Did Best Buy Coupon Take Merged Channel Too Far, Or Not Far Enough?

Best Buy's $50-off fiasco this week is a reminder of a simple fact of merged-channel retail: A little technology usually isn't enough. According to The Consumerist, early on Monday (Jan. 21), Best Buy E-mailed a coupon to some customers, offering $50 off most purchases of $100 or more if the customer paid by MasterCard, with the discount good for a week. Word quickly spread on bargain-hunter Web sites, and soon customers were online, reporting their successes ($2,500 in Amazon giftcards for $1,250) and failures (one store manager insisted it must be a hoax). By Monday afternoon, Best Buy had pulled the plug on the offer.

Automating coupon-based offers is fine. But if you're going to Internet-up paper-style coupons, you really have to go all the way. And these pretty clearly were conceived as paper coupons. One clue comes in the boilerplate on the coupon, which had relatively few restrictions on products that could be bought (no Apple, Sony or Nikon) but also specified the coupon was good in-store only. It also sported classic paper-coupon language, including "No copies."

No copies? That's actually possible in an E-mailed coupon, but only if every coupon is individualized with the customer's loyalty account number (the loyalty program is presumably how Best Buy picked the E-mail addresses that originally got the coupons). Then it's effectively the high-tech version of a paper coupon, and conditions like "no copying" (or at least "one coupon per loyalty card account") make sense. It effectively replicates the physical limitations of the traditional paper coupon.

But without that type of personalization, a no-copies rule is impossible to enforce. Anyone can print and use as many coupons as he likes, and he can spread the joy to the rest of the Internet. And, naturally, when every bargain hunter on the Internet ("valued Best Buy customer" or not) takes advantage of the deal, the chain takes a bath (one that Best Buy really can't afford) and the promotion is a fiasco.

The irony is that this was probably a clever cross-channel promotional idea when it started. It's a flash deal, delivered without warning to select customers, by E-mail for in-store use. That's great use of merged-channel technology. And that short list of restrictions? Probably OK for loyalty customers, especially if Best Buy controlled exactly how many $50-off coupons at most could be redeemed.

But Best Buy didn't use the technology that made such control possible. As a result, Best Buy was forced to issue this rather embarrassing message: "Promotional Offer was sent out with incorrect product inclusions, product exclusions, single product call out and end date. An ad correction is available in our retail stores, where you can see a Sales Consultant or Customer Service for any questions or to view a list of the included and excluded products."

The result? Bargain hunters drove trucks through the deal's loopholes—and the primo customers who were supposed to be rewarded with the coupons will probably still be walking into Best Buy for the next few days, only to be told they're out of luck. We're pretty sure that's not the effect Best Buy was looking for.