Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in retail stores as a part of sales promotions. They are often widely distributed through mail, coupon envelopes, magazines, newspapers, the Internet (social media, email newsletter), 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.
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). When these coupons are entered at the time of the checkout process, it reduces the order total for the customer.
Grocery coupons come in two major types: store coupons and manufacturer’s coupons.
Store coupons are coupon-based discounts offered for a particular item or group of items. The issuing store will accept its own “store coupons,” but some stores will also accept store coupons that are issued by competitors.
Coupons issued by the manufacturer of a product may be used at any coupon-accepting store that carries that product.
Manufacturer’s coupons have the advantage of being currency at a variety of retailers, not just at one store.
Grocery coupons are incentives for people who want to save money, but manufacturer coupons are primarily intended to advertise products and lure new customers with financial incentives. They may also be used to increase the of newspapers or other publications. For example, people may purchase multiple copies of a newspaper or magazine in order to use the coupons contained within.
Some grocery stores regularly double the value of a grocery coupon as an incentive to bring customers into their stores. Additionally, stores might hold special events where they will double or triple coupon values on certain days or weeks. Whether or not a specific grocery chain will double or triple coupons usually depends on the original coupon value.For example, many -owned stores double coupons with a value of $0.50 or under.