Spiegel.com is getting tough on consumer fraud.
After some customers apparently attempted to submit multiple coupon codes on items intended for only one discount, Spiegel.com, Downers Grove, IL, recently sent them this letter:
“These certificates … clearly state that only one certificate can be applied to an order, and the certificate can be used only once. Your certificates were used in a manner contrary to their stated permissible use.
“In order for a business relationship to continue, it must be mutually fair and beneficial to both parties. This is not the case with our business relationship. Therefore, after careful consideration and review of your ineligible and inappropriate use of the certificates, we regretfully have decided not to process any future orders you may place. Additionally, we have reversed the prior credits which you received on your account, and have set up a temporary charge in the amount of [crossed out].”
The letter, signed by Spiegel's Collection/Recovery Unit, also provided customers with an address for mailing the charge accrued.
The letter was sent to “a small customer base who has excessively used coupon codes,” according to Chris Crockett, public relations manager at Spiegel.com.
The program is just one of the enhancements that Spiegel.com has made to the site over the past few months to combat fraud. This spring the retailer began educating Web and call center associates about checking the value, start/end dates and validity of certificates.
Spiegel sped up the improvements — which Crockett declined to describe — to its online ordering system after monitoring coupon/discount chat rooms, such as those on MyCoupons.com and FatWallet.com.
“Because of the chat rooms, the situation changed for us,” Crockett said. “It helped us prioritize those enhancements and get them up and running sooner.”
By May, Spiegel's call centers were equipped to catch fraudulent coupon orders. A common problem was customers' attempts to use a $10 gift certificate to purchase the Spiegel catalog, which retails for $10 in bookstores. The catalog is a valuable customer acquisition tool, Crockett said, and is not meant to be given away. The $10 gift certificates designed for merchandise.
Ironically, the same message boards that Spiegel monitors are now blasting the retailer for its tougher policy. Some Spiegel customers say they did not realize multiple coupon codes could not be used and should not be required to repay the company.
“If Spiegel hadn't meant for multiple coupon codes to be used, it was their responsibility to make sure that their system didn't allow them when the order was placed,” one customer wrote on MyCoupons.com.
Another customer wrote: “I have a Spiegel charge card and I received the code from Spiegel, and they sent me a 'canceled' e-mail. I will never shop with them again, and I tore up the card.”
A longtime Spiegel customer, who had not received a letter, was upset about the policy, writing on MyCoupons.com: “Once a company accepts an order, and bills that order, and ships that order, it is a completed order. What Spiegel is trying to do now is just so wrong. They have definitely lost me as a customer.”
However, Crockett said Spiegel.com executives do not believe the letter has harmed its customer base.
“People who were sent letters excessively, improperly used our certificates,” she said. “Spiegel customers are very loyal customers. Someone who would deliberately improperly use our certificates is not a loyal customer.”
Although other online retailers are apparently not taking as tough an approach as Spiegel, they have implemented other strategies to catch coupon fraud after experiencing similar problems.
Earlier this year, some iGo.com customers realized the site's shopping cart software was not functioning properly, so they entered the same coupon code multiple times on one order. One customer used so many coupons that his Palm VII, retailing for $499 on the site, was only $10.
Since then, the wireless device/accessories retailer has developed technology limiting the number of coupon codes that can be used on a single order, as well as technology that prevents a coupon from being used if the customer is purchasing sale and overstock items or is coming from a site that already provides a discount.
Via cookies, the site tracks whether a visitor has used a coupon code in the past. “If our site … detects the customer is trying to use a coupon they have already used in the past, it will not be accepted,” said Shannon Oberndorf, director of communications at iGo.com.
In addition, new coupon pop-up boxes at the order screen on iGo.com provide complete instructions on coupon code limitations and restrictions. Shoppers are warned, “this offer cannot be used in conjunction with any other special discount or sale items.”