There's been quite a bit of discussion this week as to whether or not shoppers should receive the full face value of a coupon regardless of product costs. This money in question is called "Overage".Overage: The surplus or excess value of a coupon over the cost of a product purchased.
For example, if Purina Beneful Entrees only cost $0.99 but you have a $2.00/1 coupon there is $1.01 of overage money up for grabs. So who actually gets the $1.01 is the million dollar question - should the store override the coupon and only give shoppers $0.99, making the product free, or should stores give shoppers the full $2.00?
First, I should explain my understanding of how coupons are redeemed.
1. Manufacturers use advertising dollars to run a discount coupon on particular products via a consumer marketing agency like NewsAmerica or Valassis.
2. Coupons are printed in weekly inserts and delivered via Sunday Newspapers.
3. Shoppers redeem coupons at local grocers and retailers.
4. Coupons are manually added up nightly, bagged and sent to corporate offices weekly, re-bundled by store (literally thousands of coupons) and sent via snail mail to coupon clearinghouses stateside or overseas and can be "in-house". Handling fees are paid to process all coupons.
5. Coupons are either sorted by manufacturer and weighed, or sorted and scanned via high tech conveyor belts to verify store calculations are accurate. Up to a 100% hand count can be performed if necessary to weed out fraudulent or damaged coupons. Submissions are typically processed within one week of receipt.
6. Clearinghouses can then pre-pay grocers and retailers the estimated FULL FACE VALUE of the coupons plus handling fees, thus the extra $0.08 given to stores per coupon to cover any sorting costs, postage etc. or disperse payments after they have been paid by the actual manufacturer. FYI - stores are not really getting "paid" the extra $0.08 when you use a coupon, they're just covering their own processing costs.
7. Coupon clearinghouses then submit the coupons to individual manufacturers for reimbursement.
8. Manufacturers can accept the invoiced coupons or contest coupons they deem fraudulent, ie... photocopied printable coupons. Deductions are then made from invoices and this deduction is taken out of grocer and retailers checks or charged back to the stores if payment has already been received. Stores can also contest deductions not be taken if they feel they are in the right. The total process from start to finish can take up to 6 months.
In my understanding, grocers and retailers are reimbursed the full face value of coupons redeemed in-store, regardless of how much an item costs. Also, most corporate coupon redemption policies state in one way or another: "Coupons are redeemable only by a consumer purchasing the specific brands, product(s), quantity and sizes stated on the coupon, with the face value of the coupon deducted from your retail price." Hormel Redemption Policy, Chicken of The Sea Redemption Policy (there are hundreds more I could cite, but they all say the same thing). These policies indicate to me that the full face value of a coupon should be given to shoppers regardless of the cost of the item purchased - in other words, the shopper would "make money" on the Purina Beneful deal.
However, in many instances grocers and retailers adjust coupon values down to only cover the cost of a product and keep the overage for the store. While I would love to get the overage for myself, and I often do, ultimately it is up to the individual store to decide how they will handle this situation (for now). You can't fight the cashier and win on this one! I believe as more and more retailers begin to truly understand how coupons work, shoppers will finally be given the "extra credit" of coupon surplus. It is also worth writing to corporate grocer/retailer offices or manufacturers whose coupons are in question to politely, but firmly, explain your position. But for now, we'll just have to take it when we can get it and remember that at least we got the product for free - and free is my favorite word :-)
Overage Tip: Stores won't pay you money to take food out of the store. By law, shoppers are required to pay sales tax for all items purchased so nothing is ever truly free. If you feel you might be given overage make sure the store won't owe you money in the transaction. Use small filler items, or bread and milk purchases, to absorb any excess coupon funds, thus "making money" on the deal!
Coupon Redemption Process:
1. Manufacturers use advertising dollars to run a discount coupon on particular products via a consumer marketing agency like NewsAmerica or Valassis.
2. Coupons are printed in weekly inserts and delivered via Sunday Newspapers.
3. Shoppers redeem coupons at local grocers and retailers.
4. Coupons are manually added up nightly, bagged and sent to corporate offices weekly, re-bundled by store (literally thousands of coupons) and sent via snail mail to coupon clearinghouses stateside or overseas and can be "in-house". Handling fees are paid to process all coupons.
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| Coupons are sorted on conveyor belts |
6. Clearinghouses can then pre-pay grocers and retailers the estimated FULL FACE VALUE of the coupons plus handling fees, thus the extra $0.08 given to stores per coupon to cover any sorting costs, postage etc. or disperse payments after they have been paid by the actual manufacturer. FYI - stores are not really getting "paid" the extra $0.08 when you use a coupon, they're just covering their own processing costs.
7. Coupon clearinghouses then submit the coupons to individual manufacturers for reimbursement.
8. Manufacturers can accept the invoiced coupons or contest coupons they deem fraudulent, ie... photocopied printable coupons. Deductions are then made from invoices and this deduction is taken out of grocer and retailers checks or charged back to the stores if payment has already been received. Stores can also contest deductions not be taken if they feel they are in the right. The total process from start to finish can take up to 6 months.
In my understanding, grocers and retailers are reimbursed the full face value of coupons redeemed in-store, regardless of how much an item costs. Also, most corporate coupon redemption policies state in one way or another: "Coupons are redeemable only by a consumer purchasing the specific brands, product(s), quantity and sizes stated on the coupon, with the face value of the coupon deducted from your retail price." Hormel Redemption Policy, Chicken of The Sea Redemption Policy (there are hundreds more I could cite, but they all say the same thing). These policies indicate to me that the full face value of a coupon should be given to shoppers regardless of the cost of the item purchased - in other words, the shopper would "make money" on the Purina Beneful deal.However, in many instances grocers and retailers adjust coupon values down to only cover the cost of a product and keep the overage for the store. While I would love to get the overage for myself, and I often do, ultimately it is up to the individual store to decide how they will handle this situation (for now). You can't fight the cashier and win on this one! I believe as more and more retailers begin to truly understand how coupons work, shoppers will finally be given the "extra credit" of coupon surplus. It is also worth writing to corporate grocer/retailer offices or manufacturers whose coupons are in question to politely, but firmly, explain your position. But for now, we'll just have to take it when we can get it and remember that at least we got the product for free - and free is my favorite word :-)
Overage Tip: Stores won't pay you money to take food out of the store. By law, shoppers are required to pay sales tax for all items purchased so nothing is ever truly free. If you feel you might be given overage make sure the store won't owe you money in the transaction. Use small filler items, or bread and milk purchases, to absorb any excess coupon funds, thus "making money" on the deal!
What do you think? Should stores give customers the overage or keep it for themselves?
I had someone tell me once that if a store is audited that they can get in trouble for not giving the full value of a coupon. Have you heard this before? Do you know if it is true?
ReplyDeleteI love getting the overage, but stores seem to be getting pickier about how they redeem your coupons. On a side note, Walmart would not take my Smart Source coupon (1.00 off vinegar-can't think of the brand right now) because it did not have the "third" barcode on the top right. That was frustrating.
ReplyDeleteI think the customer should get the overage!!! Thanks for posting this. I can't wait until 'more and more retailers begin to truly understand how coupons work.' There are a couple of stores near me that almost always give me overage, and I go there first!! They get my business instead of the other stores that don't give me overage!!!
ReplyDeleteDefinitely the customer. If it's the store, they end up getting paid twice for that product. I pay for the coupons, and they are incentive to buy that product. I'll take it - thanks!
ReplyDeleteI went to smiths the other night and i was paid .03 and had 3 bags of groceries. At the bottom of the receipt it said i saved 102%. i thought it was strange the cashier gave me the pennies and told me to have a good night.
ReplyDelete