I am not talking about manufacturer’s coupons, which is another thing entirely; I’m specifically asking about store coupons.
Today was gramma’s birthday and after taking her out for lunch she decided that as long as we were out in -0F weather we might as well pick up some groceries, as well.
There was a big huge sign right above the Red Baron fropis: “Buy one, get one free - WITH COUPON!” I had been talking pizza long before we happened upon the 2-for-1 deal, so we each grabbed a pair and set off towards the other end of the store to get the coupon. Which was in a big bin of printed coupons set aside for shoppers who don’t bother to get the paper.
When we gave the clerk the coupon he said, “Oh, wait, sorry - this is the coupon for the store brand pizza; hang on a second while I get the coupon for the Red Baron pizza”, and reached under his counter to grab this week’s coupons in order to scan the right barcode.
This is not rare.
Sooo…the grocery store spends $xxx.xx printing and inserting a six-page, full-color spread into the paper every Monday; spends another $xxx.xx printing enough full-color spreads to cover each and every one of its 20-something stores; spends another $xxx.xx for employees to not only stock and maintain the special coupon bin but also stick some under each checkout counter.
Now I know I’m very naive when it comes to business, but it seems to me that $xxx.xx + $xxx.xx + $xxx.xx costs a whole lot more than a single $xxx.xx “read our ad and buy free stuff!” newspaper insert.
So, like I said. What’s the use/purpose of store coupons?
There’s a certain price point at which the store makes a profit. They like selling things at that price point. But there are also people who, for various reasons, are willing to pay more than that price. They like that even better. For the store to make maximum profit, they ideally want to sell the product for the high price to anyone who’s willing to pay the high price, but to also sell it at the low-but-still-profitable price to the people who aren’t willing to pay the high price. One way of doing this is coupons: The people who are willing to pay the high price won’t bother to jump through the hoops to cash in the coupons, but the people who are minding their budget will.
Beside what’s mentioned above, other reasons are to see how productive the newpapers ads are, or to limit each customer to only one cheap deal.
The problem is that in the situation described by the OP, where coupons are available IN THE STORE, and the employees even go out of their way to give you the right coupon, none of these reasons apply.
It’s not to get you into the store (like Duckster and IamNotSpartacus suggested), because you first came into the store and then found out about the coupon. It’s probably not to get extra money from people who are too lazy to jump thru the hoops (like Chronos suggested) because a pile of coupons are sitting right there. And it’s not to limit people to only one good deal (like I suggested) because anyone can go back and take more coupons from the pile.
So why do they bother with the expense of printing coupons? They could just lower the price. (Yes, they wil lose a bit of money because even Chronos’s lazy people would get the cheaper price, but look at the cost of printing the coupons!)
Maybe they’re more likely to choose that store next time just in case there will be more in-store coupons? Maybe it builds some sort of store loyalty if customers think the staff is giving them a break by providing the coupons?
They publish coupons to generate interest and build traffic. Once you’re in the store, if you don’t have the coupon for a highly visible special, they don’t want you get pissed off.
Many stores now have loyalty cards that you have to sign up for if you want any of their sale prices. But I walked into a Safeway to buy a handful of things. They asked me if I had their card, and I didn’t. They asked to me sign up for one, and I told them I was from out of town and there wasn’t a Safeway where I lived. So the cashier pulled out a card, scanned it, and I got the discounts anyway.
As someone who used to work in retail product planning, let me throw out a few phrases that may or may not be helpful.
(I was in it what seems like a lifetime ago - some of this information is known to me as just resident knowledge - so if I’m being pedantic or obvious, please forgive me)
Store Coupons in newspapers are to help promote “destination shopping” - you will specifically go to that store to get the price promised in that coupon.
“Destination Shopping” will also often include “loss leader” items. These are items that are actually not intended to make a profit - just to get your butt in the store. Because the theory is that once you are in the store, you are more likely to buy other, profit-producing items rather than shopping at an additional location.
“Destination Shopping” works well until you start dealing with Busy Betty consumers. (not an industry name - just mine) These are the ones who are as others pointed out “too busy” to clip the coupons but still need/want the items. By putting additional coupons at the front of the store - Busy Betty knows she can still get the same pricing advertised in the newspaper and so she still “destination shops.”
As for scanning the coupons at the counter or giving you the loyalty card pricing without the card, this is part of the “destination shopping” philosophy as well. Because they want to impress you with that warm and fuzzy feeling that keeps you coming back.
Point to ponder: Stores that commit to these “destination shopping” tactics have to make the profit up somewhere, as pointed out. So if you always one-stop shop at the place with the good deals that week - think about how much of a good deal you are really getting with all the additional profit-providing purchases you make.
So of the best overall shopping can be done at places that don’t do as much “destination shopping” as they do honoring manufacturer’s coupon (since their suppliers chip in to cover these costs, leaving them with better profit margins).
Side note: POS - “point-of-sale” items are those last minute purchases you make while standing in line or as you are walking by an endcap - those “impulse” purchases. Back in the day - we would always chuckle about how low the costs/high the margins these items were. A lot of that stuff really IS a “piece of sh**”.
One thing is store loyalty. If the cashier is authorized to helping you get a lower price, one that you would not get on your own without knowing where to look, you tend to look favorably on that store. OTOH no one likes being ripped off and it’s not a good feeling to find you payed a certain amount for a item that everyone else is paying half that amount.
Of course, if you really want to save money, you’ll go to a store and only buy the loss-leaders, stocking up on them when you can, and getting your other products from other stores or other times when they were the loss-leader. My very frugal mom frequents something like six different grocery stores, depending on what’s on sale at each.
Wow, clipped coupons for grocery stores still exist? At both grocery stores in my neighborhood (Key Food and Super Associated, the latter of which BLOWS) they just put out yellow papers advertising THIS IS ON SALE this week, and they also have other unadvertised sales. There’s no effort on my part except for scoping out the good deals, and stocking up at the right times. I’m not sure if buying 6 boxes of Honey Bunches of Oats for “2 for $4” causes Key Food to make more or lose more…
Even our Safeway, at which most sale items are automatic with your card, has a few coupons in their circular.
Thanks, melodyharmonius, for the explanation. My daughter lived next door to an Albertson’s in Portland. The tenant in her apartment before her put a stop to store circulars. She wanted one, contacted Albertson’s, and they hand addressed one for her every week. Perhaps the reason for the coupons in the circular are to get you to look at it.
This may be overexplaining, but if it’s a loss leader, printing the coupon will keep folks from getting 50 of the items and stocking up. Even if the cashiers are providing coupons for people who don’t bring them in, I’m sure they would stop at just the number listed on the coupon.
Perhaps the stores are counting customers to see how many they can drive in.
Where I am Walgreens does this and the Walgreens close to me usually only has the sale items on Sunday and Monday and then they are out (they offer rain-checks) but they usually won’t restock the coupon sale items till next week.
In addition to the reasons cited by melodyharmonius, many store coupons are manufacturer-supported – meaning that although the store prints, distributes, and processes the coupon, the manufacturer is the one who’s paying for the discount.
They can do this while saving the money it would cost them to do an insert and pay the store and the coupon clearinghouse for processing the coupon that way.
How could that not be achieved (with a lot less dicking about) by a regular catalogue/pamphlet/flyer/something like that?
I’ve never seen a coupon discount in a supermarket in Australia. New World in New Zealand still use them, but my recollection there was that since almost no-one ever remembered their coupon books, the check-out staff would just scan the store one through anyway, thus defeating the entire purpose of having a mail-out coupon book in the first place.
What Chronos talks about in post #4 is known as price discrimination. Mail-in rebates are another form of this – those who are too busy or don’t care about the money will not bother to fill out the form, cut out the UPC, etc., while those who are price sensitive will.
For both coupons and rebates, the result is the rich (or lazy) pay one price, while the poor (or frugal) pay another. Without the discount, the poor may not purchase the product at all, so by effectively tailoring the price to each category of shopper the seller (or manufacturer) can maximize overall profits. Were they to simply lower the price, the rich would be paying less than they were will to, and the seller will be leaving money on the table. The goal is to have each customer pay the most they are will to pay for the item, provided you can still make at least a small profit at every such price. Hence the term price *discrimination *– you don’t treat every customer the same.