1. Family Codes for Retailers
Ralph Maresco, Inmar, Presenter
Amber Shew, Inmar, Presenter
John Morgan, ACP, Host

2. Agenda What are Family Codes? How do they work?
The Misredemption & Fraud Problem
How Social Media Exacerbates the Problem
Retailer Benefits Validating Family Codes & GS1 DataBar
Manufacturer Accuracy
Risks of not following best practices in current environment
Retailer Best practices
Family Codes
GS1 Databar
Front end policies
Cashier and Supervisor intervention
Questions & Answers

3. Coupon Components Work Together
What are Family Codes?
Coupon Components Work Together
Printed wording and product artwork
Direct the consumer
Coupon DataBar
Relays purchase requirements to POS
Retailer’s POS system
Validates the encoded requirements against the consumer’s purchase.
GS1 DataBar provides the qualifying GS1 Company Prefix (GCP) and family code
POS matches the GCP and family code from the coupon DataBar to their system’s product family code table.

4. Family Codes 101 - Refresher
What are Family Codes?
Family Codes Refresher
3-digit number that identifies a product or family of products
Assigned by MFRs based on how they
want to issue coupons
Resides within:
MFR’s family code table
The coupon barcode
Retailer POS systems

5. What are Family Codes? Distribution Process
Manufacturers are responsible for communicating their family codes to retailers.
Family code structures should contain:
Product descriptions
Product GTIN’s (UPC-12 or EAN-13 code)
Assigned family codes
Retailers may elect to receive family codes directly from the manufacturer or through authorized 3rd parties.
Retailers update their POS systems with the manufacturer assigned family codes.

6. The Family Code Hierarchy
What are Family Codes?
The Family Code Hierarchy
Universal Code
000
ALL PRODUCTS with GCP
100 Coffee
200 Tea
Super Summary
210 Tea Bags
120 K-Cups®
220 Drink Mixes
110 Ground Coffee
Summary
Universal Code Validates any item (GTIN) that contains the corresponding GS1 Company Prefix (GCP)
Super Summary Codes
10 numbers are super summaries (i.e. 100, 200, 300, etc.)
Includes all family codes ending in “00”
Allows coupon validation of more than 1 product
Validates any items whose family codes have the same first digit
Are not to be used for individual products
Summary Codes
Includes all codes whose last digit ends in “0” (i.e. 110,120,450, 720, etc)
Validates any items whose family codes have the same first 2 digits
Family Codes
Includes all codes ending in numbers “1-9” (i.e. 111, 235, 563)
Allows validation for specific products
211 Regular
212 Decaffeinated
221 Single Serving Packs
oz. Bottles
111 Regular
112 Decaffeinated
Cup Packs
Cup Packs
Family Code

7. Family Code Table Example
What are Family Codes?
Family Code Table Example
Example of the data included in a family code structure.
Family Code = Current family code assigned to product
Old Family Code = Previously assigned family code. An update has been made and the product now has a new family code assignment.
Product Description = Description of the item
Product UPC’s = Product’s GTIN.

8. Application of Family Code Hierarchy
What are Family Codes?
Application of Family Code Hierarchy
Application Formula
Company Prefix + Family Code = Product UPC
(GCP) (FC) 112 =
Only Decaffeinated Coffees
Family Code
(GCP) (FC) 110 =
Any Ground Coffee
Summary Code
(GCP) (FC) 100 =
Any Carolina Coffee
Super Summary Code
(GCP) (FC) 000 =
All Products with Company Prefix
Universal Code

9. Paper Coupons dying a very slow death…
Misredemption & Fraud
Paper Coupons dying a very slow death…
Paper Coupons:
~98% of coupons distributed
>90% of coupons redeemed
FSCI (Sunday paper) coupons:
>50% of total redemptions
Only declining 1-2% per year
So we need to find solutions to issues driving paper coupon mis-redemption and fraud

10. Background The GS1 Coupon Databar debuted in 2007
Misredemption & Fraud
Background
The GS1 Coupon Databar debuted in 2007
Advantages vs. old UPC/EAN barcodes:
1) Enables validation at family code level
2) GS1 not human-readable
(a subject for another day slide!)

11. Misredemption & Fraud
“Some coupons are coded to give you a discount off your purchase of any item in the store!”
“The bar code does not require you to purchase the item described on the coupon. You do not even need to purchase an item from the manufacturer listed on the coupon.”
“QSeer tells you what products are required according to the coupon’s barcoding. What you do with that information is up to you!” (Wink, wink)
“As with any product, there are a small percentage of users who navigate to a usage that is unintended and inappropriate…”
“The fact that some write bad checks doesn’t condemn check printers, or that some assaults are made with hammers doesn’t mean that Home Depot should stop selling those important tools.”

12. Misredemption & Fraud
Problem Statement
Almost 10 years after GS1 adoption, many retailers still not scanning/ validating to the family code level

13. The “Real” Problem Statement
Misredemption & Fraud
The “Real” Problem Statement
Paper coupon fraud and mis-redemption could be as much as $1 Billion annually!

14. Why don’t some retailers validate coupons at family code?
Misredemption & Fraud
Why don’t some retailers validate coupons at family code?
Belief that many CPGs’ family code tables are inaccurate
Belief that CPGs will pay for all coupons submitted since they don’t know the underlying item purchased
Company-level validation ensures most coupons will scan:
1) Fewer cashier interventions/conflicts
2) Check-Out lines move faster

15. The Problem is Getting Worse due to Social Media!
Misredemption & Fraud
The Problem is Getting Worse due to Social Media!
Facebook – Closed and Secret Groups
Instagram
More to come…

16. Misredemption & Fraud

17. Social Media  Coupon Fraud
Misredemption & Fraud
Social Media  Coupon Fraud
Social Media discussions driving coupon “glitchers” to retailers who only validate at Company-level
“How to mis-redeem coupons” discussions shared with tens of thousands of members inside a Facebook group

18. Social Media  Coupon Fraud
Misredemption & Fraud
Social Media  Coupon Fraud
Those posting this content typically:
1) Don’t believe this activity is a crime
(or if they know, they don’t care!)
2) Don’t fully understand retailer POS validation, how family codes work, etc.

19. A Typical Social Media Thread:
Misredemption & Fraud
A Typical Social Media Thread:
“What products can I use the $5 Swiffer coupon on?”
“Dawn, Bounty, Charmin…anything with a code!”
“At which stores…?”
“XXXXX, YYYYY, ZZZZZ, etc.”
“What about Walmart?”
“It won’t work at Walmart; they changed their system!”
Or: “DG caught on and started saying NO!”

20. Do people really post pictures of this…YES!
Misredemption & Fraud
Do people really post pictures of this…YES!

21. Do people really post receipts of this…YES!
Misredemption & Fraud
Do people really post receipts of this…YES!

22. Misredemption & Fraud
How bad is the problem?
Coupon mis-redemption rises with higher coupon values…

23. What is P&G doing about this?
Two major interventions in the past year
Coupon payment denials for:
1) Coupons redeemed for items
the retailer doesn’t carry
2) Coupons redeemed in
excess of units sold (CRIES)

24. How does “CRIES” work? P&G drops $5 coupon with 2-week expiry
Misredemption & Fraud
How does “CRIES” work?
P&G drops $5 coupon with 2-week expiry
Retailer X:
1) redeems 50,000 coupons
2) sells 10,000 units of promoted product
Adjustment: (at least) 40,000 coupons over-redeemed x $5.00 = $200,000

25. The Retailer Landscape is changing…
Retailer Benefits of Validating Family Codes & GS1 DataBar
The Retailer Landscape is changing…
Estimated % of total coupon volume redeeming at the family code level:
3 Years ago : ~20-25%
1 Year ago: ~40-50%
Next 3-6 Months: up to 80%? 

26. Recommendations – For Manufacturers
Manufacturer Accuracy
Recommendations – For Manufacturers
Ensure your Family Code structure and tables are accurate!
Who maintains your Family Code tables?
How often do you update your tables?
How complex are your tables?

27. Family Code Accuracy Today’s Reality
Manufacturer Accuracy
Family Code Accuracy Today’s Reality
Accuracy reported as high as 99.8%
Retailers scanning to this level has tripled in last 4 years
If errors detected on live offer, can back-end fix with use of second family code

28. Manufacturer Accuracy Considerations & Best Practices
Ongoing Communication is critical
Make sure everyone internally has up-to-date structure(s)
Ongoing immediate notification of new item releases
Discontinued items - product shelf life usually determines timeframe for removal. When in doubt include.
Modifying family codes
Can be done but not recommended frequently
Most retailers store immediate “previous” family code, but some may only validate the current
Consider DataBar flexibility – up to 3 family codes can be used
Keep in mind retailer validation levels still vary

29. For the Retailers NOT validating to family code level…
Risk
For the Retailers NOT validating to family code level…
The “coupon fraudsters” will figure things out
Updates will be shared on social media and the fraudsters will head to your stores
This group of people is generally bad for business – both the retailer and the CPG

30. Why “Coupon Fraudsters” are bad for business…
Risk
Why “Coupon Fraudsters” are bad for business…
Argue for cashier overrides for any coupons that don’t scan
Create a scene at check-out that is bad for other shoppers to see
Slow down the check-out line – not only by arguing with the cashier, but simply due to the fact that they will hand in a fistful of coupons that have to be scanned

31. Continued: Why “Coupon Fraudsters” are bad for business…
Risk
Continued: Why “Coupon Fraudsters” are bad for business…
Return the products they purchased with coupons at a later time, especially if retailer policy refunds full value of the item
If they intentionally mis-redeem coupons, they are also likely to do other fraudulent activities in your store, such as shoplifting
Refuse to pay full price and will likely only “cherry-pick” your deals

32. Risk
Don’t believe me!!!??? Perhaps you’d like to buy a t-shirt with this logo on the front 

33. Recommendations – For Retailers
Retailer Best Practices
Recommendations – For Retailers
Full scan/validation of the GS1 Databar
Validate to the Family Code level; not MIN/Company Prefix
Recognize that Family Code accuracy has greatly improved over the past few years

34. Are there alternatives? Yes!
Retailer Best Practices
Are there alternatives? Yes!

35. Retailer Best Practices
Alternative Option for Manufacturers: Purchase a new MIN/Company Prefix
When should this be considered?
When you want to issue high-value coupons on premium-priced items
When the MIN of these premium-priced items is shared with lower-priced items
If you’re willing to incur the costs and issues associated with a hard conversion

36. The Crest White Strips Story
Case Study
The Crest White Strips Story
Premium-priced item
High-value coupons drive merchandising
Coupon Mis-Redemption extremely high
Social Media accelerating the level of Mis-Redemption

37. Over-Redemption Example:
Case Study
Crest White Strips
Over-Redemption Example:
“$5 off 1” coupon -- July, 2015
Retailer moved 10,000 units of this item nationally during 2-week offer period
They redeemed 50,000 coupons (coupon scans on any of the items shown to the right)
Overpayment: >40,000 x $5 = >$200K

38. Crest Brand Purchased New Company Prefix for Crest Whitestrips (CWS)
Case Study
Crest Brand Purchased New Company Prefix for Crest Whitestrips (CWS)
Former (P&G legacy) MIN =
New CWS MIN =
First “New MIN” coupon dropped on 11/1/2015
Significant reduction in mis-redemption
P&G reached out to media (CITN) to publicize and explain the change

39. Case Study
Headline: ”Glitchers in Mourning: Crest Whitestrips Coupons Now Only Work on Crest Whitestrips”
P&G’s Statement: “P&G’s objective is to ensure that the coupons we issue are used on the products for which they are intended…coupon misredemption is a growing issue across the industry and this is just one of many steps we are taking to rectify the situation.”

40. Case Study

41. Alternative Option for Retailers: POS Interventions/Parameters
Retailer Best Practices
Alternative Option for Retailers: POS Interventions/Parameters
Controls on cashier overrides
Manager intervention required
Some level of validation beyond MIN

42. Examples of POS Parameters:
Retailer Best Practices
Examples of POS Parameters:
1) Number of coupons can’t exceed number of items in basket for a specific MIN 2) Sum of MFR coupon value can’t exceed value of items purchased 3) Single MFR coupon can’t be higher than value of items in basket

43. Retailer Best Practices
1) Number of coupons can’t exceed number of items in basket for a specific MIN
Shopper purchases 3 P&G products
(Bottle of Dawn, Box of Puffs, Roll of Bounty)
Shopper attempts to redeem 4 P&G coupons
4th coupon triggers manager intervention

44. 2) Sum of MFR coupon value can’t exceed value of items purchased
Retailer Best Practices
2) Sum of MFR coupon value can’t exceed value of items purchased
Shopper purchases 3 P&G products
(bottle of Dawn, box of Puffs, roll of Bounty)
Total retail value = $6.00
Shopper attempts to redeem 3 P&G coupons
Total Coupon value = $7.00
3rd coupon triggers manager intervention

45. 3) Single MFR coupon can’t be higher than value of items in basket
Retailer Best Practices
3) Single MFR coupon can’t be higher than value of items in basket
Shopper purchases 3 P&G products
(bottle of Dawn, box of Puffs, roll of Bounty)
Each item is $2.00; total retail value = $6.00
Shopper attempts to redeem $5.00 P&G coupon
$5.00 coupon triggers manager intervention

46. Other/Simpler POS Options
Retailer Best Practices
Other/Simpler POS Options
No >2 coupon overrides per transaction
No overrides for coupons $3.00 or higher
Manager intervention after the 10th coupon
Family code validate “high-value” coupons only
Family code validate for those Manufacturers whose family code tables are “reliable”

47. In general, limiting/controlling cashier overrides is a good idea
Retailer Best Practices
In general, limiting/controlling cashier overrides is a good idea
Cashier overrides enable…

48. Egregious Coupon Mis-Redemption…
Risk
Egregious Coupon Mis-Redemption…

49. Risk
Gang cuts and tears, mint condition and violation of “4 like coupons per day” policy

50. Gang-cuts of high-value offers are biggest issue…
Risk
Gang-cuts of high-value offers are biggest issue…

51. And the activity on the previous slide is enabled by this…
Risk
And the activity on the previous slide is enabled by this…

52. In Summary…
Paper coupon fraud and mis-redemption represents up to a $1 Billion industry problem
Most can be eliminated if both sides collaborate
There is more than just a “one size fits all” solution (although we fully support family code!)
We are all partners in the war on…Drugs Crime Coupon Fraud!!!

53. Questions & Answers

54. Contact Information
Ralph Maresco – x2101 Amber Shew – John Morgan –