Mobile couponing will save UK millions in fraudulent redemptions

Coupons continue to be a valuable acquisition and loyalty tool. However, around 30% of paper coupons in the UK are subject to fraud, according to mobile coupon service Shopitize. This misredemption and malredemption of paper coupons is costing firms in the region of $240 million a year.

The problem shows no signs of abating with consumers attempting to use out-of-date coupons or sharing discount codes with friends, particularly via social channels.

"It is extremely difficult to try and come up with a solution that prevents paper couponing being subject to fraud," says Dr Alexey Andriyanenko, joint managing director and co-founder of Shopitize, in a company blog post. "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."

However, the use of mobile coupons can go a long way to preventing fraud, according to Andriyanenko, who believes it has the capacity to be virtually 100% fraud free. Furthermore, the process of redeeming a mobile coupon is faster and easier for consumers and retailers alike, and makes the entire process safer.

"Mobile couponing also does not rely upon the retailer to authorize the coupon, so human error is eliminated," says Andriyanenko. "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."

Tags: coupon research, mobile coupon, mobile marketing, mobile payments, mobile trends, paper coupon, retail, UK