JICC COUPON GUIDE RECOMMENDS UPGRADES AT FRONT END

ADAM BLAIR

WASHINGTON -- A report from the Joint Industry Coupon Committee urges retailers to upgrade point-of-sale systems so they can scan the additional coded information being printed on manufacturer coupons, speed the checkout process and cut down on coupon misredemption.

In addition, the JICC plans to publish voluntary industry guidelines for electronic clearing and auditing of coupon redemption next month. Such a coupon-handling system would replace the current labor-intensive manual redemption process, which involves both retailers' and manufacturers' representatives counting coupons.

In an electronic redemption environment, "When a coupon is scanned and validated at the front end, an electronic record is created and the coupon is cleared at that point," said Mark Allen, senior manager of industry relations and education at the Grocery Manufacturers of America here.

"Since the information is captured off the coupon, it's much easier to reconcile counts," he added. In essence, electronic redemption would be a one-count system rather than the current two-count system.

The goal of simplified coupon clearing has been elusive for the supermarket industry. Catalina Marketing, St. Petersburg, Fla., pulled the plug on its electronic coupon-clearing test, which had the participation of several large manufacturers and retailers, in April 1997 after more than three years.

The JICC guidelines were worked on by a committee that includes manufacturers, retailers and wholesalers, said Allen. "We've laid all the issues out on the table, and given people a road map on how we think they should go about this," he noted, while adding that the guidelines should be considered a "working document. As knowledge increases, we may go back and update these issues."

The current JICC report, "Coupons: A Complete Guide," was published in January and represents a "comprehensive set of voluntary guidelines incorporating all the new work by the GMA and the JICC over the last three years," said Allen. "The goal is to make couponing as efficient and effective as possible, for the ultimate benefit of the consumer."

The JICC is comprised of members from GMA, the Food Marketing Institute, Food Distributors International, the Uniform Code Council and several other industry organizations.

The report recommends a number of steps to streamline the current paper coupon process. These include use of electronic data interchange transactions to transmit coupon information among trading partners, as well as considering the use of electronic funds transfer for coupon reimbursements.

One of the report's key recommendations is for retailer POS systems to be able to scan the EAN-128 code on coupons as well as the Universal Product Code coupon code. The extended code includes such information as the coupon's expiration date.

"This is a big benefit for retailers, because the cashier would no longer have to look at the coupon to validate the expiration date," said Allen. "It would speed up and improve productivity at the front end."

While manufacturers have moved aggressively to place the EAN-128 codes on coupons, "not many retailer systems are currently able to read it," said Allen. However, retailers are beginning to consider such upgrades as part of their front-end technology reviews. "In the next couple of years, I think you'll see a lot of people pick up and utilize these codes."

Another recommendation is for front-end systems to be able to read the 992 bypass family code, used if a manufacturer wants to offer coupons on products in a number of different categories.

Without the 992 code, "if a manufacturer was couponing five items with five separate manufacturer IDs, it wouldn't work," Allen explained. "What 992 tells the system is to bypass validation at the manufacturer ID level and scan for the value of the coupon only."

Another JICC publication scheduled for release by this summer will apply activity-based costing principles to the entire coupon process. "This will be a cost-benefit study that will also include a software model, so a company could put in its own numbers," said Allen. In preparing the study, "One thing we've found already is that the face value and the handling fee are only a small percentage of the cost of issuing a coupon."