CLEARINGHOUSES FIND LAG IN QUICK-PAY USE

RICHARD TURCSIK

SAN ANTONIO -- Acceptance of the quick-pay system for electronic coupon processing has proceeded much more slowly than expected, admitted officials of three clearinghouses offering the program.

The quick-pay program, in which retailers are reimbursed more swiftly for coupons redeemed at their stores, had been heralded as one possible and readily achievable way to creating a more efficient coupon clearing system.

Among the retailers participating in quick-pay programs today are Wegmans Food Markets, Rochester, N.Y., which began testing the system in 1991, and Pathmark Stores, Wood-

bridge, N.J., which began a test program in March.

But a combination of manufacturer and retailer reluctance to sign on to the program and the need to update the system to achieve scanning verification and greater ease of use have hampered its progress, said Kari Costello, marketing director at Indiana Data, Bloomington, Ind.

"We need to come together as an industry to make quick-pay easier. Scan validation is the next step in electronic couponing. You need to go through the scan validation to get to electronic couponing. You can't skip it," Costello said.

Costello, along with officials from NCH Promotional Services, CMS and Nabisco Foods Group, discussed the benefits and problems of quick-pay systems at the Association of Coupon Processors' Spring Conference and Industry Forum here.

"We are very much in favor of getting some industry standards together to make it easier for the manufacturers and retailers to participate in the scan validation program," Costello said.

"Retailers wonder how many

manufacturers are going to be involved in the program. It leads to a standoff because the manufacturers are waiting to see what the retailers are going to do, and the retailers are waiting to see what the manufacturers are going to do. We need to get through this standoff situation," she said.

Richard Winkler, vice president of trade promotion services at CMS, Winston-Salem, N.C., said his firm's Scan Pay Express system began in Wegmans in 1991 with three manufacturers and now encompasses 18 manufacturers and 13 retailers.

Krista Di Bernardino, marketing development manager at NCH Promotional Services, Lincolnshire, Ill., said that her firm also has worked with Wegmans on quick pay for several years and is now examining how it can simplify and expand it across the industry.

"When Wegmans started the program the thought was that this would expand quicker than it did. I think Wegmans has really been thinking about quick pay a lot more lately and trying to figure out why there has been a slower acceptance than they had thought," she said.

Di Bernardino said that today Wegmans has 24 manufacturers participating with quick pay and that other retailers have slowly begun to use quick pay as well.

"Pathmark started around March with one manufacturer and they expanded it to three manufacturers as of mid-April. I believe they have four or five more that they are in negotiation with. We also have another retailer who is in the process of getting ready," she said.

A major obstacle to wider success with the program involves simplifying the process and going on-line with scan verification.

In an effort to simplify the scan data process, Wegmans recently conducted a test with Clorox that used a deposit method, Di Bernardino said.

Under the test program, NCH still receives scan data every week from Wegmans, and produces a coupon performance report and an invoice. "But we keep it on file at NCH and do not transmit the invoice and coupon performance report to Clorox," she said.

Instead, Clorox keeps a six-week deposit of funds with Wegmans based upon its average scan activity.

As a result, there is no longer a transfer of funds between Clorox and Wegmans. "Wegmans is basically monitoring the situation. They know how much they get on deposit and how much their scan data is worth and they monitor it to make sure that it remains in line, Di Bernardino said.