Coupon
Encyclopedia
In marketing
, a coupon is a ticket or document that can be exchanged for a financial discount
or rebate
when purchasing a product
. Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in retail
stores as a part of sales promotion
s. They are often widely distributed through mail, magazines, newspaper
s, the Internet
, directly from the retailer, and mobile devices such as cell phones. Since only price conscious consumers are likely to spend the time to claim the savings, coupons function as a form of price discrimination
, enabling retailers to offer a lower price only to those consumers who would otherwise go elsewhere. In addition, coupons can also be targeted selectively to regional markets in which price competition is great.
In government
, a coupon is a paper certificate used to administer a benefit or permission.
including having the company's employees and sales representatives distribute complimentary coupons for Coca-Cola. Coupons were mailed to potential customers and placed in magazine
s. The company gave soda fountain
s free syrup to cover the costs of the free drinks. It is estimated that between 1894 and 1913 one in nine Americans had received a free Coca-Cola, for a total of 8,500,000 free drinks. By 1895 Candler announced to shareholder
s that Coca-Cola was served in every state in the United States.
conceived the idea to help sell breakfast cereals and other products. Today, more than 2,800 consumer packaged goods companies offer coupons for discounts on products. In 2010, coupon transactions for consumer packaged goods amounted to 3.7 billion dollars within the U.S.
1888 – Asa Candler used paper tickets for free glasses of Coke to help market his new soda
1909 – C.W. Post used 1 cent coupons to start marketing Grape Nuts breakfast
1930 – Coupon usage grows dramatically during the great depression
1940 – Big chain grocery stores begin to use coupons to attract consumers away from purchasing at local markets
1957 – Nielsen Coupon Clearing House was created to be devoted entirely to coupon redemption
1965 – Half of all the families in the United States begin cutting coupons
1990 – The invention of the internet leads to the downloaded printable coupon and online coupons
1992 – The last year coupon usage is on the rise for the next 17 years
2002 – Americans saved $3.8 billion shopping with coupons
2009 – The U.S. government uses coupons to promote converter box sales for the digital television transition
of a certain newspaper for example, as many people who have discovered the savings they can do with these coupons, tend to buy more than just one copy of that newspaper or magazine.
Some grocery stores double the value of a grocery, especially for products that normally are not very well sold.
or at risk of living in poverty. According to the statistics, 19% of people under 18 years, 11.7% among people 18 to 64 years and 9.7% for people ages 65 and older were in 2008 living in poverty in the United States. According to the U.S. Census, over 39 million people were living in poverty in the United States, in 2008 which gets the total poverty rate to 13.2%. On the other hand there are many social programs intended to help these people and whereas some of them provide cash
payments for a certain number of hours worked in various activities, most of these programs provide welfare coupons that come mostly as grocery coupons.
The welfare coupons are intended to help people with very low income
s to be able to partially satisfy their nourish needs. One of the most popular programs that provide food vouchers to a certain category of people is Women, Infants, and Children (WIC
). The program is limited to pregnant women and children under 5 years old and the grocery coupons may be used to buy certain products such as cheese
, milk
, eggs
, and some breakfast cereals.
Fundraising
companies may also provide welfare coupons for people who are willing to donate certain amounts of money or to adopt animals. These welfare coupons may come as discount coupons for various products or for buying food for the adopted animal.
Many retailers and companies use verification methods such as unique barcodes, coupon ID numbers, holographic seals, and watermarked paper as protection from unauthorized copying or use.
Other than newspaper, there are also coupon book publishers and retailers who compile vouchers and coupons into books, either for sale or free.
to purchase specific products or to purchase from specific retailers. Because paper coupons would be difficult to redeem, typically secret words or codes are distributed for consumers to type in at checkout. Marketers can use different codes for different channels our groups in order to distinguish response rates.
or MMS
, or other mobile means. The customer redeems the coupon at store or online. In some cases customer redeems the mobile coupon at store; some retailers forward the redemption to a clearinghouse for final processing. What's unique about mobile coupons is the memory of information in the coupons often outlast the expiry dates of the coupons themselves, triggering actual purchases at later dates (Banerjee,Poddar,Yancey,McDowell 2011). Researchers suspect it's driven by the engagement generated by the mobile device.
, coupons may or may not reduce the sales tax
which must be paid by the consumer. This is often determined by who sponsors the coupon. If the coupon is issued by the retailer, the product was never offered at the original price and the coupon represents a reduction in the amount paid and the tax. If the coupon is issued by the manufacturer, the original price is still paid but some of the price is covered by the manufacturer instead of the consumer and the full price remains taxable. This is the case with the coupon-eligible converter box
es in the U.S., which compensate in part for the forced conversion to digital TV
.
Mobile coupons have become very popular among US fast-food customers.The primary success factors for the SMS campaigns are discount size, how the discount value is framed (as a gift or percent off) and the timing of the campaign (Banerjee and Yancey, 2010), among many others.
Often coupons are available for purchase at some online sites, but since most coupons are not allowed to be sold, the fee is considered to be for the time and effort put into cutting out the coupons.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
, a coupon is a ticket or document that can be exchanged for a financial discount
Discounts and allowances
Discounts and allowances are reductions to a basic price of goods or services.They can occur anywhere in the distribution channel, modifying either the manufacturer's list price , the retail price , or the list price Discounts and allowances are reductions to a basic price of goods or services.They...
or rebate
Rebate (marketing)
A rebate is an amount paid by way of reduction, return, or refund on what has already been paid or contributed. It is a type of sales promotion marketers use primarily as incentives or supplements to product sales. The mail-in rebate is the most common...
when purchasing a product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
. Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in retail
Retail
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
stores as a part of sales promotion
Sales promotion
Sales promotion is one of the four aspects of promotional mix. Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability...
s. They are often widely distributed through mail, magazines, newspaper
Newspaper
A newspaper is a scheduled publication containing news of current events, informative articles, diverse features and advertising. It usually is printed on relatively inexpensive, low-grade paper such as newsprint. By 2007, there were 6580 daily newspapers in the world selling 395 million copies a...
s, the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
, directly from the retailer, and mobile devices such as cell phones. Since only price conscious consumers are likely to spend the time to claim the savings, coupons function as a form of price discrimination
Price discrimination
Price discrimination or price differentiation exists when sales of identical goods or services are transacted at different prices from the same provider...
, enabling retailers to offer a lower price only to those consumers who would otherwise go elsewhere. In addition, coupons can also be targeted selectively to regional markets in which price competition is great.
In government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
, a coupon is a paper certificate used to administer a benefit or permission.
Pronunciation
The word is of French origin, pronounced kuˈpɔ̃. In Britain and Canada it is pronounced ˈ . A common alternate American pronunciation is ˈ . Another increasingly popular term of pronunciation is ˈ . This is especially prevalent in the Southern United States.Origin
In 1887, the Coca-Cola Company was incorporated with Asa Candler as one of the partners. He transformed Coca-Cola from an insignificant tonic into a profitable business by using innovative advertising techniques. The key to this growth was Candler's ingenious marketingMarketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
including having the company's employees and sales representatives distribute complimentary coupons for Coca-Cola. Coupons were mailed to potential customers and placed in magazine
Magazine
Magazines, periodicals, glossies or serials are publications, generally published on a regular schedule, containing a variety of articles. They are generally financed by advertising, by a purchase price, by pre-paid magazine subscriptions, or all three...
s. The company gave soda fountain
Soda fountain
A soda fountain is a device that dispenses carbonated drinks. They can be found in restaurants, concession stands and other locations such as convenience stores...
s free syrup to cover the costs of the free drinks. It is estimated that between 1894 and 1913 one in nine Americans had received a free Coca-Cola, for a total of 8,500,000 free drinks. By 1895 Candler announced to shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
s that Coca-Cola was served in every state in the United States.
Widespread use
Coupons first saw widespread use in the United States in 1909 when C. W. PostC. W. Post
Charles William Post , also known as C.W. Post, was an American breakfast cereal and foods manufacturer and a pioneer in the prepared-food industry.-Biography:...
conceived the idea to help sell breakfast cereals and other products. Today, more than 2,800 consumer packaged goods companies offer coupons for discounts on products. In 2010, coupon transactions for consumer packaged goods amounted to 3.7 billion dollars within the U.S.
Timeline
A timeline for the history of coupons:1888 – Asa Candler used paper tickets for free glasses of Coke to help market his new soda
1909 – C.W. Post used 1 cent coupons to start marketing Grape Nuts breakfast
1930 – Coupon usage grows dramatically during the great depression
1940 – Big chain grocery stores begin to use coupons to attract consumers away from purchasing at local markets
1957 – Nielsen Coupon Clearing House was created to be devoted entirely to coupon redemption
1965 – Half of all the families in the United States begin cutting coupons
1990 – The invention of the internet leads to the downloaded printable coupon and online coupons
1992 – The last year coupon usage is on the rise for the next 17 years
2002 – Americans saved $3.8 billion shopping with coupons
2009 – The U.S. government uses coupons to promote converter box sales for the digital television transition
Digital television transition
The digital television transition is the process in which analog television broadcasting is converted to and replaced by digital television. This primarily involves both TV stations and over-the-air viewers; however it also involves content providers like TV networks, and cable television...
Types and uses
There are many different types of coupons such as discounts, free shipping, buy-one get-one, first-time customer coupons, and free giveaways. Expired manufacturer's coupons may be donated to U.S. military families at domestic and foreign bases.Function
Coupons can be used to research the price sensitivity of different groups of buyers (by sending out coupons with different dollar values to different groups). In addition, it is generally assumed that buyers who take the effort to collect and use coupons are more price sensitive than those who do not. Therefore, the posted price paid by price-insensitive buyers can be increased, while using coupon discounts to maintain the price for price-sensitive buyers (who would not buy at a higher price).Grocery coupons
The grocery coupons have the advantage of being usable with most retailers and not with only one brand or store. As the other types of coupons, grocery coupons are intended for people who are willing to save money when purchasing groceries but also to direct people towards buying a new type of product which normally will not have as many buyers as with the grocery coupons. They may also be used to increase the salesSales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....
of a certain newspaper for example, as many people who have discovered the savings they can do with these coupons, tend to buy more than just one copy of that newspaper or magazine.
Some grocery stores double the value of a grocery, especially for products that normally are not very well sold.
Welfare coupons
The welfare coupons are coupons given to people who are considered to be living in povertyPoverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...
or at risk of living in poverty. According to the statistics, 19% of people under 18 years, 11.7% among people 18 to 64 years and 9.7% for people ages 65 and older were in 2008 living in poverty in the United States. According to the U.S. Census, over 39 million people were living in poverty in the United States, in 2008 which gets the total poverty rate to 13.2%. On the other hand there are many social programs intended to help these people and whereas some of them provide cash
Cash
In common language cash refers to money in the physical form of currency, such as banknotes and coins.In bookkeeping and finance, cash refers to current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately...
payments for a certain number of hours worked in various activities, most of these programs provide welfare coupons that come mostly as grocery coupons.
The welfare coupons are intended to help people with very low income
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
s to be able to partially satisfy their nourish needs. One of the most popular programs that provide food vouchers to a certain category of people is Women, Infants, and Children (WIC
WIC
The abbreviation WIC can mean:*Walta Information Center, a news agency based in Ethiopia.*Dutch West India Company, a former trading cooperation that led to the establishment of some Dutch colonies....
). The program is limited to pregnant women and children under 5 years old and the grocery coupons may be used to buy certain products such as cheese
Cheese
Cheese is a generic term for a diverse group of milk-based food products. Cheese is produced throughout the world in wide-ranging flavors, textures, and forms....
, milk
Milk
Milk is a white liquid produced by the mammary glands of mammals. It is the primary source of nutrition for young mammals before they are able to digest other types of food. Early-lactation milk contains colostrum, which carries the mother's antibodies to the baby and can reduce the risk of many...
, eggs
Egg (food)
Eggs are laid by females of many different species, including birds, reptiles, amphibians, and fish, and have probably been eaten by mankind for millennia. Bird and reptile eggs consist of a protective eggshell, albumen , and vitellus , contained within various thin membranes...
, and some breakfast cereals.
Fundraising
Fundraising
Fundraising or fund raising is the process of soliciting and gathering voluntary contributions as money or other resources, by requesting donations from individuals, businesses, charitable foundations, or governmental agencies...
companies may also provide welfare coupons for people who are willing to donate certain amounts of money or to adopt animals. These welfare coupons may come as discount coupons for various products or for buying food for the adopted animal.
Delivery methods
Customers may get these coupons from various sources, including national newspapers and the Internet, with web sites offering free printable grocery coupons can be printed at home and use them at retail store. Some major grocery chains also produce digital coupons that may be loaded onto the retailer's store card at home, or at a coupon dispensing machine located in store.Print media
Clipping coupons from newspapers has been the most popular way to obtain coupons, though Internet and Mobile Phone coupons are gaining wide popularity. Based on its annual RedPlum Purse String Study surveying more than 23,000 shoppers, a coupon provider, Redplum, reports 76% of coupon-seekers utilize newspapers as their primary source for coupons and deals; 59% find coupons in e-mails and coupon alerts, an 29% increase from 2010; and 33% use Internet searches to find coupons.Many retailers and companies use verification methods such as unique barcodes, coupon ID numbers, holographic seals, and watermarked paper as protection from unauthorized copying or use.
Other than newspaper, there are also coupon book publishers and retailers who compile vouchers and coupons into books, either for sale or free.
Internet coupons
Online retailers often refer to coupons as "coupon codes," "promotional codes," "promotion codes," "discount codes," "key codes," "promo codes," "surplus codes," "portable codes," "shopping codes," "voucher codes," "reward codes" "discount vouchers" or "source codes." Internet coupons typically provide for reduced cost or free shipping, a specific dollar or percentage discount, or some other offer to encourage consumersConsumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
to purchase specific products or to purchase from specific retailers. Because paper coupons would be difficult to redeem, typically secret words or codes are distributed for consumers to type in at checkout. Marketers can use different codes for different channels our groups in order to distinguish response rates.
Coupon Websites
- CouponCabin
- Coupons.comCoupons.comCoupons.com was founded in 1998 and is a privately-held firm based in Mountain View, CA.Coupons.com Incorporated has digital coupons, including online printable, social, mobile and loyalty card promotions...
- RetailMeNot
- SmartSource
- CouponMom
- FatWalletFatWalletFatWallet is a bargain hunting website, centering around a set of forums that allow users to publish deals and rebate offers on a comprehensive range of products and services, though computer-related products and electronics are most prominent in the listings...
- Savings.comSavings.comSavings.com, Inc. is an online destination that offers coupons and deals redeemable at nationally recognized merchant web sites and stores. Deals are voted on by the community. The Savings.com domain was purchased in 2003 by a founder of the affiliate marketing company Commission Junction, Inc....
- RedPlum
- TechBargains
Mobile coupons
A Mobile coupon is an electronic ticket solicited and or delivered to a mobile phone that can be exchanged for financial discount or rebate when purchasing product or service. Customarily coupon are issued by manufacturers of consumer packaged goods or retailers, to be used in retail stores as part of a sales promotion. They are often distributed through WAP Push over SMSSMS
SMS is a form of text messaging communication on phones and mobile phones. The terms SMS or sms may also refer to:- Computer hardware :...
or MMS
MMS
MMS may stand for:In science and technology:*Multimedia Messaging Service, a standard for telephone messaging systems*The Magnetospheric Multiscale Mission, a four-satellite NASA mission*Manufacturing Message Specification, a networking standard...
, or other mobile means. The customer redeems the coupon at store or online. In some cases customer redeems the mobile coupon at store; some retailers forward the redemption to a clearinghouse for final processing. What's unique about mobile coupons is the memory of information in the coupons often outlast the expiry dates of the coupons themselves, triggering actual purchases at later dates (Banerjee,Poddar,Yancey,McDowell 2011). Researchers suspect it's driven by the engagement generated by the mobile device.
Taxation
Depending on the jurisdictionJurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
, coupons may or may not reduce the sales tax
Sales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....
which must be paid by the consumer. This is often determined by who sponsors the coupon. If the coupon is issued by the retailer, the product was never offered at the original price and the coupon represents a reduction in the amount paid and the tax. If the coupon is issued by the manufacturer, the original price is still paid but some of the price is covered by the manufacturer instead of the consumer and the full price remains taxable. This is the case with the coupon-eligible converter box
Coupon-eligible converter box
A coupon-eligible converter box was a digital television adapter that met eligibility specifications for subsidy "coupons" from the United States government...
es in the U.S., which compensate in part for the forced conversion to digital TV
DTV transition in the United States
The DTV transition in the United States was the switchover from analog to exclusively digital broadcasting of free over-the-air television programming...
.
Mobile coupons have become very popular among US fast-food customers.The primary success factors for the SMS campaigns are discount size, how the discount value is framed (as a gift or percent off) and the timing of the campaign (Banerjee and Yancey, 2010), among many others.
Trading
Coupon manufacturers may or may not place restrictions on coupons limiting their transferability to ensure the coupons stay within the targeted market. Since such restrictions are not universal and are difficult and/or costly to enforce, limited coupon trading is tolerated in the industry. Organized coupon exchange clubs are commonly found in regions where coupons are distributed.Often coupons are available for purchase at some online sites, but since most coupons are not allowed to be sold, the fee is considered to be for the time and effort put into cutting out the coupons.
See also
- Canadian Tire MoneyCanadian Tire moneyCanadian Tire money is a loyalty program by Canadian Tire. It consists of coupons, issued by the company, which resemble real currency , and can be used as scrip in Canadian Tire stores, but is not considered a private currency...
- Coupon (bond)Coupon (bond)A coupon payment on a bond is a periodic interest payment that the bondholder receives during the time between when the bond is issued and when it matures. Coupons are normally described in terms of the coupon rate, which is calculated by adding the total amount of coupons paid per year and...
- Drug couponDrug CouponA drug coupon is a coupon intended to help consumers save money on pharmaceutical drugs. They are offered by drug companies or distributed to consumers via doctors and pharmacists, and most can be obtained online...
- Love couponLove couponA love coupon is a romantic way to say "I love you". It is a form of voluntary IOU or promissory note between people in love that contains a promise from one of the partners in a relationship to engage in a romantic activity at a time in the future....
- Trading stampTrading stampTrading stamps are small paper coupons given to customers by merchants in loyalty marketing programs that predate the modern loyalty card. These stamps had no value individually, but when a customer accumulated a number of them, they could be exchanged with the trading stamp company for premiums,...
- Normal yield
- Extreme CouponingExtreme CouponingExtreme Couponing is an American reality television series currently airing on cable network TLC.-History:Extreme Couponing is an activity that combines shopping skills with couponing in an attempt to save as much money as possible while accumulating the most groceries...