Firstly it is worth defining what misredemption is.
The Institute of Promotional Marketing together with Valassis have developed the following standard industry description:
Misredemption is where a consumer presents a coupon which is actually invalid, but the retailer accepts it.
Coupons may be invalid for various reasons. For example, the terms and conditions on the coupon may specify one particular product or pack size, but the consumer does not have that item in the basket; the coupon is out of date; or the consumer is attempting to redeem more than one coupon when the terms and conditions specify only one can be used per shop or per household.
There’s a perception in the coupon world that the majority of consumers lie in wait for unsuspecting coupon issuers so they can deliberately misredeem their coupons and skip off laughing into the sunset.
And if you’ve been burnt by misredemptions in the past, who could blame you for thinking this as well?
The reality is a little different though. In June 2009 Valassis commissioned Gfk NOP to research and find the real misredemption rates and whether we should all be very, very worried.
What was found put our minds at rest and we hope will put yours at rest too…
…from a UK-wide representative panel of 1000 people, 1 in 10 admitted to having knowingly misredeemed coupons in the past. This is much lower than we expected, equating to around 5% wastage in the average coupon campaign budget. A significant lower level of wastage when compared to other types of promotion media.
Now, we’re not saying that’s acceptable.
Like all coupon issuers, Valassis wants to see misredemption in all forms stamped out, and we’re working hard to achieve this. Such as trying to ensure all our customers follow basic coupon rules, like not putting high value coupons in newspapers and magazines, or getting our team to check the final coupon proofs for mistakes before they go to print. And of course, we encourage our customers to think about insurance to offset the risks.
By following some tried and tested guidelines combined with careful targeting of your promotion, coupons are still your best way of gaining extra business for pennies per consumer.
Retailer misredemption – a thorny issue
There is however one thing we cannot do. As we work with both retailers and manufacturers, we cannot act as a mediator in matters over non-payment of misredeemed coupons. For example, a retailer may have accepted coupons on products they don’t list and subsequently be out of pocket if the manufacturer refuses to pay.
We can advise both parties on best practice in such cases, but for obvious reasons we cannot take sides. The thorny issue of misredemption by retailers is currently something the Institute of Sales Promotions is tackling. For more advice on the matter please go to
www.isp.org.uk.