All digital coupons would have to be applied automatically under new laws

The discussion around digital coupon discrimination has sparked a range of proposed solutions. These include the introduction of in-store digital coupon kiosks, providing assistance through customer service representatives, and expanding internet access to those who are digitally-disconnected.

One proposed solution is to offer coupon discounts to everyone, regardless of whether they actively seek them out or not.

New Jersey took the lead in exploring the possibility of requiring enhanced availability of digital coupons last year. They engaged in discussions regarding a bill that, unfortunately, did not receive approval. However, this initiative has sparked interest among lawmakers in three other states, namely New York, Illinois, and Rhode Island. These states have recently put forth legislation that mirrors New Jersey’s initial proposal.

Lawmakers in Massachusetts and Washington state have taken more extensive measures compared to New Jersey. Rather than just requiring stores to provide an “in-store alternative of identical value” alongside digital coupons, they are proposing a system where all digital coupons are automatically applied to shoppers’ purchases.

During public hearings this week, Democratic state representative Jeffrey Rosario Turco advocated for his bill in Massachusetts. The bill aims to make it mandatory for grocery stores to automatically apply digital coupons to purchases made by senior citizens and other loyalty program members, upon request.

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The bill states that any store that provides digital coupons must apply those coupons to purchases made by buyers who are 65 years old or older, as long as they present a valid government-issued photo identification. Additionally, if a consumer has a store card, they can inquire with a store cashier or customer service representative about the availability of digital coupons. If the store does offer digital coupons, all available coupons will be applied to the consumer’s purchase.

State Representative Turco, while presenting his bill to the Joint Committee on Consumer Protection and Professional Licensure, expressed his primary objective of ensuring that senior citizens are not left behind. He emphasized that seniors who still use flip phones instead of smartphones face difficulties in signing up for various programs and may miss out on accessing coupons that are readily available to smartphone users. Turco’s proposed solution aims to address this issue by allowing senior citizens to provide proof of their age, after which the coupons in the digital queue would be automatically made available to them.

He chose not to discuss the remaining portion of his bill, which would also “automatically provide” digital coupons to any loyalty card holders who inquire about the store’s digital coupon offerings.

On Tuesday, Washington state lawmakers discussed a bill that goes even further. Democratic state Senator Steve Conway introduced a proposal titled “Protecting a consumer’s right to coupon and sale prices offered by grocery stores.” The bill states that grocery establishments must honor any coupons or reduced sales prices that are displayed in the store or offered through electronic means, even if the consumer has not subscribed to the electronic medium. This ensures that consumers are able to take advantage of discounts and savings at the time of purchase.

In simpler terms, there’s no need for you to be a part of a loyalty program or go through the hassle of browsing or clipping digital coupons. All you have to do is visit the store, purchase your groceries, and if there are any digital coupons applicable to your purchases, the discounts will be automatically applied.

According to Conway, it is unfair that seniors, poor individuals, and others who cannot access the internet are unable to take advantage of these discounts. He expressed his concern during a meeting with the Senate Committee on Labor and Commerce, stating that requiring online access for these discounts is discriminatory. Conway believes that this issue is a matter of fairness.

He also did not address the specific wording of his bill, which, as it is currently written, would apply to all individuals and not just senior citizens.

However, retail industry representatives expressed their opposition during the committee hearing. According to Brandon Houskeeper, a representative from the Northwest Grocery Association, digital coupons are just one of the many programs that stores offer to assist customers in saving money. He emphasized that they cannot endorse a mandate that dictates how these marketing opportunities should be implemented across all platforms.

According to Katie Beeson, a representative from the Washington Food Industry Association, many coupons come directly from the manufacturer. Therefore, for retailers to receive reimbursement, they need to ensure that digital coupons are clipped and linked to a customer’s account, rather than simply being honored at the register upon the customer’s request. Beeson questions whether this aspect was thoroughly considered when introducing this approach.

Houskeeper also emphasized the importance of addressing any individual consumer issues promptly. He stated, “When we hear about these isolated problems where someone approaches us with access issues, we collaborate with the customer to resolve and rectify the situation.” He further advised customers to bring the lack of access to the store’s attention while being aware of the discount, as the store would honor those discounts.

“I’m not convinced that’s true,” countered Conway. “In the stores I’ve been to, I haven’t seen any signs or notices at the checkout counter informing customers that they can seek assistance by simply engaging with the staff. It’s simply not there.”

The digital discrimination debate has evolved over the past year and a half, as evidenced by the two bills. Initially, the focus was on honoring advertised sale prices exclusively available online and automatically applying digital manufacturer’s coupons to all purchases. Edgar Dworsky, the founder of Consumer World, raised awareness about this digital divide in June 2022. At the time, he highlighted how stores’ printed weekly circulars advertised enticingly low prices that required online activation and loading to a loyalty account. Dworsky criticized this tactic as a clever ploy by supermarket chains to entice customers into the store, knowing that some would end up paying more than the advertised price. He called on stores to provide an in-store activation option for those who were digitally-disconnected and unable to access these deals from home.

When state lawmakers started addressing the issue, they started treating “digital deals” as the same as “digital coupons.” Consequently, their proposed solutions shifted from ensuring equal access to aiming for equal outcomes. However, when opponents of New Jersey’s bill testified last month that coupons are not designed to establish a universal price for a product and that granting them to everyone would likely lead to lower coupon values overall, the bill’s sponsor dismissed their concerns, stating, “That’s the consequence of making it democratic and giving it to everyone.”

Both the Massachusetts and Washington bills are currently being debated and discussed before potentially being voted on in their respective legislative sessions. It is possible that these bills may undergo revisions as well. Just like how New Jersey’s initial bill was revised to allow for an “in-store alternative” to digital coupons instead of a paper coupon, the Massachusetts and Washington bills may also be narrowed down to only apply to shoppers who have digital access but choose not to clip digital coupons.

The bills might not be revised and could pass as they are, potentially becoming law unchanged. The concept of digital coupons, which eliminates the need for physical clipping and offers automatic discounts, is likely to attract a considerable number of shoppers. Imagine every cashier having a collection of neatly-clipped newspaper insert coupons and scanning the ones that are relevant to your purchases. It’s an appealing idea that any shopper would appreciate.

Coupon issuers argue that this is not how coupons are intended to function. They are meant to encourage consumers to purchase a product, rather than rewarding them for buying something they would have purchased regardless of a discount. If brands can’t rely on coupons to incentivize purchases, they may choose to stop offering them altogether and require everyone to pay the full price.

Lawmaker Steve Conway acknowledges that his bill is not unique and that several other states have been considering similar legislation. He emphasizes the importance of collaboration and hopes to achieve a positive outcome by working together with his colleagues.

As more states consider legislation related to coupons, the outcome becomes increasingly uncertain. With more lawmakers getting involved without a full understanding of how coupons work, the ease of couponing may be compromised. It’s important to be cautious about wishing for effortless couponing as the situation becomes more complex.

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