Answers for retailers and manufacturers

In a nutshell, coupon clearing is the management of coupon payables and receivables, for both the manufacturers issuing coupons and the retailers accepting them. There are two main types of coupon clearing service: a manufacturer coupon clearinghouse (often called a manufacturer coupon settlement provider, or a manufacturer agent for coupon processing) and a retailer coupon clearinghouse. The service comprises the end-to-end lifecycle of the coupon. Mandlik & Rhodes provides both sides.

Each works for a different party and does a different job, so it is worth being specific about which one is meant:

• A manufacturer coupon clearinghouse acts for the coupon issuer. It receives retailer claims on the manufacturer’s behalf, validates them, invoices the manufacturer, settles with the retailers, provides reporting on offer performance metrics, and maintains a payment audit trail.
• A retailer coupon clearinghouse acts for the store that accepted the coupons. It receives, counts, sorts and invoices those coupons on the store’s behalf, and maintains the shipment and payment audit trails.

The same store can be a counterparty to the first and a customer of the second at the same time. We run both service lines: see Manufacturers and Retailers.

A manufacturer coupon clearinghouse provides two services to a manufacturer: the validation of retailer coupon claims, and the settlement of those claims.

When a shopper redeems a coupon, the retailer discounts the bill and then wants that money back, so it submits a claim (the coupons accepted plus an invoice) to the coupon issuer.

The manufacturer clearinghouse receives those claims on the manufacturer’s behalf and validates both the retailer submitting the claim and the retailer’s submission for any signs of misredemption. That starts with counting the physical claim: the coupons in the shipment are counted and their values totalled against what the invoice says is owed, because an invoice is a statement of what a retailer believes it is due, not proof of it. The clearinghouse then consolidates the retailer claims into a single invoice for the manufacturer, and pays the retailers once that invoice is funded.

A retailer coupon clearinghouse acts for the store that accepted the coupons. A retailer can take in many coupons a month from hundreds of coupon issuers, each requiring its own invoice, and handling that in-house is not practical. Retailers therefore contract a third party, a retailer coupon processor, to receive, count, sort, and invoice those coupons on their behalf. The retailer coupon processor invoices each coupon issuer and provides the audit trail for counts, shipments, and payments. Payment comes back consolidated: one settlement covering the whole shipment, rather than hundreds of separate payments to reconcile and chase.

A coupon passes through both kinds of clearinghouse before anyone is paid. The full journey:

1. Offer creation and registration. The manufacturer designs the offer and its artwork to industry guidelines, using the GS1 DataBar. Barcode orders run from the manufacturer’s own online account with its clearing agent, the offer is registered to the offer master that validation will later run against, and we review a final draft of the coupon and provide boilerplate terms.
2. Distribution. The coupon reaches shoppers by any of a long list of methods: newspaper insert, IRC (an instant redeemable coupon on the pack itself), event hand-out, direct mail, print-at-home, digital (8112 or load-to-card), and more.
3. Redemption. The shopper buys the product and presents the coupon at checkout. The retailer fronts the money for the discount and is now owed reimbursement by the manufacturer.
4. The retailer sends its coupons to its own clearinghouse. The retailer coupon clearinghouse handles this for the store, rather than the store invoicing thousands of issuers itself.
5. The retailer’s clearinghouse counts, sorts and invoices. It sorts the coupons by issuer and creates an invoice for each manufacturer.
6. That invoice reaches the manufacturer’s clearing agent (Mandlik & Rhodes, for the manufacturers we serve). This is where the manufacturer clearinghouse service begins.
7. Receipt and physical processing. Invoice data is entered the day a submission arrives: submitter details, claimed amounts, invoice numbers. Tags are counted against the clearinghouse invoice, the retailer is verified in the database, and submissions are examined for signs of misredemption such as photocopies and gang-cut or gang-torn coupons. Q/A sampling runs at every step.
8. Validation. Coupons are validated against the manufacturer’s offer master. Expiration status is checked, free offers and the amounts written at the register are verified, foreign coupons are detected by their GS1 prefix, and misredemption codes are applied at coupon level. Processed data transmits daily for analysis, where it is reviewed again and compared to each manufacturer’s payment parameters.
9. The consolidated invoice. Weekly, the retailer invoices are batched into one invoice to the manufacturer, with supporting documentation and reporting. The manufacturer’s finance team reviews it and, if it looks good, pays its clearing agent.
10. Settlement. Once the manufacturer’s payment is in, weekly payments go out to the retailers and their clearinghouses, and the retailer’s clearinghouse passes payment on to the stores. Every payment is entered into PARIS℠ so a later dispute can be answered: was the invoice received and paid in full, did payment go out electronically or by check, did the check clear the bank.
11. Retention and destruction. Withheld coupons and invoices are filed by invoice number, expired coupons are held according to client parameters, and foreign coupons go back to the submitter. After six months the coupons are shredded and recycled, with a log and a full affidavit of destruction.

Money flows manufacturer to clearing agent to retailer. The clearinghouse pays retailers with the manufacturer’s money, not its own.

The claimed count and the coupon value need to reconcile: a claim for 10 coupons worth $10.00 means counting 10 coupons whose values total $10.00. Each coupon is validated against the manufacturer’s list of valid offers, held at the manufacturer’s clearinghouse. Paper coupons then get a physical review for signs of misredemption, which is a judgement about whether a coupon was genuinely redeemed by a shopper, not only whether it is authentic.

Digital coupons have no physical review, so validation becomes forensic work on the transaction data submitted with the claim: offer ID, the date and time of each coupon transaction, product UPCs, the purchase requirement, the transaction ID. The checks look for duplicate transactions, whether each claim satisfies the offer’s purchase requirement, and whether the offers being submitted are valid offers.

What is finally paid is the validated claim as the client’s pay policy treats it. Each manufacturer sets its own parameters, and they decide the outcome as much as the coupons do: grace periods after expiration, proof-of-purchase requirements, and what is withheld rather than paid.

Misredemption is dollars claimed that should not be paid, and it takes many forms. Some are obvious once the submission is examined: expired coupons, counterfeit or photocopied coupons, coupons issued for another company, and material submitted in a claim that is not a coupon at all. Others turn on whether a shopper ever redeemed the coupon. If a tear pad sits on a shelf in a store, the retailer should not be able to strip the pad and submit the whole lot as claims, and the coupons themselves tell on the submission. Coupons that genuinely passed through a shopper’s hands and a register do not arrive in mint condition, and neatly gang-cut edges or a mass-torn batch say they never reached a register at all. Control comes from thorough review of incoming submissions, retailer verification procedures, and system fraud-detection tools.

The GS1 DataBar is the barcode standard used on modern coupons. It encodes information about the coupon’s requirements and discount type, including purchase requirements (buy 1, buy 2, BOGO, get 1 free) and the expiration date, which lets the register validate a coupon at the point of sale rather than after the fact. Coupons produced today should be built to this standard.

An 8112 coupon is a universal, single-use digital coupon, validated in real time at the point of sale through The Coupon Bureau rather than checked after the fact. Because each one can only be used once, the format closes off the duplication and copying that paper and print-at-home coupons invite, and retailer acceptance continues to widen. Our platform supports 8112 coupon processing across all client programs.

By submitting a claim to the coupon issuer detailing the coupons accepted, plus an invoice for what is owed. The issuer’s clearinghouse (Mandlik & Rhodes, for the manufacturers we serve) validates that claim, includes it in the consolidated invoice it sends the manufacturer, and pays the retailer once the manufacturer has funded it. An audit trail is kept behind every payment: whether the invoice was received and paid in full, whether payment went out electronically or by check, and whether the check cleared the bank.

We count, sort, and invoice your coupons to all the manufacturers or their agents and send you one check for the entire shipment. We also provide detailed reports, track payments, and assist with recovery of unpaid amounts.

No. There is nothing to pay upfront: a one-time setup fee and any applicable association dues are deducted from settlement rather than billed to you, and both are disclosed before you ship. We accept any size coupon shipment and never charge a penalty for small shipments.

Most of our costs are covered by the handling fees paid by the manufacturers. Anything deducted from your settlement (a one-time setup fee and any applicable association dues) is disclosed before you ship, and we never issue postage or fee chargebacks after payment.

A clearinghouse eliminates sorting hassles, tracks payments across many different manufacturers, maintains an updated shipping database, and handles address changes automatically whenever a manufacturer switches processors or brands.

We have served the coupon industry since 1995, and one out of every ten coupons in the United States is redeemed using our technology and/or services. We’re known for integrity, fraud vigilance, and technology trusted by major manufacturers.

We send you an email notification as soon as your shipment is received and sorted.

Yes. We send email alerts from the Coupon Information Corporation (CIC) to keep you informed about all known counterfeits.

Common reasons include proof-of-purchase requirements, grace period policies, and counting errors. In each case, we provide detailed adjustment documentation and pursue collection efforts on your behalf.

It is not necessary. We will count them when we receive your shipment. We do recommend recording an approximate weight and value on your manifest.

Valid coupons scan accurately at the register and show a current, unexpired date. Reject any coupon that looks copied, blurry, distorted, or altered. The Coupon Information Corporation (CIC) publishes guidance for retailers on this, and its main points are worth repeating:

• Pay special attention to free-product and high-value coupons ($5.00 and up).
• Many free and high-value coupons carry the CIC Security Device, similar to a hologram, over the expiration date.
• There are few, if any, legitimate free-product coupons that can be printed on home equipment.
• Monitor self-scan checkouts closely.
• Check the CIC’s Counterfeit Notifications for the coupons currently circulating as known fakes. The CIC also offers rewards (up to $2,500 under certain circumstances) for information leading to the arrest of a coupon counterfeiter, meaning the person producing the counterfeits rather than someone who, perhaps unwittingly, uses one.

The full list is on the CIC’s site: Tips to Help You Fight Counterfeit Coupons.

Yes. You may then contact the manufacturer’s sales representative to recover money for those coupons where applicable.