Feb
16
2010

Coupons Benefit Stores?

by Kimberlee Stokes Affiliate Link Disclosure B

I so enjoyed this post from Brandy at I Prefer Publix that I wanted to repost it.  Be sure to check out her blog for great Publix deals.

One of the things that bugs me the most about being a couponer is that people (and by people I mean, cashiers, managers, other customers) think I am getting away with something, ripping off the store, cheating the system, some even say I am stealing. And it makes me furious.

This attitude comes from a lack of knowledge about how coupons work. If you’re here reading my blog, you probably know how coupons work. Here’s a quick reminder for all of us…

Manufacturer’s coupons: When the stores submit these to the clearinghouse, they are reimbursed FULL FACE VALUE plus $.08 per coupon. So the store makes MORE money by accepting your coupon than by the average shopper handing over cash/credit.
*If a coupon is difficult to read/scan at the fault of the manufacturer/design, the store can charge the manufacturer even more for the handling of these q’s.
*Most Clearinghouses are huge conveyor belts that scan coupons to tally the reimbursement value, so that cashier that agrees to “give it to you for free, shouldn’t that be enough?” by marking your $1 coupon down to $.75? Just made $.25 for the store. That huge scanner doesn’t pay a single inkling to that little $.75 the cashier wrote on your coupon.
*Stores even get reimbursed postage for the cost of shipping the coupons to the clearinghouse.

Doubling/Tripling coupons: A gimmick to get you in the door. The store eats the cost of doubles/triples. They consider it worthwhile if it causes you to shop there rather than at… Wal-Mart.

Competitor Coupons: This is truly a loss for a store. There is no reimbursement value for competitor coupons. Like doubling/tripling, accepting competitor coupons is a gimmick to get you in the doors to buy all your other items at their store rather than the competitor. Stores that accept competitor coupons are using a brilliant marketing strategy. They are counting on you wanting to buy all your items in one place, and hoping that if you have a competitor’s coupon that you can use at their store, you’ll stick around for the other things as well.

Store Coupons: Store coupons are a little tricky to define. Let’s take Publix as an example. Regular Publix shoppers will notice that those Advantage Buy Flyers have coupons and sales that rotate on a regular basis. One that appears often is the $6/2 Sundown Vitamins coupon. The CEO of Publix may be a nice guy, but he’s not browsing the local store looking for things to give away. I promise. :) What happens is, some head honcho at Sundown gets together with some head honcho at Publix and they strike a deal. The value could be based on number of coupons redeemed, or number of stores that run the sale. Specifically for Publix, the most recent numbers show that Publix is getting reimbursed approximately 75-80% of the Store coupons’ face value. So don’t let anyone say to you “Publix doesn’t get reimbursed for these” “We can’t give it to you for free” “We can’t pay you to take it”. Because that shows lack of knowledge of how these q’s work.

BOGO deals (Publix): You may not be aware of this, but like the store coupons, sales like the Mega sales at Kroger and BOGO sales at Publix are also marketing ploys that are reimbursed by the manufacturer! If Publix is selling Scrubbing Bubbles BOGO at $3.99/ea, that means, you, the consumer, will pay half price for the item, or $2.00. At the end of the sale, Publix tells Johnson and Johnson, hey, we sold 100 bottles of Scrubbing Bubbles, costing us $199, now pony up. And Johnson and Johnson PAYS Publix for running the special and promoting the product. It is another form of advertising. Most recent numbers show that BOGO sales at Publix are reimbursed at approximately 70-80%.

ETA: It occurred to me I failed to mention rainchecks. Rainchecks are another loss for a store. The store is reimbursed the difference of the sale to the store, but if a raincheck is issued, the store is the one to eat the cost when you do use the raincheck. The manufacturer will cover the “deal” for the week the item is on sale, but the store is responsible for keeping the items in stock. If a store has to issue a raincheck, then the amount of discount given is lost since it is beyond the sale week. This is a reason you will have limits enforced on rainchecks.

It makes me crazy that people have this mindset that people who use coupons are abusing the system. I hate that. As long as you are an honest couponer, using legit coupons and following the store rules, then you are doing no such thing. Abuse comes from illegal photocopies, stacking two manufacturer coupons on one item, and so forth. That is true abuse of the system. Most of us? We are just honest people looking for a good deal.

And in the end? The store wins. The store wins BIG by catering to couponers. Let me show you what I mean. . .

When I shop at Publix, I use the trick of buying multiple moneymakers to build up overage to afford the items I need. This helps reduce my out of pocket expense. Do I need 10 bottles of Aleve? 8 Rolls of J&J gauze? 10 boxes of Phazyme? Not right at the moment, and I certainly wouldn’t walk into Publix and pay for all of that with cash. So Publix makes a higher profit by selling to me than the average person who runs in for a few things.

My most recent shopping trip:

For Items I use regularly that I stockpiled or needed (eggs, Morningstar, fruit, etc)
Total Cost: $125.61
Total store coupons: $5
Total Mq’s: $64.15
(Quantity of mq’s presented: 51: $4.08 handling fees)
Total doubles: $4.50
Total BOGO: $60.49

For Moneymakers:
Total cost: $108.96
Total store coupons: $103
Total Mq’s: $82
(Quantity of mq’s presented: 41: $3.28 handling fees)

For this scenario, we’ll go with an 80% return on BOGOs and store q’s.
So, for this trip, after reimbursement, the store will have received approximately $288.50, losing $38.20 in store coupons, doubles and BOGOs.

BUT If I wasn’t a couponer, and only bought the items I needed/wanted, and we’re assuming I am still stockpiling… The store would have made $120.62, losing $17.60 in store coupons, BOGOs and doubles.

When I shopped, I cost them $20.60, but I brought in an additional $167.88.

Now. Which stores was it that wanted to turn away the couponers????

*Disclaimer: I worked as a budget/price analyst for four years for a Publishing company, saving my company more than $1.5 million in residual effects in a single year, so I am pretty darn good with numbers.

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