Have you noticed all that coupon fine print on the coupons you use? Ever wonder what it all means, and how you can use them to maximize your savings?
I use coupons like money.
The more coupons I use, the less money that I have to take from my wallet.
In other words, coupons supplement my income.
Since I'm super into coupons (and a money geek), I decided it was time to talk about what all that coupon fine print means. What does “limit one per household” mean versus “limit one per person”? Do stores lose money when they accept coupons?
How did coupons start?
When I started to research all-things coupon fine print, I got even more fascinated in the subject.
Let me share with you what I've found + have learned from experience!
- A Brief History of Coupons
- Coupon Fine Print
- How Do Store Coupons Work?
- Do Stores Lose Money on Coupons?
- Coupon Wording Examples
- Limit One Coupon Per Household
- What Does Limit of 4 Identical Coupons Mean?
- What Does it Mean to Limit One Coupon Per Purchase?
- Limits on Number of Coupons Used Per Transaction
- Limits on Number of Transactions
- Prohibiting Auctioning of Coupons
- Prohibiting Use of Coupons on Products Intended for Resale
- Limiting Cashiers Paying You
- Funny Coupon Fine Print
A Brief History of Coupons
It turns out, coupons have been in use for over 110 years, starting with a handwritten ticket for a free glass of coca-cola in 1894. Over 8 million free glasses were given out during that inaugural coupon campaign!
Dare I say that coca-cola became a mainstream product because of coupons?
Clipping coupons became mainstream in the 1930s with the Great Depression and peaked by 1965 with 50% of households using them.
That's really interesting, considering that a Nielsen study that took place in the midst of the recession (September 3, 2009) found that only 35% of US households use coupons.
And while historically people who needed help with bills used to use coupons and the affluent found them to be below them, the affluent are now the biggest class of coupon users.
Coupon Fine Print
There is a lot of fine print on coupons.
Before I put in all the research to find out what some of the nitty gritty means, I used to only look at the date to make sure it was not expired, the face value to see if I can get it doubled or tripled, and the product size to avoid any issues at checkout.
But what about the rest of that fine print?
How Do Store Coupons Work?
It turns out that stores treat coupons like money as well…because they are.
Large retail chains collect millions of dollars worth of coupons each week and have devised a system to get their reimbursements from the manufacturer, who ultimately pays for the cost of the coupon campaign.
Here's what the process looks like:
- Typically chain stores will send their coupons via mail to their headquarters after counting up their cash drawers (they include the value of all coupons collected in their count of cash).
- At headquarters, the coupons remain separated by store, and are shipped to a third party clearinghouse for sorting.
- The sorted coupons are then sent to the manufacturer with an invoice.
- The clearinghouse is paid a shipping and handling fee as well as a certain amount of money per coupon for their sorting work.
- The store is reimbursed the value of the coupon, plus a shipping and handling fee by the manufacturer (typically 8₵).
While researching this, I was amazed at how much processing and handling is involved with redeeming coupons. According to a white paper published in April 2007 by ScanAps,
“Coupons are the only cash instruments that are still counted, processed, settled and cleared manually. From the time a consumer submits a coupon to a cashier in the store, an average of eight pairs of hands physically touch every coupon before it is finally shredded and the retailer is reimbursed.”
I was also shocked at all of the different types of fraud involved at each point of this eight-hand process.
Pssst: Check this article out for my in-depth look at common types of coupon fraud, and individuals/groups that have incurred jail time + penalties for their crimes.
It's estimated that coupon fraud costs businesses, collectively, between $300 and $500 million per year.
Even so, do stores lose money on coupons?
Do Stores Lose Money on Coupons?
Coupon fraud aside, if stores accept coupons, do they lose money?
Let's turn back to the coupon fine print to answer this question.
Look at any coupon, and you'll see similar language to this:
“Retailer: We will pay you the face value plus 8¢ handling for each coupon sent to [address]”.
So, as long as the store accepts coupons according to their terms, then they will still bring in money when people use them on a product.
Coupon Wording Examples
Have you taken a look at your coupons lately?
I mean besides just to see which ones you want to clip and use and which ones to pass on? I did recently and found some very interesting new language included in the fine print section of several coupons. I am not sure when the new print showed up, but as a frequent coupon user I can assure you that these changes have not been around for long. In fact, most of them seem to be in direct response to TLC’s Extreme Couponing show.
Thanks to some sour grapes in the consumer bunch and to the millions in lost sales due to the recession, manufacturers have added substantially to the fine print in coupons.
There is so much legalese on these little pieces of paper now that one must wonder if they are buying a loaf of bread or leasing a car.
The new coupon fine print can be summed up in a few categories:
- limits on the number of coupons used
- limits on the number of transactions made
- prohibiting auctions of coupons
- prohibiting use of coupons for products you intend to resale
- limiting cashiers paying you money
Limit One Coupon Per Household
You'll see the following language on some coupons now:
“Limit of one coupon per household per day”
This is a usage limit and it means that only one of each type of coupon can be used per household each day (meaning, if you use a $0.35 coupon to purchase Colgate toothpaste on Monday, then your kids/spouse/live-in mother -in-law cannot use the same coupon again until Tuesday).
Basically, it's trying to combat couponers who have several (or 50) of one type of coupon from using them by handing them out to his/her family members who then can do separate transactions.
Speaking of transactions…
Limit of one Coupon Per Purchase: This does not mean per transaction, but per item. In other words, you may use one manufacturer coupon per product. If you have five products and five manufacturer coupons, you can use all five coupons in the same transaction. Please note that you can still use a store coupon in addition to your manufacturer’s coupon for one product.
Void if Copied, Sold, Exchanged, or Transferred: It turns out that there is a lot of fraud with coupon use from consumers, cashiers, stores, and clearinghouses (see below for the role of clearinghouses in all of this). One of the ways that consumers fraudulently use coupons is by scanning them and making copies on glossy paper that look like the originals. This is so prevalent (costing retailers and manufacturers an estimated $300-$500 million per year) because the barcodes on the Sunday paper coupon inserts are generally not unique. Another question with this fine print is whether or not it is legal to sell your coupons on sites such as eBay? See below.
Cash Value: Most coupons state that they have no cash value, or have a cash value of 1/20₵. It is illegal to sell something that has no cash value. So how do people and auction sites such as eBay get around this? Clipping coupons and selling them takes time, and so people actually sell their time as a service rather than sell the actual coupons themselves. EBay coupon auction listings typically include a statement that specifies that the coupons are free and the bidder is paying the seller for the service of procuring, clipping and compiling the coupon sets. Checkout eBay’s policy on selling coupons.
Do Not Double: Most coupons have instructions to not allow the doubling of their coupon. However, if the coupon barcode begins with the number 5, and your store doubles or triples coupons, then your coupon will act accordingly. If the coupon barcode begins with the number 9, then it will not double.
Retailer: The rest of the information on the coupon is directions for the retailer on how to redeem the coupon for reimbursement. This will include an address, the amount of shipping and handling or processing fees they will receive, etc. See below for more information on these terms.
What Does Limit of 4 Identical Coupons Mean?
If you see “limit of 4 identical coupons” in your coupon's fine print, then keep reading. You need to know if this means limit of 4 identical coupons per visit, per day, per transaction, per customer, or per person.
Lots of different options here!
What Does it Mean to Limit One Coupon Per Purchase?
Per purchase is different from per transaction. A purchase is each product within a transaction. The transaction is everything that is on the receipt you're given in the end.
So, what it means to limit one coupon per purchase is you can use one coupon per product in your entire transaction.
Limits on Number of Coupons Used Per Transaction
Your transaction is everything that is on one receipt.
It used to be that you could use one coupon per product per transaction. So if you wanted to purchase five bottles of mustard and use five coupons for mustard, this was legal.
If you have been watching TLC’s Extreme Couponing, you know by now that some people really have taken advantage of this one by either purchasing coupons online or otherwise gathering a large amount of them and then doing something crazy like purchasing an entire shelf of mustard and using 70 coupons in one transaction.
You'll see many coupons, such as P&G coupons, that now have the following coupon fine print:
“Limit of 4 Like Coupons in same shopping trip.”
P&G is not the only company to come out with this language; Colgate coupons now have similar new fine print:
“No more than four (4) coupons for the same product in same transaction.”
Ensure® released a coupon that states,
“Limit 1 coupon per transaction.”
Limits on Number of Transactions
The above language will help with the situation, but the obvious legal way around it is to separate your load into separate transactions — most cash register clerks are happy to oblige but it is a hassle for consumers and creates a long line.
Even so, extreme couponers will most likely not be thwarted by this (that’s right; don’t be surprised if you see one person in front of you with ten different transactions in the near future, and it won’t be me!).
In order to counteract this, some coupons are explicitly stating how many transactions per person are allowed with a type of coupon. For example, Scotch-Brite™ issued coupons for $1.00 off sponges with the following fine print:
“You can only redeem one coupon per day.”
Another way to say this same thing that you'll see in coupon fine print is:
“Limit one coupon per visit.”
Prohibiting Auctioning of Coupons
Coupons have always stated that they are not to be sold. However, sellers on eBay have gotten around this by stating that they are selling their time (by clipping the coupons for you).
As mentioned previously, eBay even has a policy that allows for the auctioning of coupons (you can only sell up to $100 or 25 valid, unexpired, original coupons per month). I bet there is a lawsuit in the works for this from manufacturers, as eBay clearly states this policy on its website.
In the meantime, coupons are now adding in language about auctions. P&G coupons now state explicitly that the coupon is
“Void if transferred, sold, auctioned, reproduced, or altered from the original.”
Prohibiting Use of Coupons on Products Intended for Resale
Have you ever been to a yard sale where the owners seem like they are running a drugstore? Or have you seen the toiletry lots auctioned off on eBay? These are from people who have couponed to get the product at a discount (or free) and then are reselling that product for a profit. P&G’s coupons now expressly prohibit this practice. They state,
“Coupons not authorized if purchasing products for resale.”
Limiting Cashiers Paying You
It is rare but entirely possible to have a cashier actually pay you money after you “purchase” a product. This occurs when the transaction total is negative due to sales and coupons (I have had this happen to me perhaps two times). It is called “overage” and typically gets absorbed from other products you have in your transaction (for example, if you have overage of $0.15 from purchasing a bottle of mustard, but you also are purchasing bread, than $0.15 will come off of the price of the bread). While this may sound like a scam in and of itself, it makes sense because the retailer will be reimbursed for the face value of the redeemed coupon (plus a shipping and handling fee of typically 8₵). If they don’t refund you the overage, then they are scamming the system.
Scotch-Brite’s ™ coupon now expressly prohibits this. It states,
“if a product costs less than face value of coupon, consumer is not entitled to any money back.”
Funny Coupon Fine Print
Did anyone else get sick and tired of hearing about all the sales and clearances during the Recession?
I never thought that statement would come out of my mouth, much less from my keyboard, but sales and clearances are being overdone. Most stores began using these on a daily basis, and so they've kind of lost their glamor.
I am under the impression that merchandise and services cannot be “on sale” or “on clearance” all the time, so it leads me to the conclusion that prices are being artificially inflated to begin with so that a respectable percentage can be taken off during the sales campaign and the consumer feels as though they are getting a good deal.
This practice has obviously been around before, but it seems to be everywhere since the beginning of the last Recession.
“Sale” and “Clearance” are used so much that unless you are having one of these, you can’t even compete among consumers — these words have become a cost of entry to the marketplace.
Since products and services cannot possibly be on sale or on clearance all the time, stores are finding ways to use these buzz words to attract consumers, but restrict their profit losses by adding in robust fine print language (check out other supermarket tricks for how to get consumers into their stores, and spending more money).
Not only that, but some funny coupon fine print — that is super restrictive and kind of ridiculous — came out of this time period as well that I'd like to share with you.
- Macy’s Exclusions on 15% Off Sale: Macy’s has had more “one day” sales in the last few years than I care to count! Even though they seem to be quite generous with their sales, they are notorious for excessive exclusions. In this coupon from 2011, they're offering 15% off select departments…and honestly I don’t know which departments are left after this list of exclusions. From their website, this sale “EXCLUDES: 7 For All Mankind, Asics, Birkenstock, Born, CWX, Coach, Converse, Chantelle, Donatella, Ed Hardy, Emporio Armani, FitFlops, Goddess, Joe’s Jeans, Lacoste, Levi’s®, Minnetonka Moccasin, Nike footwear, Puma footwear, Reebok footwear, Skechers Shape-ups, Sofft, The North Face, Tretorn, Va Bien, baby gear, kids’ shoes, toys, cosmetics & fragrances, sunglasses, Sunglass Hut, select fashion jewelry & watches, gift cards. FOR HER: bridge & designer handbags, B.Tempt’d, DKNY lingerie, Dolce Vita, Donald Pliner, Felina, Impulse, Jezebel, Lauren by Ralph Lauren, Le Mystere, Lunaire, MICHAEL Michael Kors, Naturalizer, Not Your Daughter’s Jeans, Sperry Top-Sider, Wacoal. FOR HIM: Armani jeans, Cole Haan, Dockers®, Ecco shoes, Hugo Boss, Johnston & Murphy, Polo Ralph Lauren, Tommy Bahama. FOR THE HOME: All-Clad, J.A. Henckels, Le Creuset, Tempur-Pedic, Tumi, Wusthof, furniture, mattresses, rugs, lamps & lighting, electrics & electronics, regular-priced china, silver & crystal. Savings do not apply to Everyday Values, jewelry specials, Jewelry Super Buys, Specials, web busters™…”
- Shoes.com Sales: I found the following caveat for Shoes.com sales (from a 25% off sale for boots and shoes): “All discounts, price matches, coupon and promotional codes, including the Friends and Family program, exclude bags, wallets and all regular-priced merchandise from the following brands: Adidas adistar Raven, Adidas Barricade 6.0, Adidas Supernova, Born, Born Crown, Brooks, Clarks England, Dr. Tuxedo, Dyeables, Frye (certain styles**), Hunter, Jonathan Kayne, Keen, Kork-Ease, K-Swiss, Livie & Luca, Liz Rene, Mephisto, Merrell, Minnetonka, Morgan & Milo, Olukai, Reebok Classic, Reebok Princess, Reebok RealFlex, Reebok Zig, Sofft, Softspots, Touch Ups, UGG Australia and Vintage Shoe Co.” On top of this, the following brands are excluded from all promotions: “Belted Harness, Campus, Dakota, Engineer, Harness, Heath, Jane, Jayden, Jesse, Melissa, Paige Tall and Veronica Slouch.” This is a total of 43 brand exclusions from a sale that is supposed to be for all boots and shoes.
- PetSmart Sale Shipping Exclusions: On January 1, 2011 I was looking on the PetSmart website to price cat products (cat litter, dry food, and wet food). I had a coupon to use, and saw an advertisement from them stating that shipping was $5.99 on orders of $60 or more. I thought I could save myself a trip to the store. However, in the terms and conditions of the deal, it read: “$5.99 shipping offer excludes purchases of dog food, cat food, cat litter, heavy items, or materials requiring special handling.” Even though I knew I was getting a really good deal with such a low shipping cost on heavy items, I thought it was kind of crazy for the exclusion of what the majority of people go to PetSmart for: cat food, dog food, and heavy pet items (and what is the definition of ‘heavy items’ anyway?). What probably happens is people do not figure this out until they are in checkout, and by then they don’t feel like emptying the cart and finding another website for shipping savings.
It is not likely that “sales” and “clearance” advertisements will end any time soon. After reading all of the exclusions above, I think that stores should start listing what is included in the sale or clearance instead of what is not. If nothing else, the fine print would shrink a bit.
Have you seen any new language lately in your coupon's fine print?