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Mobile could spell the end of paper couponing fraud, believes Shopitize

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According to mobile couponing platform Shopitize, misredemption and malredemption of paper coupons is costing retailers and brands £150 million each year, but will become less and less of a problem in the UK as mobile couponing takes hold of the shopping market.

The UK’s £500million voucher and coupon market is vital to both manufacturers and retailers as they struggle to attract customers in these tough economic times. However, although paper couponing is seen as a valuable marketing tool, it is estimated that around 30% of all coupons used are subject to fraud.

The misredemption and malredemption of coupons is a growing social problem. Many shoppers see little wrong in buying invalid goods with coupons, or using out-of-date coupons if they can get away with it. It has also become commonplace to share a discount code with friends, or through social media sites so everyone can cash-in.

However, it is not just the individual who is playing the system, as paper coupon fraud is now big business. Internet sites are full of coupon bundle offers that have been collected wholesale from newspapers and magazines. Photocopying or digital manipulation is also widespread. All of this is causing major rifts between retailers and brands as they argue over who pays the bill.

Dr Alexey Andriyanenko, joint managing director and co-founder of Shopitize, says mobile couponing has the capacity to be virtually 100% fraud-free. Andriyanenko explains: “It is extremely difficult to try and come up with a solution that prevents paper couponing being subject to fraud. Attempts have been made, either by training retail staff to be more vigilant or by introducing more sophisticated bar-coding, but ultimately mis/malredemption still takes place which greatly increases the costs for any brand running a campaign.

“What’s clear is there is no desire by any side for the coupon industry to be abandoned, rather a solution needs to be found to protect it. This is one of the main reasons why paper couponing is now being complemented by new digital and mobile solutions. Like everything, couponing has evolved and the transition to mobile couponing is inevitable. Not only does it make the coupon experience simpler and faster for both the consumer and the retailer, but it makes the whole process much safer.

“The most obvious advantage of mobile couponing is there is no paper involved, thus making it free from forgery. Now couponing has become an automated process which gives consumers relevant coupons as a result of their purchase history. Entitlement is key. We can tell exactly who is entitled to a coupon and who is not by verifying their shopping receipts. Therefore, we have the exact numbers of who should be using their m-coupons and who should not. We also have the option for manual verification if we suspect anything untoward is taking place.”

Andriyanenko adds: “Mobile couponing also does not rely upon the retailer to authorise the coupon, so human error is eliminated. A busy, tired, cashier no longer has to manually verify countless paper coupons at the checkout. Now it is done via our automated ecosystem, not at the check-out, thus preventing queue bottlenecks.

“It is very difficult to say that anything is 100% safe from fraud, but this is certainly what we are aiming for. What we can guarantee is that our mobile couponing service has the capability to dramatically reduce the level of coupon fraud in the UK which in turn will save retailers and manufacturers a substantial amount of money.”

Shopitize’s free mobile couponing app was launched for both android and iPhone earlier this month. It enables big name brands such as Kellogg’s and United Biscuits to send exclusive deals on their products direct to the consumer’s smartphone. Users simply visit any supermarket or shop to buy a featured product, use the app to check the promoted products’ barcodes and snap their paper receipts, the image is automatically uploaded to the mobile ecosystem and once validated, they claim cashback.

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