Spiegel battles customers over coupons

The catalog and online retailer sent out notices earlier this month accusing some customers of misusing the coupons and demanding that they pay Spiegel for the value of the coupons they used. Many of the customers used the same coupons to place multiple orders or used the coupons to purchase goods that were equal to or less than the value of the coupons, the company said.

"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," the company said in a letter to one of the customers. "Therefore, after careful consideration and review of your ineligible and inappropriate use of the (coupons), we regretfully have decided not to process any future orders you may place."

Spiegel spokeswoman Chris Crockett said the company wants to recoup some of its lost revenue. Crockett, who declined to say how many letters Spiegel sent or how much money Spiegel lost because of the coupons, said the company isn't worried about losing customers as a result of the letters.

"Spiegel customers are loyal customers," Crockett said. "Someone who deliberately cheats a company is not a loyal customer. We wouldn't expect these people to be around long-term."

The letter touched off angry posts on Internet message boards such as MyCoupons.com, where word of the coupons spread in the first place. Some customers who got the letter demanding the payment say they won't honor the request and are filing formal complaints against the company.

"They have messed with the wrong person," said Laura Williams, a stay-at-home mom in Chattanooga, Tenn., who said she won't pay Spiegel and will never buy anything from the company again. In addition to warning others of Spiegel on online message boards, Williams said she's filed complaints with the Federal Trade Commission and the Better Business Bureau and plans to file one with her state attorney general's office.

Spiegel is only the latest retailer to run into problems with coupons in the Internet age. Intended to target particular customers or to draw in new ones, such coupons are often passed around among bargain hunters on online discussion boards and end up attracting a much larger audience than intended. When combined with other coupons, sales promotions or system glitches, the coupons can spell disaster for inattentive retailers, who can be stuck with the choice of fulfilling thousands of money-losing orders or disappointing thousands of customers.

Earlier this year, bargain hunters exploited a glitch in Macys.com to use multiple coupon codes to get up to 50 percent discounts on their orders. Macys.com refused to honor the orders.

Last year, similar problems hit Buy.com, Staples.com and eZiba.com. Like Macy's, Staples and Buy.com declined to honor the orders.

But Spiegel's response goes further than that of other companies. The retailer, based in Downers Grove, Ill., is one of the first companies burned by a coupon glitch to demand money from customers months after fulfilling the orders and charging their credit cards.

Spiegel became aware of the problem with its coupons recently as it was going through a number of system upgrades at its customer service centers at its Web site, Crockett said. The company is reviewing orders placed over the past six months to detect abuse of the certificates, she said. Crocket blamed the Internet for exacerbating the problem.

"The situation really changed with (coupon) abuse once the chat rooms started talking about them," Crockett said.

But Spiegel customers say the problem lies not in the Internet but with Spiegel itself. Several said that they placed orders using the coupons over the phone through Spiegel's customer-service representatives. The representatives took their orders and confirmed that they could use the coupons on the orders, they said. Many questioned how the company could come back months later and demand money from them.

"I figured (the customer service representative) knew what she was doing because she worked for them," said Jennifer Smith of Mt. Pulaski, Ill. "It seems to me they could have trained their customer-service people a little better."

Spiegel intended that customers only use its coupon one time on one particular order, Crockett said. Although the coupons said that they were for one-time use, they did not have unique code numbers. Instead, the company sent out multiple copies of coupons with the same promotional code, she said.

Comparing notes online at message boards such as MyCoupons.com, a number of Spiegel customers found that they had received the same coupons from Spiegel, said Sharon, a Spiegel customer who declined to give her last name. All told, customers found that there were only about six or seven different code numbers, said Sharon, who lives near Nashville, Tenn., and also received the letter from Spiegel.

Sharon, Williams, Smith and other Spiegel customers said that they had received multiple coupons from Spiegel itself when the company sent them catalogs or merchandise. Although they may have been using the same coupon codes, they were using different physical coupons, they said.

"I don't know what their normal policy is, but if they send out a gift certificate to someone, I can't believe they don't expect you to use it," Sharon said. "I don't think they have a leg to stand on."