Coupon

For the former Ukrainian currency, see Ukrainian karbovanets.

Food stuff coupons types I-V for direct laborers and workers at Vietnam in period 1976-1986

In marketing a coupon is a ticket or document that can be exchanged for a financial discount or rebate when purchasing a product. Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in retail stores as a part of sales promotions. They are often widely distributed through mail, magazines, newspapers, the Internet, and mobile devices such as cell phones.

Origin

In 1887, the Coca-Cola Company was incorporated with Asa Candler as one of the partners. He transformed Coca-Cola from an insignificant tonic into a profitable business by using innovative advertising techniques. The key to this growth was Candler's ingenious marketing including having the company's employees and sales representatives distribute complimentary coupons for Coca-Cola. Coupons were mailed to potential customers and placed in magazines. The company gave soda fountains free syrup to cover the costs of the free drinks. It is estimated that between 1894 and 1913 one in nine Americans had received a free Coca-Cola, for a total of 8,500,000 free drinks. By 1895 Candler announced to shareholders that Coca-Cola was served in every state in the United States.

History

Coupons first saw widespread use in the United States in 1909 when C. W. Post conceived the idea to help sell breakfast cereals and other products. Today, more than 2,800 consumer packaged goods companies offer coupons for discounts on products. In 2010, coupons for consumer packaged goods generated more than 3.5 billion dollars in transactions within the U.S. alone.

There are many different types of online coupons such as discounts, free shipping, first-time customer coupons, and free giveaways.

Function

Coupons can be used to research the price sensitivity of different groups of buyers (by sending out coupons with different dollar values to different groups). In addition, it is generally assumed that buyers who take the effort to collect and use coupons are more price sensitive than those who do not. Therefore, the posted price paid by price-insensitive buyers can be increased, while using coupon discounts to maintain the price for price-sensitive buyers (who would not buy at a higher price).

Internet coupons

Online retailers often refer to coupons as "coupon codes," "promotional codes," "promotion codes," "discount codes," "key codes," "promo codes," "surplus codes," "portable codes," "shopping codes," "voucher codes," "reward codes" or "source codes." Internet coupons typically provide for reduced cost or free shipping, a specific dollar or percentage discount, or some other offer to encourage consumers to purchase specific products or to purchase from specific retailers. Example: PharmacyEscrow.com coupons #104604 will give a $1 discount

Grocery coupons and welfare coupons

The grocery coupons have the advantage of being usable with most retailers and not with only one brand or store. As the other types of coupons, grocery coupons are intended for people who are willing to save money when purchasing groceries but also to direct people towards buying a new type of product which normally will not have as many buyers as with the grocery coupons. They may also be used to increase the sales of a certain newspaper for example, as many people who have discovered the savings they can do with these coupons, tend to buy more than just one copy of that newspaper or magazine.

People may get these coupons from various sources, including national newspapers and the Internet, with many sites offering free printable grocery coupons that one can print at home and use them at retail store.

The grocery coupons allow users to save reasonable amounts of money when shopping groceries, and in some cases even up to 60%. Saving with the help of these coupons implies keeping one's coupons up to date and to clip any kind of coupon one finds, even if there is no intention of buying such a product at that time. It also implies to shop in stores with best buys. The most common type of grocery coupon is the discount coupon, which provides discounts for several products in certain shops.

Some grocery stores double the value of a grocery, especially for products that normally are not very well sold.

The welfare coupons are coupons given to people who are considered to be living in poverty or at risk of living in poverty. According to the statistics, 19% of people under 18 years, 11.7% among people 18 to 64 years and 9.7% for people ages 65 and older were in 2008 living in poverty in the United States. According to the U.S. Census, over 39 million people were living in poverty in the United States, in 2008 which gets the total poverty rate to 13.2%. On the other hand there are many social programs intended to help these people and whereas some of them provide cash payments for a certain number of hours worked in various activities, most of these programs provide welfare coupons that come mostly as grocery coupons.

The welfare coupons are intended to help people with very low incomes to be able to partially satisfy their nourish needs. One of the most popular programs that provide food vouchers to a certain category of people is Women, Infants, and Children (WIC). The program is limited to pregnant women and children under 5 years old and the grocery coupons may be used to buy certain products such as cheese, milk, eggs, and some breakfast cereals.

Fundraising companies may also provide welfare coupons for people who are willing to donate certain amounts of money or to adopt animals. These welfare coupons may come as discount coupons for various products or for buying food for the adopted animal.

Taxation

Depending on the jurisdiction, coupons may or may not reduce the sales tax which must be paid by the consumer. This is often determined by who sponsors the coupon. If the coupon is issued by the retailer, the product was never offered at the original price and the coupon represents a reduction in the amount paid and the tax. If the coupon is issued by the manufacturer, the original price is still paid but some of the price is covered by the manufacturer instead of the consumer and the full price remains taxable. This is the case with the coupon-eligible converter boxes in the U.S., which compensate in part for the forced conversion to digital TV.

Coupon Fraud

File:TacoBellFradulentCoupon.jpg

Fradulent coupon warning at Taco Bell

Many retailers and companies now offer protection from unauthorized copying or use via several verification methods including unique barcodes and coupon ID numbers, holographic seals, and watermarked paper.

Pronunciation

The word is of French origin, IPA: [kuˈpɔ̃]. In Britain and Canada it is Template:Pron-en KOO-pon. A common alternate American pronunciation is /ˈkjuːpɒn/ "CUE-pon". Another increasingly popular term of pronunciation is /ˈkjuːpɒn/ CUE-pin this is especially prevalent in the Southern United States

Other uses

In finance, with respect to bonds, a coupon rate is the interest rate that the issuer pays to the bond holders.

In manufacturing and materials science, a coupon is a small piece of material used for testing or further processing, compare billet.

"Football pools" promoters in the United Kingdom also use this name when referring to the paper grids which gamblers fill in to bet on the results of football (soccer) fixtures. On these, players will mark a number of crosses (x) against individual game listings to indicate which they believe will end as a draw, or tied match. Rewards for correct forecasting can be of very high monetary value.

Love coupons and love coupon books are popular gifts on Valentine's Day and other anniversary days. They can be purchased in printed format, downloaded in digital format or be handmade.

See also

• Coupon (bond)
• Trading stamp
• Canadian Tire Money
• Love coupon