
– Offer Description – Example: ―Save $1 when purchasing 2 boxes of Acme® Crackers.‖ Or ―Get 1 free when purchasing 2 boxes of Acme® Crackers.‖
– Offer Details/Legal – Example: ―No other coupon may be used with this coupon. Consumer pays any sales tax due.‖
– Offer Title – The text format is ―Product, Save $X.‖ Example: ―Acme® Crackers, Save $1.‖ Or for BXGO ―Product, Get 1 Free‖ Example: ―Acme® Crackers, Get 1 Free‖.
– Offer Type – Examples: ―$ off‖; ―% off; ―BXGO‖, etc. ―$ off‖ and ―BXGO‖ will be supported. (BXGO – Buy X Get 1 where the UPCs for the free product are the same as the UPCs of the product that the customer buys to get the discount.)
– Offer Availability Dates – The start and end dates for which the offer should be available to the consumer.
– Product GTINs/UPCs – The list of GTIN/UPCs that apply to an offer. Example: If there are six flavors of Acme Crackers® sold under different UPCs, the list should include all 6 UPCs.
15.3. Digital Coupon Technologies Overview
This section is not intended to be a comprehensive list, but is intended to serve as a starting point for more
in-depth understanding of some of the technologies discussed in this document. Multiple references are
made to external sources for additional information. However, their inclusion is not intended to indicate an
endorsement; it is provided only as a reference to more up-to-date information than can be provided on
a printed page.
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Bluetooth®
– Bluetooth® is a short range (less than 30 feet) wireless technology used to link devices and transmit data. A manual process is required to ―pair‖ devices in order to exchange information.
– The most popular implementation of Bluetooth® currently is for mobile phone headsets. However, ongoing experimentation is taking place utilizing it as an interactive media channel. Examples include in-store broadcast stations and outdoor signage that can interact with mobile devices.
– Security and ―spam‖ concerns do exist as with any wireless data communication technology (including Wi-Fi). Since signals are being sent ―over the air,‖ anyone or anything within range of the signal can attempt to interact with or ―hack‖ into the communication channel.
– The following web links have additional information regarding the technology and its use in marketing.
http://en.wikipedia.org/wiki/Bluetooth , http://en.wikipedia.org/wiki/Proximity_marketing , www.bluetooth.com
Near Field Communications (NFC)
– NFC is an ultra-short range (less than 20cm) wireless technology used to transmit data in near real-time. The ―handshake‖ overhead is much more streamlined than Bluetooth®, allowing for fast (less than 1 second) transactions. NFC is also compatible with RFID.
– NFC is becoming directly associated with ―contactless payments,‖ although there are many other implementations in the trial stage. ―Readers‖ are beginning to roll out in retail stores and mobile devices with NFC capabilities are beginning to trickle out into the market.
– NFC chips can also be embedded in posters, flyers, labels, and other hard goods. Simply tapping an NFC enabled mobile device onto a reader, poster, or other location with NFC can initiate the transfer of data. In this manner, coupon information could be transferred and stored on a mobile device, or verification that a valid offer exists could be transferred to the POS.
– Since NFC is also a wireless data technology, security concerns do exist, but in general are less significant than Bluetooth®.
– The following web links have additional information regarding the technology and its use in marketing.
http://en.wikipedia.org/wiki/Near_Field_Communication , www.nfc-forum.org
Camera Phone Bar Code Scanning (CBS)
– What if the ―world‖ was clickable? That is the ―holy grail‖ behind efforts to standardize and implement the systems required to enable camera phones to capture visual data and automatically initiate an interactive response on the mobile handset.
– These technologies have been in Asian and European markets for some years with varying levels of success. Most commonly, they focus on utilizing a ―2D‖/matrix code that can contain significantly more information than the 1D codes used for traditional manufacturer‘s coupons, UPC symbols, etc.
– Utilizing this capability, camera phones can capture offers directly from a visual medium, whether it is an Internet site, poster, or even the side of a building. Once a code is scanned, the mobile device can be sent directly to a WAP site, a SMS/MMS message can be returned, an application or other content can be automatically downloaded, or even a call can be initiated without using the keypad. From a pure technology perspective, it is possible to ―link‖ anything that can be photographed by a camera phone, causing it to initiate a mobile Internet experience—without hunting and poking around on a handset keypad or screen to find things.
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– There are challenges to making this work across multiple wireless carriers, with hundreds of camera phone variations. Similarly to following links on the Internet, there is also the possibility that unwanted interactions could occur. The current efforts by the CTIA focus on creating a standard ecosystem that the carriers can trust and make available to their subscribers.
– The following links show some uses and have additional information on the technology.
– Case Western Reserve Trial: www.youtube.com/watch?v=LEUC-3ZmhCg , http://blogs.mediapost.com/mobile_insider/?p=170
– ―Bar Code Hopping in San Francisco‖ http://www.npr.org/templates/story/story.php?storyId=89271743
Bar Code Strobing
– Technology that utilizes an LED or Infrared light source to strobe or ―pulse‖ data into a laser scanner at the point of sale. The scanner receives the information in the same way as if a visual bar code was scanned.
– Video demo: http://www.bnettv.com/player.php?id=905
Image Bar Code Scanners
– Whereas most optical scanners at POS cannot overcome the light-emitting properties of mobile device screens, image-based scanners (e.g. CMOS, CCD) can.
– Retailers that utilize image-based scanners at POS can consider bar code scanning of a mobile device as a potential presentment option for their consumers.
Common Short Code (CSC)/Short Codes
– A Short Code is a five or six digit numeric code that can receive a text message and generate an automated response back to a mobile handset.
– In many circles, American Idol is credited for popularizing the use of short codes in the U.S. The popular reality show displays ―text to‖ short codes at the bottom of the TV screen that allows viewers to vote for their favorite contestant.
– Short Codes are essentially a direct response vehicle utilizing SMS capabilities found in most mobile phones. A consumer‘s response by ―texting‖ to the Short Code typically initiates a text-based dialog between the sponsor and the consumer. WAP site links, phone numbers and other interactive elements can be embedded in the SMS, designed to further engage the consumer.
– Procuring a Short Code for a campaign requires approval through the individual wireless carriers. The process is centralized through the ―Common Short Code Administration‖ (CSCA) and several vendors have arisen that provide a more streamlined process.
– Costs and other information are available from the following:
CSCA: www.usshortcodes.com
Directory of Short Code owners: http://www.usshortcodeswhois.com/
―Decoding Short Codes‖ http://www.wirelessweek.com/decoding-short-codes.aspx