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CPGmatters: CPG Marketers Ready to Roll with Holograms

February 15, 2012

Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.

The jig is up for counterfeiters of free and high-value coupons.

Most consumer packaged goods marketers will issue coupons bearing a special standardized hologram sometime during the first half of 2012, said Bud Miller, executive director of the Coupon Information Council (CIC).

Holograms are three-dimensional photographic images that are printed on a special foil. Their use on the free and high-value coupons is expected to deter the distribution of unauthorized copies, which has been a nettlesome issue for years. With some individual counterfeit coupons defrauding a company of more than $1 million apiece, holograms are likely to save the industry big money.

"Holograms are the only tool in our toolkit that cannot be easily circumvented by people using business or home office equipment," Mr. Miller noted. "Everything else we've seen either can be replicated, or adjusted to the point where you can't really tell the original from the attempted replica, or it is just too esoteric and people won't notice the difference.

"A hologram is instantly recognizable. All a cashier just has to do is take a look at it. If they know what they are looking for, they will be able to verify that there is the CIC hologram on the coupon as quickly as their eye can see it," he said.

There is an extra cost to putting the hologram on coupons — some estimate it to be two or three cents each — so it is not cost-effective to use it on every one. Said Mr. Miller, "But when you have very high-value coupons, the exposure can be significant. A single counterfeit — if it gets into a runaway condition — can easily cost a company more than a million dollars. You have to weigh the cost versus the benefits."

A debate ensues on whether the hologram technology should be used on only "high-value" coupons — those that usually represent a more significant reduction of a product's cost than an ordinary coupon.

Retailers are monitoring the hologram development. "This is a leading technology that, while it doesn't have enough penetration in the marketplace yet, it has the potential to be a deterrent against fraud," said Heather Garlich, a spokesperson for the Food Marketing Institute, Arlington, Va. "We'll be watching this technology."

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