Why Do Companies Print Coupons?

If you’ve ever watched the TV show Extreme Couponing, you might have wondered what’s in it for the manufacturers and stores who offer these coupons. Are they actually making money in the process?

The truth is that coupons create a win-win situation for both companies and consumers. Manufacturers and stores are benefiting from coupons. If they weren’t, they wouldn’t issue them or accept them. To find out how they benefit, let’s examine some of the reasons why companies offer coupons.

Key Takeaways

• Manufacturers and stores benefit from the coupons they offer to consumers.
• Loyalty cards are a form of coupon that allows stores to keep a record of scanned purchases.
• Coupons can entice customers to build loyalty with a specific company or product. 

1. To Get Consumers’ Attention

Companies need a way to steer consumers toward their product instead of a competitor’s. A coupon can help an item stand out.

If you have a coupon for a specific brand of paper towels, for example, it will probably be the first brand you’ll check the price on among the ten different brands in the paper towel aisle.

2. To Advertise a New Product

Consumers need to be enticed to take a chance on a new product, especially price-sensitive, coupon-using shoppers.

A company could advertise its new product by offering free samples, but instead of spending money both on the product itself and on getting the product into consumers’ homes, it could offer a tempting, high-value coupon and actually make a sale.

Important

If the consumer likes the new product enough, they may buy it at full price in the future when introductory coupons are no longer available.

3. To Buy Loyalty

Numerous factors go into getting and retaining customers. Offering a bargain price or a superior product isn’t always enough. When a store or manufacturer provides a coupon, the discount generates goodwill and brand/store loyalty.

When you get a coupon from your favorite store in the mail, for example, you might feel like the company values your business and wants to keep you as a customer.

4. To Get Repeat Business

Some promotions require consumers to use a reward on their next visit to the store. Such coupons draw customers into the store once to buy something and get a coupon, and again to buy something else and use the coupon.

For example, a grocery store promotion might give customers a coupon for $10 off their next visit if they purchase $100 in qualifying gift cards.

Even if a customer did the bare minimum and walked out with $10 in free groceries on the follow-up visit, that customer might be more likely to come back in the future after having gained some familiarity with the store when they did their coupon shopping.

Other customers will spend beyond the coupon limit, so the store might profit from the promotion right away. Also, the promotion notified customers that this grocery store is a place where they can buy gift cards, which means that the store might gain business the next time that a customer wants to purchase a gift card.

5. To Target Their Marketing Efforts

To get the best discounts at most major grocery store chains, customers must sign up for a store loyalty card and have the cashier scan it each time they make a purchase. In exchange for giving customers lower prices, companies get detailed information about the card user’s buying behavior.

What days and times does a customer like to visit the store? How much do they spend per trip? How often are shopping trips made? What is purchased? Do they only buy things that are on sale? Do they always use coupons?

Companies can use this valuable information in their decisions about what products to carry, what prices to set, what to put on sale, how much of a discount to offer, and more. This information also helps companies with targeted marketing efforts. When companies know what you buy, thanks to store loyalty cards, they can save money on marketing costs while sending you offers you’re more likely to use.

For example, instead of sending a coupon for diapers to every household in a nearby zip code, the store can send diaper coupons only to customers who have purchased diapers in the past.

How Many Items Are in a Supermarket?

According to the Food Marketing Institute, the average supermarket carries over 35,000 items.

Do People Actually Use Coupons?

Some do. According to a 2024 report by Vericast, a third (33%) of consumers said they prefer to use coupons in the mail or newspaper to find out about promotions and discounts during the holidays. About the same percentage preferred either email (35%) or online coupons or discounts (29%).

How Popular Are Digital Coupons?

About 57% of consumers prefer digital coupons. 43% of consumers favor paper coupons.

The Bottom Line

Coupons benefit both businesses and consumers. Consumers use coupons to save on their purchases, and businesses use coupons for several reasons, including building brand loyalty to get repeat business from consumers. This can increase sales, both per customer and overall.