How do coupons really work?

[pam0815]

Not sure if this is where this post shld go but I'm sorry if it dont...So does anybody kno exactly how coupons work? You give them to the store and what happens then? also how does a store stay in business if it doubles coupons? I have been couponing for a few years and I never really got the deets on how that actually works! I see alot of coupons will say "will reimburse face value plus 8 cents" but if the manufacturer is doing that then how are they not goin out of business? Does each manufacturer get paid to come out with coupons or is it just a nice thing that they do?

[$Saving!]

Not sure if this is where this post shld go but I'm sorry if it dont...So does anybody kno exactly how coupons work? You give them to the store and what happens then? also how does a store stay in business if it doubles coupons? I have been couponing for a few years and I never really got the deets on how that actually works! I see alot of coupons will say "will reimburse face value plus 8 cents" but if the manufacturer is doing that then how are they not goin out of business? Does each manufacturer get paid to come out with coupons or is it just a nice thing that they do?

The manufacturers decide to produce the coupons and values. It is part of their marketing to get consumers to buy their product and increase their share of the market on that type of item. It is also used to keep a faithful customer base to that product.

The redemption of coupons by consumers to retail stores starts the process.

The stores submit them to clearinghouse handlers for reimbursement. As you noted, on the coupon the manufacturer states they will reimburse the face value + handling fee to the retailer.

If the retailer chooses to double the coupon, the cost of that doubling comes out of the retailer's bottom line, not the manufacturer.

What you have to realize though, is that the retailer still makes money because the bulk of their customer base does not use a level of coupons that would cost them all their profit margin.

And the same with the manufacturer. They have a marketing department that determines how many coupons they will produce, what return on volume they expect and make those offers accordingly.

It's the same concept with department stores who offer discounts - it is to draw in customers who will raise their bottom line.

[pam0815]

If the retailer still makes money why do they limit the amount of one product to consumers when its on a really good sale? Also how does the retailer still make money if, with the coupon, the product is free? Thanks for all the info by the way...Its really helpful

[auntrae378]

The manufacturers decide to produce the coupons and values. It is part of their marketing to get consumers to buy their product and increase their share of the market on that type of item. It is also used to keep a faithful customer base to that product.

The redemption of coupons by consumers to retail stores starts the process.

The stores submit them to clearinghouse handlers for reimbursement. As you noted, on the coupon the manufacturer states they will reimburse the face value + handling fee to the retailer.

If the retailer chooses to double the coupon, the cost of that doubling comes out of the retailer's bottom line, not the manufacturer.

What you have to realize though, is that the retailer still makes money because the bulk of their customer base does not use a level of coupons that would cost them all their profit margin.

And the same with the manufacturer. They have a marketing department that determines how many coupons they will produce, what return on volume they expect and make those offers accordingly.

It's the same concept with department stores who offer discounts - it is to draw in customers who will raise their bottom line.

As $savings said - they assume the majority of the customers won't use the q's... then the stores assume the same... so their lose is low but with more q's being used it may change some store policies.

there is always the stores discretion to alter its policy on how they accept and redeem coupons.

ALso, remember that the mark up on alot of the items is high so they still make a profit on the items they sell. even if they give it away free.

for ex: Tic Tac q's for $.75/1 store will double to $1.50 Item costs $1 retail. They paid approx. $.35 per item. Get $.75 after they return Q's to manufacturer. they still make $.40 on each item. so the store doubling does not affect their bottom line.

Some things they lose alittle and others they gain.

make sense???