Coupon clearing system clears first hurdles

AURORA, Colo. -- In Store Media Systems Inc. has begun a pilot of its Coupon Bank electronic coupon clearing system. The Internet solutions company installed its Coupon Bank System (CBS) in four Bi-Lo Inc. supermarkets in Greenville, S.C. Bi-Lo Inc. is a division of Ahold USA Inc., the third largest U.S. supermarket chain.

The four-store rollout is a demonstration of the system's effectiveness in reducing costs and workload in Bi-Lo stores. Following the demonstration period, Bi-Lo may choose to install CBS systems in its other 284 stores.

The initial CBS units were produced by Kiosk Information Systems and purchased for cash by In Store Media Systems. To aid in coupon processing, In Store Capital LLC provided a financing facility that allows ISMS to promptly reimburse Bi-Lo for coupons redeemed at each of the four stores.

The CBS units reduce coupon processing time from more than six weeks to approximately 24 hours. Retailers are potentially freed from the tasks of coupon handling. Prompt reimbursement may return to retail chains millions of dollars tied up in coupon receivables.

The system also allows manufacturers to quickly receive reports which match the redeemed coupons to daily purchases of the designated products. Brand managers can then adjust coupon promotions that are ineffective or going over budget. Currently, manufacturers must wait months to receive only general coupon promotion results.

In addition, the CBS can sharply reduce coupon misredemption and fraud, a persistent $500 million-a-year problem for manufacturers and retailers alike.

CBS is a proprietary system and will be produced and operated by ISMS.