The Mystery of the Disappearing Coupon

During 2015, 294 billion coupons circulated. We were down to 168 billion in 2021.

Coupons are harder to find.

The Disappearing Coupons

At checkout also, fewer coupons were used. Much higher at 3.5 percent during the early 1980s, now redemption rates are close to .5 percent of all print and digital coupons.

The reason could be the opportunity cost. More of us are increasingly unwilling to deal with spending the time it takes to access and then remember to use our coupons. In addition, we have other alternatives like cash back rewards and points that we earn for each purchase.

History

We first used the equivalent of coupons during the 1970s when a printing company called Valassis distributed booklets of discount tickets on certain goods that we could use anywhere. I also remember the S&H Green Stamps that you could collect for subsequent discounts. From there, we wound up with the newsprint pages of coupons that we could clip, take to the store, delay the checkout line by handing them in, and get a deal on our groceries.

Some have hypothesized that women in the workplace reduced coupon clipping. We just did not have the time. Correspondingly, during the Great Recession when unemployment increased, couponing resurfaced. But since then, reflected by the financial plight at the chain that depended on coupons, Bed, Bath & Beyond, their use has plummeted.

Our Bottom Line: Price Discrimination

People willing to expend the time and energy looking for coupons pay less. But businesses still can take advantage of the group who, ignoring the coupons, are willing to pay more. Here, the business owner can benefit. After all, she does not have to offer lower prices to everyone. The result is price discrimination.

In economics textbooks, price discrimination is typically discussed in chapters on monopoly. A monopoly and a smaller firm with a unique good or service have pricing power that have enables them to target different customers with their prices and coupons. Many movie theaters discriminate by charging less on a Tuesday or for a weekday matinee. Without explicitly saying so, they are giving senior citizens a discount.

My sources and more: Thanks to Slate Money (which I look forward to every Saturday) for alerting me to this NY Times coupons article (the source of our featured image).  Next, we can look at this Washington Post 2019 article for a failed coupon strategy.