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Exploring Changes in the Coupon System
Over 330 billion manufacturer paper coupons are issued in the US annually with almost 4 billion individual coupons redeemed by consumers. A coupon has an average face value of 84 cents. Over 100,000 US retail companies accept coupons at their individual store locations. Over $300 billion in coupons are circulated annually in the US. Coupons are legal tender in the US. The redemption process by which retailers are reimbursed by the manufacturer is outsourced to processing agents.
The current system is broken.
- Companies with U.P.C. Company Prefixes greater than 6-digits can no longer be uniquely identified at coupon processing points by scanning the coupon. The company must be identified by a person reading the text of the coupon.
- Only companies with U.P.C. Company Prefixes can create coupons. Companies without U.P.C. Company Prefixes will include other GS1 members that will be shipping product into the US and Canada as a result of 2005 Sunrise, and in the future, GS1 US members that will be assigned GS1 Company Prefixes beginning with 10-13. Also, new GS1 Canada members, who are assigned GS1 Company Prefixes from Canada's newly assigned GS1 Prefix, will not be able to create coupons.
A solution is available.
The Joint Industry Coupon Committee (JICC) and solution partners assisted by GS1 US BarCodes and eCom developed a Coupon Re-Engineering Proposal. It provides a foundational solution for the issues and requirements as identified by the JICC. A public review has been completed and a report submitted to the GS1 US Board.
- A coupon data structure and content are defined along with a proposed migration plan. The migration plan is compatible with the discussed open use of Reduced Space Symbology® (RSS).
- The approach ultimately enables an electronic database using a unique key, the Coupon Processing Code. The approach makes it possible for paper and electronic systems to co-exist.
- It will work for store coupons and tenders such as gift certificates.
- It will work as a part of Loyalty card programs.
- It will work with Electronic Product Code™ (EPC) as it evolves at item level.
The JICC must now manage implementation. JICC needs feedback and support to identify limits that should be imposed to make certain offers are clear to consumers (limitations today sometimes result in confusing offers).
Action is needed.
GS1 US is awaiting industry consensus for commitment to implement. Once industry commitment is achieved, GS1 US will initiate standards changes, create guidelines, promote awareness, and conduct training.
Companies that create or redeem coupons are encouraged to participate in the JICC Coupon Re-Engineering Group.
Until the new system is fully implemented, the cost and inaccuracy of redemption will continue to rise. Manual processing of coupons will increase due to the increasing number of conflicting partial U.P.C. Company Prefixes in use. The JICC wants as much input as possible.
References
The Business Case For Reduced Space Symbology® (RSS®) on Coupons.
Review the Business Requirements and background.
Request the Coupon Re-Engineering Proposal.
The Solutions Center the online information library for the GS1 System tools to help you improve supply chain management and conduct business more productively.
The Association of Coupon Professionals (ACP) is an industry trade organization for marketing professionals who work or have interests in the consumer promotion business.
The coupon data structure for the Euro coupon issuer numbers are administered by GS1 Belgium-Luxembourg.
View the migration path at a glance.
Coupon Re-Engineering Status Report from the Joint Industry Coupon Committee (JICC)
View Frequently Asked Questions about the Coupon Re-engineering initiative. Updated October, 2005
Comments
If you have comments or questions you can contact us by proceeding to CouponQuestions@gs1us.org and provide us with your company and contact information.
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