Securing The Future with eSettlement Best Practices

THE INDUSTRY'S WISH LIST includes cutting costs, enhancing cash flow, reducing fraud and eliminating paperwork.

Manufacturers and retailers hope to benefit from the promise of seamless, streamlined transactions powered by eSettlement. The concept is simple. Retailers electronically compile data on coupon redemptions, transmit the information directly to the manufacturer or its designated representative, get paid, and destroy the coupons.

However, potential participants should consider several critical issues prior to implementation.  

Most importantly, participants should understand that eSettlement shifts specific tasks and responsibilities between different parties in the coupon redemption process. For example, secure storage and destruction of coupons accepted at stores, as well as associated expenses, will shift from coupon processors to the retailer.  

Potential participants, along with their legal counsel, should review any potential legal considerations associated with eSettlement. Contractual relationships should be reviewed in particular. Examples include contracts between retailers and retail clearinghouses and contracts between manufacturers and their agents. Will additional contracts be appropriate, such as directly between the retailer and the manufacturer?

Some of the other items to be reviewed include:

• The use of Positive Offer Files
• The use of Negative Offer Files (CIC’s Early Warning File is free for retailers)
• Accurate barcoding 
• Purchase verification
• Secure coupon storage and destruction
• Auditing procedures.

Finally, it is important that all parties engage in an open dialogue as eSettlement plans are being developed. A healthy and mutually respectful conversation will benefit everyone and create an opportunity to address any issues as they evolve.

A free copy of CIC’s eSettlement Voluntary Best Practices is available to all industry participants by contacting me at 2010@couponinformationcenter.com.

Bud Miller is executive director of the Coupon Information Center.