Do Stores Lose Money When Customers Use Coupons?

Coupons can be a great way to introduce new product lines and encourage customers to try a more cost-effective brand or service.

Coupons

can also help attract existing customers to return to your store. However, the biggest disadvantage of using coupons is that they cost companies money and can generate lower profits from that sale. Companies often use coupons as part of their marketing strategies to inform shoppers about the variety of existing products or seasonal items, and they are willing to pay a certain amount of money in the form of coupons for this purpose.

Manufacturers' coupons (and any coupons issued by the grocer) are sent in plastic bags or bags to the store's corporate headquarters, usually once a week. On the back of most coupons in small print, the manufacturer indicates the mailing address and states that it will also reimburse the store an amount of money for processing them, normally 8 cents per coupon. Stores that do accept competing coupons usually have a rule that the item must be identical to the item in the coupon, and they often limit quantities, meaning that you can't use more than, for example, 10 competitor coupons in a day. Coupons are a form of advertising that stores use to entice you to spend money on something you may or may not have needed. So, do stores lose money when customers use coupons? It's a fair question because it seems like you're hurting the store by not paying the full amount when you use coupons.

The final result is that there's nothing wrong with coupons, especially if you're trying to save money at checkout. While some people are willing to spend 40 hours a week mastering their coupon game hoping to get their money back, save twice as much, or return home with five gallons of generic laundry detergent, others are only looking for discounts when they're ready to make a purchase. Of the hundreds of thousands of coupon brochures that arrive in newspapers every week across the country, the number of coupons that shoppers cut and redeem in stores is about 6 percent. With extreme coupons, people can spend hours and hours trying to find the best coupons and the best deals and leave the store with 10 gallons of laundry detergent at a fraction of the original price. In addition, when you use your ExtraCare card, you'll start receiving personalized coupons that you can print in the store's coupon kiosk.

In a coupon class I recently taught, someone asked if the store is still earning money when a shopper uses a coupon to get a free item. The answer is yes - stores still make money when customers use coupons because they are reimbursed by manufacturers for processing them.