What Are Coupons and How They Work?

In the field of marketing, a coupon is basically like a ticket or document or in online marketing, a promo code that is redeemable for a financial discount or rebate when buying something. Nowadays we spend long hours surfing on the internet, and these can be actually useful and be exchanged for something better.

That is cutting costs and getting discounts. This is now possible by using coupons. In the past few years, people have found ways to scoop out coupons from everywhere they can, and use it for long grocery hauls and the like using coupons for cash back and discounts.

What’s the Science Behind Coupons?

Mostly, it is the manufacturers of consumer goods or various retailers who issue various kinds of coupons for use in retail stores or online as a part of sales campaigns and promotions.

They are usually distributed on a large scale through mail, email, coupon envelopes, coupon brochures, newspapers, magazines and the Internet (social media, web sites), or even directly from the store or retailer. Mobile devices such as tablets or cell phones also often have apps that help you redeem vouchers.

Basically coupons are a way of price discrimination because only consumers who are very price-conscious will make the effort to claim the money for savings. This lets retailers have a chance to get customers that would go elsewhere, hence bringing business to the retailers. Also, they serve to target selective and regional market where there is a lot of price competition.

Different Kinds of Coupons

There are many different kinds of coupons, which can be classified as discounts, free delivery, free shopping, two for the price of one, new customer coupons, trials, product launch coupons, special festival discounts as well as promotional giveaways. Different coupons have different uses. For instance, they may be used to purchase an item, reduce the price of an item, give free samples for customer opinion, or to get demographics for customers.

Function of Coupons

There are many different ways Coupons can be used. They are used to research the price sensitivity that exists in various demographics of buyers. Additionally, it is thought that those buyers that make more effort to collect the coupons are more price sensitive as compared to those who do not. Therefore, the given price paid by those who don’t use coupons can be increased, the whole coupons are used to maintain a lower price for those customers who will not go for the product at a higher price.

How Are Coupons Used?

There is no fixed way of using a coupon. Depending on your medium of coupon acquisition, the usage and application can vary. However, there are many tips and tricks that you can use to understand the usage of coupons as well as how the benefits of coupons can be maximized.

Here are some tips as well as principles that are employed in coupon usage. The amount of cash back or discount all depends on the retailer, but they can be used cleverly to maximize the benefit of the coupons. Following are some points about how coupons are used:

Understanding Overage: first of all it is important to understand overage. This is basically what happens when the amount and value of your coupon exceed the actual cost of the product. So what does this mean? It means that either the retailer owes you some money, so some credit towards your present bill. But how do you reach overage?

One of the reasons is to use a manufacturer and a store coupon together. For instance, one brand of bread will have a coupon while the store retailing will have another coupon. This way a coupon will be applied on the total, and your coupon value will exceed the original price of the bread.
A coupon on an on-sale item: this is another one of the ways where you can get some overage. There are mostly no rules on coupons, only expiry dates. Hence, use that coupon on an item with a slashed price.
Price matching on a coupon valid item: this is slightly complicated, but let’s say your go-to store has an item for 99 cents. Your price beat it at another nearby store, and then apply the coupon after a buy one get three offer or similar.

Understand coupon policies: Every store will have a different coupon policy. It is important to understand these so that you can save maximum money. For instance, most stores have the policy to allow only four same coupons for every transaction, which means that there may be only four coupon applications per transactions.
Being vigilant: Whether it is online or in print media, one must always be vigilant about the different types of coupons at all times. For instance, see a newspaper with a free coupon, grab a couple of them. This way you can keep them saved and even if one coupon is allowed per transaction, you can always visit the next day, or better yet, send a friend to do it for you.
Always be aware of the terms and conditions: One of the common mistakes most people make is not to be aware of the terms and conditions of the coupon and most fail to get maximum benefits from them. Always be prepared for what you need, and how you are going to get it following the terms and conditions of the coupon. Also, this will save you from an expired coupon.

Final Words

Coupons are a great way to save and put that money in another pursuit. It could be for travel or furniture, or any hobby. Coupon savings can add up to hundreds and even thousands with a little vigilance and technique.

Additionally, when using coupons, try to buy all valid coupon items at a store, or if the coupon is by the store itself, then buy only what you need. Always remember to thank the retailer or brand from time to time for their coupon as well as their services so that you can get appreciation coupons of better value in return.