The Life Cycle of a Coupon and The Purpose of "Do Not Double"

I’ve been researching more about “Do Not Double” coupons, so it seemed appropriate to start with the Life Cycle of a Coupon. 

Life Cycle of a Coupon

1.  Consumers get coupons from the newspaper, magazines or online.

2.  Consumers use a coupon at a store to reduce their out of pocket expense.

3.  The cashier counts her cash and coupons to balance the drawer at the end of a shift.

4.  The coupons are all bagged together at the store and shipped to the corporate office.  The coupons are then shipped together from corporate to a clearing house (some stores may do this in house). 

5.  At the clearing house, the coupons are sorted.  Coupons in good condition are put on a conveyor belt where an automated system sorts by manufacturer and prepares an invoice.  Coupons that are in poor condition (ie. torn or won’t scan) are labeled as “hard to handle” and are sorted by hand.

6.  The coupons and invoice are mailed to the manufacturer for payment.

7.  The manufacturer pays the invoice.  They may send the coupon to their own clearing house for verification and to check for fraudulent coupons.

8.  The store can be paid by the clearing house in which case the clearing house gets reimbursed from the manufacturer or the store can pay a handling fee to the clearing house and get a check directly from the manufacturer.

More about coupons

*The store has 6 months (or more) after the expiration date to submit a coupon for payment. 

*Manufacturers reimburse stores the “face value” of a coupon plus $0.08 per coupon for handling.

* The store does not have to submit any information about what you purchased with the coupon!  All the coupons are submitted together.  Verification may be made against the number of coupons redeemed and the quantity of an item the store purchased.  A store purchases thousands of bottles of Kraft salad dressing, so this shouldn’t be an issue.

How Stores “Lose” Money

Poor coupon redemption practice – I’ve read countless articles on the importance of stores having proper and efficient coupon redemption practices.  This is in no way tied to the consumer.

Fraudulent coupons – Unfortunately, there has been a rise in the use of fraudulent coupons.  Manufacturers have branched out into providing Internet coupons to promote their products.  This has opened a way for people to take advantage of  the system.  In most cases, consumers are unaware that a coupon is fraudulent.  Bloggers work hard to provide readers with legitimate coupons.  The store loses money for these coupons and it is illegal!

Coupon Copies – Internet printables that have unique numbers (Coupons.com, SmartSource, RedPlum) make it easy for the manufacturer to spot a fraudulent coupon. There is a limit of 2 prints on most of these coupons.  Hitting the back button allows a double print, but the coupon gets a different verification code. If a coupon does not have a unique number or security code then the manufacturer will usually accept the coupon (within reason). Why do they usually accept them? Because the store’s corporate office has a chance to challenge any denial. If the manufacturer cannot prove fraudulent use then the store will win the challenge.

Why Coupons State “Do Not Double”

1.  Coupons state, “do not double” to inform the store that they will only reimburse the store for the “face value” of the coupon plus $0.08 handling. 

2.  If the fine print states they will reimburse the face value, why add “do not double”?  Stores began offering incentives to the consumer by way of doubling or tripling the face value of a coupon.  Stores attempted to have the manufacturer pay the doubled or tripled amount.  In order to protect themselves, manufacturers placed the “Do Not Double” wording on the coupon to inform stores that they will NOT reimburse for more than the face value of the coupon plus the $0.08 handling fee.

3.  Stores are basically taking a loss on the doubled or tripled part of the coupon.   Why would stores take a loss by doubling coupons?  Stores find it worthwhile to double coupons to bring in customers.  It gives them an advantage in competitive shopping markets.  Further, stores count on consumers purchasing milk, bread, produce, etc. while they’re in the store.  I personally buy my “extras” at stores that offer me ways to save my family money. 

4.  Stores may not accept coupons that state “Do Not Double” for many reasons.  It is not fraudulent to double such coupons because it is meant as a clarification to the store.  However,  we should adhere to each stores policy and enforcement.

* Coupons all have scannable barcodes.  If the barcode starts with a “5” then it will automatically double.  If a barcode starts with a “9” it will NOT double.  Stores that enforce the “Do Not Double” policy will have to manually adjust a coupon that would normally double under their store guidelines.

References/Good Reads:
Southern Savers – Extreme Couponing 101
How Stuff Works
General Mills Redemption Policy
Coupons 101-Do Not Double
Grocery Coupon Guide
The Secrets Behind High Value Coupons

What are your thoughts?

Farm Fresh shoppers:
I’ll let you know once I learn more about the new coupon policy.  I will also pay more attention to my matchups from now on.  I’m also working to get a sneak peak ad that so many of you have requested.  I’m still waiting to hear back from Farm Fresh advertising.