Target Has a Coupon Problem
There’s no doubt that consumers are watching their pennies.
The new Food Marketing Institute Grocery Shopper Trends report shows
that price is the most important factor for 75 percent of consumers when choosing
a store. Number three on the list is money-saving specials (67 percent). That’s
part of the reason that the latest news about Target is so troubling.
The chain,
it turns out, has had a coupon problem going back months. Consumers checking
out have only been receiving a portion of the value of coupons and sometimes
no discount is rung up at all.
Kara McGuire, who writes for the Minneapolis
Star Tribune, included this
personal account in a blog on the paper’s website. "One pesky item is
still staring at me from my to-do list: ‘Go to Target and get $5 back.’ Last
week, I bought the five Kraft cheeses needed for my $5 off coupon to work.
Then I went home and scoured the receipt — something I always do. Although
a line for the coupon showed up, I was looking at a big fat zero."
Ms.
McGuire is not alone as blogs and interviews with consumers prove.
Caroline
Jaworski, a Target shopper in Illinois, told the Chicago Tribune she
had a coupon for $1.50 off the purchase of two feminine hygiene products, but
that only $1.02 was discounted when she checked out at a her local store.
"It makes me not want to go there," said Ms. Jaworski. "You
really have to watch the registers, and for people who don’t, they don’t know
they’re getting ripped off."
The problem appears to happen primarily with
multiple purchase discounts. Instead of applying the discount across all items,
it puts it against a single product. Since the system will not allow the price
of an item to go below zero, it reduces or eliminates the value altogether.
Erika
Svingen, a spokesperson for Target, said cashiers at the chain are instructed
to check all receipts to make sure proper coupon discounts have been given.
"We
are aware of the issue and are diligently working on a fix for that and will
implement it as soon as possible," she told the Trib.
Discussion Questions: From your experience, is Target’s problem a common
one across retail? How should they best respond to the problem?
While it does not seem to be an industry-wide problem, the coupon debacle at Target can become a huge problem if not managed properly. At the end of the day, all that a brand has going for it is trust. If Target loses the consumer’s trust, they will lose the customer. Cheating customers at the check-out register is the fastest way to lose this trust.
Further, it is important to comment on Target’s “official” response that it is up to the cashier to make certain that the right amount of a coupon has been deducted by the computer programmed cash register. Really? Really Target? The cashier should be able to scan this more effectively than the computer? I don’t think so.
Target’s coupon problem (discounts not being applied) is not overly common but it does exist in the industry for a number of reasons. One reason though is that some manufacturers are not doing diligence to be sure that their product’s coupons are scanned properly.
This is a common problem with a lot of retailers. Walmart seems to have avoided this nonsense by not playing the coupon game. The more games you play with the consumer the more chances that they will blow up. The more successful retailers are the ones that don’t try to fool the consumer with cards, coupons, and games.
Well, aside from the back-end issue of how a discount is applied to multiple purchases of the same item, I’ve seen personally that Target cashiers are trying to hold barcoded coupons to a standard that we just don’t seem to be at yet – in other words, they seem to think that just because a coupon has a barcode on it, it’s going to be an accurate match against what you’ve purchased. So if they scan the coupon and the POS says that the item is not found, they’re more likely to turn back to you and say “You must not have bought this item.” I’ve been stuck in line behind people who had a LOT of coupons who have argued every single one, and I’ve found myself in the same boat – I DID buy this item, and literally pulling it out of the shopping bag to prove it. While I appreciate that grocers don’t want to give away coupons against items the consumer didn’t actually buy, getting into an extended argument with a customer over 50 cents off doesn’t seem like a good customer service strategy.
The barcodes on coupons just don’t work that accurately – different POS implementations are not going to be able to match them up against product purchases with a 100% success rate. Retailers need to train cashiers to deal with it, and consumers need to be aware too.
People are eager to save, but they need to trust the retailer they are supporting. Target should work hard to 1) correct the issue 2) create some type of special coupon savings for shoppers as an apology to help make things right. Example: 10% off the entire store during the 1st week in November. This good will jester shows that they acknowledge there was an issue and it is now fixed and they want to be sure their customers receive something for the inconvenience and potential loss.
The other option which would require more work would be to search their entire POS system for all the coupons that did not correctly register and send each person back a check for the amount they were suppose to receive.
Retailers, like all of us, can make a mistake. How you repair that mistake is what differentiates the good from the great.
I’ve certainly encountered coupon redemption issues before, both as a consumer and in my conversations with retailers.
For manufacturer coupons, problems often arise when the coupon is a more complicated, multiple-purchase offer that some older POS systems don’t automatically apply. On the flip side, retailers who try to validate coupon family codes often encounter problems when brands introduce new items that are eligible for the coupon, but which the retailer hasn’t yet added to the family code validation list.
For retailer coupons, there are also ample opportunities for problems, based on the particular peculiarities and restrictions imposed by the POS, loyalty, and pricing systems.
So, what should Target do about it? They should try to turn this into a benefit story for their credit card holders. They should go back into their POS logs and retroactively identify any missed savings by Target cardholders and refund the lost coupon savings to the cardholder on their statement. And of course, they should tell everyone (cardholder and non) how well they treat their card-holding customers.
Not sure this is an industry wide problem…but a big PR issue. Target is normally really good with doing the right thing. This may be one of those times to turn around a problem before it becomes one. Something like running an mea culpa ad with a 15% off offer on your entire order. May be overkill…but reestablishes them as the “good guys.”
Target really ought to be “mobilizing” their coupon programme. By enrolling customers to receive offers to their phones, they can ensure that each coupon is appropriately and relevantly targeted, that there is no mis- or mal-redemption, that the correct discount is applied and that paper voucher, printing, and fulfillment costs – along with plastic cards – are eliminated.
My opinion is that far more customers do not use printed coupons than use them, and the ones who do will watch to make sure the amount rings properly. I actually had an associate catch the discrepancy when I checked out. I think if associates are aware there is an issue, they will correct it. The troublesome thing would be to be the customer who doesn’t use coupons who gets in line behind someone who does that needs a lot of amounts corrected.
My local Kroger store has issues with this also, so I think it happens because the manufacturers don’t do their due diligence. If we transition to mobile couponing, it will become more of an issue.
There may be an industry-wide problem. I have observed this at two retailers. Example: If you have a coupon worth 50 cents when you purchase four packages of yogurt, but each package is 39 cents, the computer will limit redemption to 39 cents. This often happens when the store had a double coupon policy.
I’m with David on this one. What’s needed here is less gamesmanship with greater accuracy.
POS systems have long struggled to accurately apply multiple item discounts. Some retailers opt for the familiar work-around of simply reducing the individual item price. An alert shopper who catches on to this may obtain the discount on any quantity of the promoted item.
Retailers with more sophisticated POS systems have the capability of counting promoted items until the offer threshold is reached. This enables such at-shelf offers as “buy one, get one at half price” or “buy 10, get $1 off”.
Folding manufacturer coupons into the mix adds another layer of rules to the system, especially when the manufacturer offer is in conflict with retailer redemption policies. I’m pretty certain the bar codes work fine nearly all the time – however conflicts in the subsequent coupon logic causes the process to break down.
Target must now battle an unfortunate trust problem. Shoppers who feel victimized will share tales of woe all over the social networks. And coupon issuers may cry foul over systematic mis-redemption that could cause them to pay out higher amounts than shoppers actually receive. I can just imagine what Target’s accountants are going through now to untangle the mess….
Training and empowering its checkers to recognize and correct redemption errors is a stopgap fix. But fixing the underlying redemption process is a whole ‘nother challenge.
I can’t say whether this is a widespread problem across the industry, but it’s definitely a problem for Target. They appear to have dragged their feet on properly addressing the problem, and it will most certainly cause shoppers to lose some brand trust.
According to some of the articles, this problem at Target goes back several months. While consumers may be sympathetic to tech issues, such problems fall down the ladder of concerns when personal finances and brand trust come into play — especially for today’s recession-hardened consumers who have turned to discounters and cents-off coupons as a way to save dollars. Target appears to have lost valuable time by not getting in front of this issue. It’s time for a full apology and an explanation of what happened and how it’s being addressed. A temporary policy for correcting errors is also in order. And it would be nice if Target found some additional way to restore trust – perhaps a one-day double coupon event.
Other retailers who are not experiencing such issues should also take note. Target may be the brand under fire, but lack of trust in receiving coupon discounts at POS will carry over to other brands. This is a good time to re-educate store associates to ensure coupon and loyalty card discounts are properly registered at checkout. It’s also a good opportunity for consumer advocates and some brands to teach shoppers to be smarter consumers by taking the time to ensure their receipts are accurate.
Coupon industry statistics seem to indicate that this certainly isn’t an industry-wide problem, as consumers are using coupons more these days than at any time in the past decade. Industry coupon redemption was up over 20% in 2009, and is on track to grow further in 2010.
Target ought to get in front of this problem, fix it, and provide remediation to affected customers (or all its customers). Target has been a leader in the move to mobile coupons, which are being readily adopted by consumers as well.
The coupon industry is continuing its progress in making coupon redemption more standardized, accurate and controlled. The new GS1 DataBar barcode rolls out in 2011, and digital coupons promise further advances in accuracy and controls. Consumers are voting strongly in favor of coupons these days, and retailers, manufacturers and other industry players should guarantee that coupons deliver on their promises.
I do not get the sense when shopping at Target that there is any caring for the customer except for the money they come in to spend. No one seems to know where products are located when you ask. Customer service is not their strong point. Never has been to me as a shopper. So this does not surprise me.
It is bothersome that the official response is “not my fault, it’s the cashiers.” So the lowest common denominator takes the fall for corporate’s screw up. That is what you can do when you are the 799 lb. gorilla. They have the opportunity to be the hero if they act prudently to resolve this problem. My guess is it will linger too long.
Target is disappointing a lot of its shoppers including me. I feel that I am getting grossly shortchanged when the proper coupons and Catalinas do not show up as receipts.
Great A&P has been very good about following up on these offers to ensure that their loyal customers are getting the coupons they are entitled to receive. Over the past weeks, I have gotten both $10 off and 10 percent off my order, as well as a free gallon milk, free gobbler mug, free organic cereal, and other savings.
To win over customers, a company has to do right by its coupon policy.