EagleTribune.com, North Andover, MA

June 28, 2013

Coupon marketing is scientific, not chaotic

Coupon Queen
Jill Cataldo

---- — Dear Jill,

I organize my coupons by expiration date. Why are there so many different dates when coupons expire? This month, I have some that expire the 15th, 17th, 23rd, 26th and 28th. It is crazy, and I have to check them constantly. Any ideas why?

Deb Mahoney

Most coupons have expiration dates that fall somewhere between 30 and 90 days from the time the coupon was issued, though there are always exceptions. During allergy season, we often see very short-dated, high-value coupons for allergy medications – and the coupon might have a seven-day time period to use it. Why?

In each case, the manufacturer has created a window of time in which they wish the coupon to be redeemed. Remember, a coupon is used to boost purchases within a very specific timeframe.

The company may also wish to end the coupon promotion before launching into a different offer. Did you know that at times, when you see a product on sale, the manufacturer funds that sale? This is called a temporary price reduction, or TPR, and the manufacturer is reimbursing the store for featuring an item at a lower price than it normally would even when on sale. If a manufacturer is already paying for a TPR, they might not want their coupon valid during that same sale period. (This also explains why you sometimes see a coupon expire, and the product is deeply discounted the next day!)

With manufacturers planning promotions for thousands of different products, it would be impossible to insist that they all coordinate with each other to have like expiration dates. So, each promotion has its own.

Dear Jill,

Read your article, I don’t agree. Do you really think the supermarket ships crates of coupons back to manufactures that try to match them to bulk purchases in order to avoid paying?

Robert P.

Actually, shipping “crates of coupons” is exactly what supermarkets and other retailers do. Redemption of paper coupons typically does not take place at the store level at all. I’ve recently devoted an entire column to the lengthy path a coupon takes from the point-of-purchase to redemption, but I’d be happy to recap it briefly.

Once a store has collected coupons from shoppers, they send all of the coupons to a clearinghouse and pay the clearinghouse. At the clearinghouse, each store’s coupons are sorted by manufacturer. The coupons’ value is totaled, and the clearinghouse sends an invoice to each manufacturer for the value of the coupons that is due to the store. (Note the physical mailing address on each manufacturer coupon – it’s where the coupon and related invoices are to be sent.)

Every major coupon clearinghouse and redemption center in North America operates in this way. I’ve even had the pleasure of visiting one. The process is a lot more labor-intensive than you might imagine! But, there’s another reason coupons are physically sent in by the store.

Let me remind you of the coupon counterfeiting stories that have recently been in the news. If counterfeit coupons are circulating, and you’re a manufacturer, do you want to get some of those coupons back into your hands so that you can see what’s out there – or do you trust that the coupons accepted at the register are all legitimate without ever seeing them? Sending the coupons to a clearinghouse ensures that if the manufacturer wants to physically inspect the coupons that stores are submitting, they can – and it’s one way that new counterfeit coupons are discovered. Fakes or suspected fakes are removed from the coupon processing conveyor and archived. One leading clearinghouse keeps any suspect coupons archived for up to one year.

Smart Living Tip: There’s logic and a science to what marketers do, even when sale and coupon promotions seem random to us. While it may seem chaotic to have a variety of sale dates and expiration dates, each product’s campaign is different and independent of other promotions. And, while it might seem archaic or antiquated to physically send all coupons from the store to the manufacturer or its agent, it’s exactly what happens, week after week.