The Link Between Coupons and Pricing

by admin on February 15, 2015

Coupon hanging from bottle - OwalaThe Link Between Coupons and Pricing

Super-couponing offers consumers the ability to get fantastic deals, but there are those who are concerned that any use of coupons drives up product pricing for other consumers and leads to lower profits for both manufacturers and the stores selling their products. Is this the case? Thankfully, the answer is no.

Coupons fall within the marketing budgets of companies, and a test-case analysis of marketing expenditures for cereal coupons showed that their contribution to product pricing was less than one cent. In addition, there is evidence that a company’s decision to discontinue coupons so as to enable lower product pricing results in lower sales for the company in question as well as higher sales for that company’s competitors.

As for the stores selling the manufacturer’s products, they absolutely do not take a financial hit when customers use coupons or super-couponing. Stores are reimbursed by the manufacturer for the value of the coupon, and, in addition, receive .08 cents more than the value of each of the coupons as a reward/incentive for their assistance in the promotion and distribution of the manufacturer’s products via their acceptance of the manufacturer’s coupons.

Putting all of this information together, it can be clearly seen that coupons are beneficial to all of the parties involved. Manufacturers and stores both end up making more money than they otherwise would, and consumers end up getting to keep more of their hard-earned money. With these considerations in mind, there is absolutely no reason for a consumer to avoid getting the best possible deals.

Learn more about couponing by reading our Couponing for the Beginner: A Guide to Couponing for the Uninitiated

 

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