Using coupons is a popular way to attract customers and increase sales, but it's important to understand the potential drawbacks before you start offering them. The most obvious disadvantage of coupons is that they cost businesses money, which can lead to lower profits from that sale. Additionally, when customers come to expect coupons, it can cannibalize existing revenues before the coupon program is even implemented. On top of that, coupons put servers at a disadvantage because a smaller check usually means a smaller tip for the same amount of work.
Like other sales promotion tools, coupons have their advantages and disadvantages, so it's important to weigh both before deciding if they're right for your business. One of the main advantages of using coupons is that they can help you reach new customers and increase sales. Coupons are also a great way to reward loyal customers and encourage them to keep coming back. They can also be used to promote new products or services, or to clear out old inventory.
However, there are some potential drawbacks to using coupons as well. For example, if you offer too many coupons, customers may become accustomed to getting discounts and expect them all the time. Additionally, if you don't have an effective system in place for tracking coupon usage, it can be difficult to measure the success of your coupon program. Overall, coupons can be a great way to attract new customers and increase sales, but it's important to understand the potential drawbacks before you start offering them. Make sure you have an effective system in place for tracking coupon usage so you can measure the success of your program and adjust accordingly.