Grocery coupons — who benefits?

Press, 26 October 1982, Page 20

Grocery coupons — who benefits?

Consumer watch

Anne Ingram

Ever heard of a "coupon swap meet?” American housewives hold them in order to swap grocery coupons they don’t intend' to use themselves. Then there are "refunding newsletters." more than 60 of them, that give nationwide "refund offer” information. The housewife pays a subscription of about 's7 a year and in return is given' the brand names of items offering refunds, details including how much each refund is worth, where to find the coupons and where to use them. "Couponing" is big business in the United States. Last year over 1000 companies’ distributed 90 billion coupons, representing a total face value of $500,0w.000. Yet only four billion of these coupons were redeemed. Those who cashed theirs in were probably a small percentage of the population — zealous "refunders" who collect every available coupon, swapping those they don’t need for ones they will use, and keeping them in an expandable file in product groups or by date expirations. Apparently such zeal pays off. One Mississippi housewife collected $B4 worth of

groceries for which she only paid 40c. Even the most diligent “refunders" couldn't hope to equal that saving in New Zealand. And most of us. I suspect, rarely bother to cash in our coupons at all. How many “20 cents off" and "10 cents off" coupons have you got stowed away in that’hold-all drawer? Perhaps a good many of them have expired anyway. Yet coupons can be an excellent aid in trimming the grocery bill each week — as long as you are buying what you need. Why pay $1.20 for that toothpaste when can have it for $l. There are basically two

sorts of coupons — those issued by the manufacturer, and those issued by the supermarket. Those that arrive in the mailbox come from the manufacturer who wants you to try a new product, or a product that has been changed or improved in some way. Frequently these coupons give a generous discount on the product and are valid for several months. Usually the new product is a good one that the manufacturer hopes you will like sufficiently to buy again. Coupons promotions are expensive, so the manufacturer would hardly spend that money on a product in which he didn't believe. Some of these promotions will help the manufacturer with his market research. A "40 cents off" coupon distributed recently, offers the consumer the choice of cashing in on one of two types of coffee. The cashed in coupons will point out the favourite. Manufacturers’ coupons also turn up on the outside of packets in the supermarket. Then there are the offers for refundable vouchers if you collect so many packet tops or labels. These are clearly designed to en-

courage the consumer to buy up large quantities of a product. or to try out the whole product range. The manufacturer may be trying to discover which is the most popular within a range. One biscuit manufacturer is presently offering a $2 voucher towards the purchase of'tea. coffee, or fruit juice if you send off the labels of three different varieties of a certain type of biscuit. When the promotion expires. I wonder how many of us will continue to buy the biscuits. According the market researchers in the United States, coupons and vouchers are only a short-term incentive to buy a particular product — they are a means of renting the consumer for one purchase only. Next week’s coupon for a different brand of biscuits will be used because it brings the price of that commodity down. If a manufacturer's coupon is used in conjunction with a supermarket special, then it can provide quite a substantial saving. In the past, some stores refused to accept coupons on “special" items but now the consumer is actually encouraged to cash

in on a double saving. Indeed, the retailer will not lose out - the manufacturer refunds the coupon in full as well as providing a "handling fee." Supermarket coupons often constitute a saving of more than a dollar on the recommended retail price of an item. In practice, the saving is unlikely to be this great as supermarkets sell most of their goods below the suggested price anyway. In-store coupons are usually valid for one week, and are redeemable only at a particular supermarket chain. They provide the retailer with a cheek on the effectiveness of his advertis-. ing. as the number of coupons collected by the check-out operators will give a guide as to how many shoppers read his advertisement. Supermarket coupons are bait to entice the buying public so to be effective at hooking customers they must be redeemable on useful everyday products or desirable speciality products. One large’ supermarket «chain has recently distributed a booklet containing over 100 coupons, which, if they were all redeemed, would save the consumer $2O. This is a month-long

offer, and may be sufficient incentive to attract customers away from their usual store. If so. this chain will benefit from increased sales not only of the couponed items where the profit will be small, but of the other groceries on our list which sell at the usual price and are substantially more profitable for the retailer.

But will the cost-conscious consumer continue to buy from this supermarket chain when the book of coupons has expired? Or has the housekeeping money only been rented for a month? Those who are loyal to a particular store and who always buy the same brand of tea. coffee, or toothpaste will not be swayed by coupon promotions. But for those consumers who try to extract every last bit out of their grocery dollar, coupons will be clipped and cashed in. For while the retailer may use coupons to attract more buyers into his store and the manufacturer uses them to stimulate sales of his product, it is the consumer who derives the most benefit from “couponing." Like a fickle lover he or she can accept the best offer going at the time.