The Digital Coupon Revolution?

Be wary.  Be very wary, because this is a threat to couponing as we know it.

I’m talking about the digital coupon.  Not an internet-printed coupon.  Digital coupons are discounts that you activate into your shopping account with a particular store. Typically you access your digital coupons with your store loyalty card or phone number.

As a couponer, you’re in the business of saving money.  Now why in the world would it matter what form the coupon takes, as long as we’re saving?

Here’s the rub.  Digital coupons are designed by the system to limit our ability to save with coupons.  Manufacturers never wanted couponers to be able to stockpile products.  They don’t like it when consumers take advantage of multiple promotions at the same time.  They don’t want us to get products for pennies and certainly not free.  And they certainly do not like it when coupons are used other than as intended.  But they tolerate the small percentage of us exceptional couponers because most of their sales are profitable.  Coupons are proven to generate profits, even if a few of us are actually unprofitable customers.

Then there are the retailers.  They love the business that manufacturer’s coupons bring into their stores, the products that move simply because of the coupons.  But paper coupons are a hassle for the stores.  Accepting and processing coupons costs considerably more than the 8¢ handling fee that manufacturers pay.  There is also the issue of doubling and tripling of coupons.  These programs are marketing offers designed to increase sales.  Remember that manufacturers only reimburse for the face value of the coupon – if a store wants to double, then the extra discount comes out of the store’s pocket.  Research shows that they are effective, but once competitors offer doubling as well, then stores are spending this extra money just to keep their customers from defecting to the competition.

The digital coupon is a dream-come-true for manufacturers and retailers alike.  Manufacturers can control the frequency with which we can receive a coupon discount.  Digital coupons might be limited to one per month per brand, and only on the size or flavor that they want us to buy.  They can coordinate digital coupons to be available only when the product is not on sale.  Misredemption is impossible, since digital coupons are associated with specific UPCs.  Retailers get rid of all the processing hassles of the paper coupon.  Doubling is eliminated, as are costs of fraud.  The ‘system’ loves digital coupons.

These are the very reasons that we should not accept digital coupons.  If the paper coupon goes away, so does the ability to save 70%, 80%, or more on our grocery bill.  The best of us might be lucky to hit 30% if all we have is the digital coupon to work with.  Is the paper coupon really in trouble?

Yes and no.  There is one huge issue that prevents the digital coupon from replacing the paper coupon, at least for now.  Paper coupons serve as a reminder to buy a product.  After all, coupons are a form of advertisement.  For many people, the paper coupon is the only reason that they buy a particular product.  Digital coupons don’t appear to have the same effect.  They’re not constant reminders in our pockets flashing at us when we’re looking at cans of tuna.  Most of us forget that we have a digital coupon loaded until the discount appears on our cash register tape.

Manufacturers are trying to figure out if digital coupons generate new sales like paper coupons are known to do.  This is not an easy question to answer, especially since digital coupon technology is still in its infancy.  Because the system wants digital coupons to succeed, they’re going to be very patient.

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Meet Katherine Cary!

Welcome! I left my marketing career to stay home with my family. Since I started focusing on couponing, I now save over 90% on my grocery bills every month. My goal is to share my insider knowledge to help you become an expert couponer and save more money than you ever thought possible!
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