I want to create a manufacturer coupon.
February 6, 2018 11:28 AM Subscribe
If I want to create a coupon that is recognized by Lowe's, Best Buy, Costco, etc., who is the gatekeeper?
If I think about Cheerios: How does every grocery store and bodega with a bar code scanner know to recognize the Cheerios coupon in the Sunday paper and have it automatically take $1 off? Are they all networked to a central database? (How did this work with Sunday paper coupons 20 years ago?)
I understand the concept of contracts and MOUs and so forth that allows businesses to agree to match coupons to SKUs -- so is that something that General Mills works out with grocery store IT departments 6 months in advance of each coupon being published? Or does the manufacturer push/"publish" the coupon and let the retailers that are interested do the work of integrating their SKUs to it?
I can imagine the business back end, but from a practical, IT, my-15-digit-coupon-bar-code-is-867000000005309-please-recognize-it-(and-Froot-Loops-can't-use-that-number-because-Cheerios-is-using-it*) perspective, how is the process managed? And when you get out of the grocery market into a mixed market of big box stores (department and discount and electronics and hardware), should there be a concern that these bar code systems can't all scan the same manufacturer coupon bar code?
* I know UPCs are centrally managed in this way to make sure that UPC codes don't overlap. Is there a parallel service for coupons?
If I think about Cheerios: How does every grocery store and bodega with a bar code scanner know to recognize the Cheerios coupon in the Sunday paper and have it automatically take $1 off? Are they all networked to a central database? (How did this work with Sunday paper coupons 20 years ago?)
I understand the concept of contracts and MOUs and so forth that allows businesses to agree to match coupons to SKUs -- so is that something that General Mills works out with grocery store IT departments 6 months in advance of each coupon being published? Or does the manufacturer push/"publish" the coupon and let the retailers that are interested do the work of integrating their SKUs to it?
I can imagine the business back end, but from a practical, IT, my-15-digit-coupon-bar-code-is-867000000005309-please-recognize-it-(and-Froot-Loops-can't-use-that-number-because-Cheerios-is-using-it*) perspective, how is the process managed? And when you get out of the grocery market into a mixed market of big box stores (department and discount and electronics and hardware), should there be a concern that these bar code systems can't all scan the same manufacturer coupon bar code?
* I know UPCs are centrally managed in this way to make sure that UPC codes don't overlap. Is there a parallel service for coupons?
Best answer: Yes, coupons are made from the same type of UPC as product barcodes.
You can see a breakdown of a coupon UPC here. When the checker scans the coupon, the system interprets the manufacturers code, family code, and value code and can look back at the SKUs previously scanned to check for a valid coupon. There's more information here.
It is a fact that the coupon barcode is often less restrictive than the actual text of the coupon, which extreme couponers use to get discounts on things they shouldn't get discounts on. The other side of this is that sometimes machines don't recognize my manufacturer's coupon and the clerk has to enter it manually.
So if you want to make a manufacturer's coupon, you need to start with your product UPC.
posted by muddgirl at 11:51 AM on February 6, 2018 [3 favorites]
You can see a breakdown of a coupon UPC here. When the checker scans the coupon, the system interprets the manufacturers code, family code, and value code and can look back at the SKUs previously scanned to check for a valid coupon. There's more information here.
It is a fact that the coupon barcode is often less restrictive than the actual text of the coupon, which extreme couponers use to get discounts on things they shouldn't get discounts on. The other side of this is that sometimes machines don't recognize my manufacturer's coupon and the clerk has to enter it manually.
So if you want to make a manufacturer's coupon, you need to start with your product UPC.
posted by muddgirl at 11:51 AM on February 6, 2018 [3 favorites]
Best answer: This is usually negotiated when onboarding a new retail customer. Sales contracts are normally flexible enough there's no need to negotiate each each individual coupon run through the IT department. They agree to reimburse the retail customer for each coupon, and that reimbursement is usually trued up on a monthly or quarterly basis.
The contract will specify what elements make up a valid coupon, and it's on the wholesale partner to make this strict enough they don't lose to fraudulent coupons while easy enough to implement the retail customer is willing to collect, review and submit the coupons for reimbursement.
Retail customers generally provide a wide amount of sell-through data, so the wholesale partner already has a good understanding of their POS systems and capabilities.
posted by politikitty at 12:32 PM on February 6, 2018 [1 favorite]
The contract will specify what elements make up a valid coupon, and it's on the wholesale partner to make this strict enough they don't lose to fraudulent coupons while easy enough to implement the retail customer is willing to collect, review and submit the coupons for reimbursement.
Retail customers generally provide a wide amount of sell-through data, so the wholesale partner already has a good understanding of their POS systems and capabilities.
posted by politikitty at 12:32 PM on February 6, 2018 [1 favorite]
This thread is closed to new comments.
posted by LuckySeven~ at 11:46 AM on February 6, 2018 [3 favorites]