A Retailer’s Guide to the Different Types of Coupons

A Retailer’s Guide to Understanding the Many Different Types of Coupons

Manufacturer coupons, store coupons, digital coupons, printable coupons, Catalina’s, hangtags, blinkies, peelies, buy-one-get-one, 10 percent off….oh my! From a retailer’s perspective, coupons can be confusing and intimidating. And if you look at it from a top-down view, that’s probably true. However, coupon campaigns really aren’t that difficult to understand. You simply need to know what the different types of coupons are, which will work for your business, and which are irrelevant.

9 Types of Coupons You Need to Know

Do you need a primer on the different types of coupons in circulation? Not a problem, we’ve got you covered. The following list contains nine of the most common coupons currently being used in 2015.

• Manufacturer coupons. Manufacturer coupons are simply general coupons issued by manufacturers in an effort to increase demand and sales for their products. These are the coupons you commonly see in Sunday newspapers throughout the country. Individual stores that sell these products can then choose whether or not they want to accept these coupons (most will). Ultimately, these stores collect redeemed coupons and send them to clearinghouses where the manufacturer cuts a check and reimburses retail partners for the total amount of the discount.

• Store coupons. Then you have store coupons. These are coupons that are issued at the store-level and have no relationship to the manufacturer. These coupons are meant to entice customers to shop at a specific store and the retailer directly absorbs all discounts. In some cases, customers will attempt to stack manufacturer and store coupons, but this isn’t always allowed.

• Digital coupons. This is the overarching name given to coupons that are found online or distributed via SMS to smartphone users. Digital coupons come in both manufacturer and store forms and have become increasingly popular since their inception in the 1990s. Other common names for digital coupons include eCoupons, online coupon codes, and printable coupons.

• Catalinas. Named after the company that invented the little box that coupons are printed from, Catalinas are coupons that print directly from the cash register at the time of purchase. They often come on the back of a receipt and include store and/or manufacturer coupons for future purchases. It’s also common for Catalinas to contain coupons for other local stores. These brands typically pay the distributing store for this precious advertising space.

• Hangtags. These coupons are found on items like two-liter drinks, oils, soaps, jellies, and other jars and bottles. They get their name from the fact that they hang from the neck of the product. Hangtag refers to the style of the coupon itself, not necessarily the deal found on the coupon.

• Blinkies. These coupons are found on store shelves in front of the products they are offered for. They get their name from the fact that many of the boxes containing these coupons have little blinking lights to attract customers. Blinkies were very popular in the late 1990’s and early 2000’s, but they have recently dropped in significance as other forms of coupons have evolved.

• Peelies. While it’s another funny name, peelies are coupons that are found directly on a product’s packaging. The coupon can be peeled away like a sticker and immediately used on the purchase. These are almost exclusively manufacturer coupons and have pretty high redemption rates because of the immediacy of the coupon.

• BOGO’s. Now we get into some of the deals found on different styles of coupons. One of the traditional coupons is what’s known as BOGO (buy one get one free). These coupons do exactly as they say. They allow customers to get one item free after paying full price for the same item. Another popular variation includes buy-two-get-one-free.

• Percent off. The second most popular coupon deal includes getting a certain percent off the item’s full price. These percentages typically span from 10-75 percent off, with the large majority coming in the 10-25 percent range.

Where Coupons are Distributed

As a retailer that’s new to the idea of using coupons, it’s also helpful to know where coupons are commonly distributed. The large majority are found in the following places:

• Newspaper inserts
• Product shelving
• Store advertisements
• Magazines
• Online coupon sites
• Company websites and blogs
• Text messages
• Home mailers
• Social networking sites

Top Reasons to Use Coupons

But why incorporate coupons into your existing sales strategy? That’s a common question retailers have when mulling over the opportunity to branch out and start offering discounts. Whether it’s store or manufacturer coupons, the following benefits are commonly uncovered:

• Unload inventory. Coupons can be used to help you unload stagnant inventory, clear shelf space for new inventory, or increase the perceived demand for a specific product. Depending on how generous the offer is, businesses are able to accelerate sales with very little effort.

• Increase average transaction size. BOGO coupons are commonly used to increase the size of transactions. Instead of customers spending only a few dollars, these coupons encourage them to make larger purchases – passing along bigger profits to the retailer.

• Earn new customers and reactivate old ones. Specially targeted coupons can help businesses attract new customers or even reactivate old ones that haven’t made purchases in a while.

• Drive traffic to website. When using online coupons, businesses can drive traffic to their websites by aligning with third-party deal sites like Groupon or RetailMeNot.

• Brand advertising. Ultimately, coupons are a great form of advertising. Not only do they directly lead to sales, but they can also indirectly lead to sales down the road as consumers begin to view your brand as price-friendly.

Contact Mandlik & Rhodes Today

At Mandlik & Rhodes, we’ve been involved with coupons for more than 20 years. We’re viewed as one of the most trusted and transparent clearinghouses in the country and would love to do business with you. Whether you’re a manufacturer or retailer, we’re interested in telling you more about the coupon processing process and how it will benefit your organization. For additional information, please contact us today!