How Do Coupons Work?
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How Do Coupons Work?

Posted on Tuesday, April 5th, 2016 at 1:21 pm
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Have you ever wondered why a store is able to give you a discount when you use a coupon? We all love using coupons because they can save us some money. Extreme couponers excel at using coupons in ways that give them the most savings. Have you ever wondered how coupons work? Where do they come from? Who is paying for the discount that the coupon gives to you?

How Do Coupons Work?

Coupons come from companies that are food manufacturers. The company decides when it wants to offer a coupon and how much of a discount that coupon will give a consumer. The company also decides when the coupon’s expiration date will be.

A company that offers a coupon on one of their products gets to choose who to offer that coupon to. They might limit it to only the people who have signed up to get emails from the company. Some coupons are only available to people who live in a certain state (or a particular zip code). Many coupons are offered nationally.

Once all these details have been worked out, the food manufacturer needs to connect with a retailer (like a grocery store). Together, the two work out what could be called an implied contract. The contract is a promise made by the food manufacturer to the retailer.

The food manufacturer promises to reimburse the retailer for the discount that is offered on their coupons – if the retailer sends those used coupons back to the food manufacturer. The postage fee is paid for by the food manufacturer, not the retailer.

This is a key point to understand. A grocery store (or other retailer) loses money when a customer uses a coupon. The retailer is ok with this because they know they can be reimbursed for that loss by the manufacturer that created the coupon.

How does the retailer let the food manufacturer know how many coupons were used in their store? First, the cashier scans the coupon when the customer makes a purchase. Doing so automatically enters the coupon into the store’s computer. The coupon goes into the drawer of the register.

When the cashier’s shift is over, his or her drawer is tallied up to make sure the amount of money and coupons that are in the drawer match what the computer counted. The coupons get sent back to the food manufacturer, and the retailer receives a reimbursement.

The food manufacturer can choose not to reimburse the retailer if the coupon was used after it had expired. They do not reimburse the store for fake coupons. This is why many stores are very picky about what coupons they will accept from customers. The retailer needs to make sure they will be reimbursed for the discount that a coupon gives to a consumer.

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