INDEPENDENT FINDING COUPON CLEARING PAYS

DENISE ZIMMERMAN

ST. PETERSBURG, Fla. -- Having overcome minor obstacles related to its new electronic coupon clearing system, Brodbeck Enterprises reports enough store-level benefits to continue the project in 1995.

Specifically, the Platteville, Wis.-based independent cited a speedier reimbursement period for manufacturer coupons, a reduction in chargebacks and greater systems control of data at its eight stores as key benefits from the test system.

The retailer now receives payment for manufacturers' coupons in one week as opposed to four weeks, said Bill Brodbeck, president and chief executive officer of Brodbeck Enterprises. "So this is substantially better" than the conventional coupon redemption process that involves time-consuming and costly handling of paper.

Brodbeck, who is among a handful of retailers that began piloting the system in late May, discussed his experiences during an electronic coupon clearing seminar here earlier this month. The session was sponsored by Retail Systems Consulting, Naples, Fla., and Catalina Electronic Clearing Services here.

CECS' program is being tested in about 20 stores operated by major retailers like Kroger Co., Cincinnati; Safeway, Oakland, Calif.; Vons Cos., Arcadia, Calif.; Pathmark Stores, Woodbridge, N.J.; Dominick's Finer Foods, Northlake, Ill.; Giant Food, Landover, Md., and Ralphs Grocery Co., Compton, Calif.

The scanner-based electronic coupon clearing system from CECS records and verifies coupons at the point of sale. Information is transmitted to manufacturers and the retailer's account is electronically credited, eliminating the need to sort, ship and count paper coupons.

When Brodbeck introduced coupon scanning to its eight Dick's Supermarkets, a few software compatibility problems and cashier training issues arose,

Brodbeck said. However, "The problems we have experienced have been of modest proportions" and, for the most part, resolved, he told SN.

"In general, things have gone well," he said, adding the company will continue the program into 1995. "As far as we're concerned, we're in it for the duration."

In addition to a faster payment period for manufacturer coupons, Brodbeck cited the following retailer benefits:

· Fewer chargebacks: Unlike the quick pay coupon redemption process, electronic coupon clearing is entirely paperless. "Costs of handling and clearing are eliminated," he said, "and there is no paper to be reconciled."

Like electronic coupon clearing, the quick pay system is based on scan data and does deliver quick retailer payment; however, quick pay still requires handling of paper coupons.

"Quick pay still saddles the industry with the inefficient, labor-intensive process of sorting and counting coupons," Brodbeck noted. "I would think it will most likely fall by the wayside as electronic clearing comes fully into its own."

· Systems controls: Brodbeck said the necessary upgrades for point-of-sale software, and potentially hardware, afford better data control not only to coupon validation but to all information processed at the point-of-sale.

For example, the system automatically tracks purchases and reconciles that data with coupon parameters as their printed bar codes are scanned.

"It is not unusual for consumers to purchase only one article when a manufacturer has specified two or three to a coupon. As appropriate, the system will reject the coupon with a specific error message."

A methodical system that flags such incidents is preferable for both cashier and customer. "It is far less punishing to the checkout operator to deny a customer's coupon when the point-of-sale system has noted that the appropriate product is not in the order," he said.

· Modest productivity gains: Brodbeck said while the company has not documented improvement in checkstand productivity, "We know some measurable, albeit small, productivity improvement exists."

· Coupon data reports: Reports based on coupons scanned at the front end can be used in sales forecasting and in conjunction with frequent shopper programs.

Industry observers estimate that electronic coupon clearing would dramatically reduce malredemptions and misredemptions and save the industry $750 million each year. Other companies poised to offer coupon clearing systems include Advanced Promotion Technologies, Pompano Beach, Fla., and Comark Technologies, Virginia Beach, Va.