Do Stores Lose When Couponers Win?

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Do stores lose when couponers win?
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By Jill Cataldo
Tucson, Arizona | Published: 07.05.2009

If you're a regular reader of my column, by now you know that I love paying as little as possible for my groceries.

Getting many things for free is great for the household budget, and it's fun, too. Yet, as you start to see your weekly grocery bill dropping by a third or even by half, you may start to wonder, "Is my store losing money because I use coupons?"

You'll be happy to know that your store doesn't lose a dime when you use coupons. In fact, they make more money when you use coupons to save. The next time you're clipping coupons, read the fine print on one. The text reads, "Manufacturer will reimburse retailer the face value of this coupon plus $0.08 handling fee."

Did you catch that? Not only does the store get back the coupon's entire worth, it also will receive from the product manufacturer a payment of 8 cents per coupon redeemed.

Now, 8 cents may not seem like a lot, but if I take 20 coupons to the store this week, the store will make an extra $1.60 during my shopping trip. I save money and the store makes more money. It's a win-win.

In one of my coupon classes, someone asked me if the store still makes money when a shopper uses a coupon to get an item for free.

Yes, it does. Here's a great example.

This week, my grocery store is having a "dollar sale" in which items are on sale for $1 each. Pairing $1 coupons with a $1 sale is one of the easiest and best ways to get grocery items for free. So, I had five $1 coupons during this sale and I bought five $1 items with them. Even though I got those five products for free, my store will still get the $5 cost of those items reimbursed to them, plus 8 cents for each coupon I've used. I went home with five free products and my store will receive $5.40 from my coupons. Rest assured, even though you're taking home free things, your store is still being paid for them. Just not by you.

Why do manufacturers offer coupons that will many times give shoppers their items for free? Manufacturers want shoppers to try their products.

They work hard marketing a brand and enticing shoppers to try it. They hope that by offering a coupon you'll try their product, realize that you can't live without it, and continue to buy it on numerous occasions in the future. They're trying to build brand loyalty and product awareness.

You also may wonder if the manufacturers themselves lose money when people use coupons. Manufacturers do, indeed, reimburse stores for each coupon that shoppers use. However, coupons are part of their larger business plans. Manufacturers spend millions to establish a new brand or continue cementing loyalty to an old one. They often need to make shoppers aware of varieties of existing products or seasonal items, and they're willing to pay a certain amount of money in the form of coupons as part of these important marketing strategies.

Of the hundreds of thousands of coupon inserts that arrive in newspapers each week all over the country, the number of coupons that are actually cut out and redeemed at the stores by shoppers is around 6 percent. That's it. About 94 percent of all coupons are thrown in the trash.

Reading that statistic always makes me cringe. All that "cash" being tossed away? It makes me shudder to think about all of the free goods that many people pitch into the recycle bin each week. If they only knew how many things they could get for free with those coupons.

Who doesn't want to get things for free? Almost everybody does. Coupons make it very easy to get items for free.
Next week, I'll tell you another easy way to get free groceries with coupons.