Tesco's new coupon redemption system is effectively "holding a gun to the manufacturer's head", the Institute of Sales Promotion has warned.

From 15 June, Tesco will destroy redeemed coupons instead of sending them back to suppliers or a third-party clearing house.

The change is part of an upgrade to Tesco's EpoS systems following widespread misuse of coupons last year. Suppliers said they understood Tesco's need to do something but didn't see why the coupons needed to be destroyed.

"If they're putting this service in place because they believe misredemption is rife, they're holding a gun to the manufacturer's head by implicitly saying 'you'll be exposed to misredemption or abuse'," said Peter Kerr, chairman of the ISP's coupon committee and MD of coupon-handling company MRM.

Without the coupons to check, suppliers would have no evidence to challenge misredemption charges, he added. Brands would also lose access to vital consumer information on secondary barcodes.

A Tesco spokesman confirmed it would only supply brands with weekly volume and value data and recommended using data company Dunnhumby, which runs Clubcard, for additional data requests.

Until October, Tesco allowed consumers to redeem money-off coupons regardless of whether the item they were issued for was purchased, and charged suppliers for the value.

The ISP said this was "no different from allowing consumers to shoplift", and cost fmcg companies £50m a year.

The policy changed when online Pedigree Chum coupons were used to buy booze and televisions and the petfood company refused to pay Tesco.

Now, coupons can only be redeemed if the relevant item has been bought. Suppliers can either pay £500 to have coupons checked against the customer's basket automatically, or stick with the current system where coupons are manually checked at the till.

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