The IPM’s Coupon Council, formed over 20 years ago, and
remains central informing to the industry on best practices for coupon and voucher
distribution and redemption. With a
landmark case in December 2016, the UK saw its first successful prosecution for
significant coupon fraud concerning ‘print at home’ style coupons. The party was found guilty under the Fraud
Act, Section 1, Section 7(1) along with charges of acquiring criminal property,
and was sentenced to 24 months imprisonment, although suspended for 24 months. The message from the Crown Prosecution
Service is clear: fraud will not be tolerated.
Cyber crimes are on the up and the coupon industry
continually looks at ways of improving security. With industry leaders,
Valassis, RMI and MRM presenting as expert witnesses in the case, the IPM Coupon
Council has prepared updated coupon guidelines for print and digital to help
safeguard brand owners and retailers. Since coupon fraud peaked at over £270K
per month in 2013, the IPM’s Coupon Council has worked with key industry
players to identify and halt fraudulent coupons. With this and other measures coupon fraud has
dropped now to under £20K per month. One
such successful cooperation has been with eBay who remove fraudulent coupons
being sold on line – most recently in November over 20 high value coupons were
removed within hours of notification, stopping in its tracks the loss of
thousands to the brands and retailers involved.
Coupons have changed much in recent years and whilst the standard
EAN 13 barcodes on printed coupons still present the most secure method of
tracking redemptions, fraudsters have become more accomplished in faking high
face value coupons. Peter Kerr, CEO of MRM and expert witness in the recent
fraud case, comments “Security is everything for clients. Making sure guidelines
are followed helps reduce fraudulent activity. The recent case just highlights
how well fraud detection is working and this court sentence shows perpetrators that
they won’t get away with fakes anymore”.
Along with traditional printed vouchers and coupons,
several types of digital execution now exist so the IPM advises that uniquely
numbered coupons are used for digital coupons to prevent fraud. In new digital
best practice, the IPM advocates that the usual clear consumer-driven
guidelines should always be followed, making sure that the retailer processing
the coupon understands the ‘real-time’ nature of many digital coupons or
vouchers and the risk of redeeming anything that can’t be verified.
IPM Coupon Council Chairman, David Tymm, CEO of digital
voucher business i-movo, cites the industry guidelines as the way forward to
set the right self-regulation and adhere to the CAP Code.
‘Coupons are a great way for a brand to reward loyalty,
encourage purchase and engage with consumers. It’s up to the industry to make
sure that these important vehicles involving over 950 million transactions a
year are looked after – the IPM remains central to fighting fraud in this
sector to help promote effective marketing tools’ comments Carey Trevill,
managing director of the IPM. ‘The IPM Coupon Council collaborates to ensure
that the whole industry can act together.’
The IPM’s Coupon Council is represented by industry leaders in the
processing field including MRM, i-movo, Quotient and brand owners such as Heinz.
Education remains key to making sure brand owners don’t inadvertently fall foul
of fraudsters. By sticking to tried and tested methods of delivery whether in
print or digital mediums, risk is minimised across the board.
Each week, the top five most fraudulent coupons are
circulated with major retailers and between clearing agents. High face value coupons
(over £2.00) are the most abused – often the type of voucher that is used by
customer care departments. The IPM Coupon Council urges a review of these types
of coupons and vouchers in the market place to ensure that all secure steps
have been followed, all of which can be found on the IPM’s website.
It’s impossible to avoid 100% of fraud but taking steps to
protect revenues is worthwhile.
Seeing coupon fraud peaking at over £3m few
years ago, the collective efforts of the IPM’s Coupon Council Clearing
Practices has seen this reduce in the past eighteen months, signaling a
breakthrough for the battle against fraud.
With further warnings of
austerity to come in 2017 and the announcement that household debt has risen
again, vigilance in the industry is paramount to ensure we able to continue to
reward through the use of coupons and vouchers and bring the letter of the law
down on those who abuse it.
For further comment on this article, please contact Carey
Trevill at the IPM on 020 3848 0444 or email to email@example.com.