FOOD LION EXPANDS INTERNET COUPON OFFERING 2004-08-23 (1)

Julie Gallagher

SALISBURY, N.C. -- Despite concerns among some chains in the Southeast about Internet coupon fraud, Food Lion here has expanded its online coupon offering on its Web site and through e-mail.

The chain, which operates more than 1,200 stores, has started offering customized coupons to loyalty card shoppers via a weekly e-mail newsletter through its partnership with Brand Coupon Network (BCN), Metairie, La.

Also, Food Lion has added coupons from CoolSavings, Chicago, to its Web site, www.foodlion.com, where it already offers coupons from ValuPage, St. Petersburg, Fla., and SmartSource Savings Network, New York.

"We're trying to provide as much convenience as possible. We think the Web is one way to do it," said Jeff Lowrance, Food Lion spokesman. "Customers are looking for additional value. We're able to provide [many] options via foodlion.com."

Expansion of Food Lion's Internet coupon offering comes less than a year after many retailers -- including Publix, Lakeland, Fla., and Harris Teeter, Matthews, N.C. -- stopped honoring Internet coupons after fakes were obtained via the Internet.

Online coupon fraud affected retailers in numerous markets. However, the problem was most prevalent in and around Atlanta, where coupons for free products kept cropping up. Harris Teeter has since resumed accepting online coupons. Publix continues to decline them.

Food Lion maintained its coupon acceptance policy. Yet the issue prompted the retailer to show managers and cashiers how to better spot fake coupons.

"Internet coupon fraud affected some other chains more than it did Food Lion," stated Lowrance. "We've not been significantly impacted by fraud. Until we are, providing convenience to our customers outweighs the risk of Internet coupon fraud."

Customized Coupons

BCN coupons sent via e-mail newsletter are customized with the consumer's last name, age, ZIP code and household ID number for verification purposes.

Membership in Food Lion's MVP Customer club is required for subscription to the newsletter, which includes national-brand and private-label coupon offers.

CoolSavings' e-coupons are protected from unlawful duplication by a watermark that cannot be reproduced, said Christine McNicholas, senior vice president of retail partnership, CoolSavings.

The household name is also printed on each CoolSavings coupon to protect against multiple redemptions. Each coupon has a one-per-household limit.

Loyalty club membership is not needed to access CoolSavings coupons found on Food Lion's Web site. Yet visitors must register for access to the coupons on the site. CoolSavings' security functions are in place for coupons accessed on www.foodlion.com. They are designed to prevent consumers from printing a particular coupon more than once with the same computer or identification number.

To protect against fraud associated with free product redemption, CoolSavings has adopted a policy against offering coupons that can be redeemed for free goods.

"Free offers could become widely [and fraudulently] distributed," said McNicholas. "A typical cents-off coupon provides a discount between 75 cents and $1. If a consumer has to pay at least some money to obtain a good, it's not worth their time [to reproduce the coupon]."

Harris Teeter resumed accepting Web coupons in May after not accepting them for eight months. Yet it decided to reject ones for free products and limit the number of coupons to two per manufacturer product.

It reserves the right to reject Internet coupons that appear unoriginal, and those that don't scan properly.

Publix, however, has not resumed accepting coupon offers from the Internet.

"At this point, our policy stands. I cannot speculate if Publix will ever again [accept e-coupons]," said Brenda Reid, spokeswoman, Publix.