More Grocers Discontinue Doubling Coupons
By Jack Grant
Doubling coupons is fading away as more grocers discontinue this promotional practice to stimulate sales.
Giant Eagle became the latest retailer to end the practice of doubling manufacturer coupons. Kroger’s Milwaukee-based Roundy’s division, which includes the chains Pick ‘n Save, Copps, Mariano’s and Metro Market, also stopped doubling coupons recently.
Why is this happening?
“As our retailer services are primarily for independents and some chains, our clients have not double couponed,” said Ron Fischer, president of Redemption Processing Representatives. “It’s generally the large chains. My assumption is they are discontinuing due to the growth of digital.”
Retailers are only reimbursed for the value of a coupon one time, explained Beth Buresh, President, Intelligent Clearing Network (ICN), a software-as-a-service (SaaS) company that electronically validates and clears paper and digital coupons in real time at the point of sale. The doubling of the offer, historically used to combat competitive activity and price pressures, has always been an out-of-pocket expense for the retailer.
“With the introduction of digital offers, price matching, and other forms of flexible electronic promotions, retailers have other ways to reduce prices to combat competitive activity, reducing reliance on coupon doubling to provide additional incentives,” she said.
Coupon experts expect more retailers to discontinue doubling coupons.
“Grocery retailers do not want to offer double coupon promotions,” said Erik Senescu, SVP of Client Partnerships for Ibotta, a free app that gives shoppers cash back on every purchase. “They feel they have to continue or risk losing customers. As more and more large grocers move away from this practice, it becomes easier for others to abandon this strategy without the risk of losing customers to competitive retailers.”
Jon Robertson, vice president of marketing for ICN, agrees. “As retailers and brands have access to more flexible forms of promotions, the need to double promotion values will continue to decline,” he said “But without the ability to run and execute flexible and complex promotions easily and effectively, some retailers may still have to rely on double coupon practices. ICN can help retailers and brands execute more targeted promotions, quickly and efficiently with no hardware in stores.”
Doubling the value of a coupon has unintended consequences for brands, according to Senescu. Namely, it diminishes brand equity.
“Consumers get accustomed to paying a significantly discounted price for a product, only to have sticker shock when they have to pay full price for the product,” he said. “Many manufacturers coupons offer 20%-30% off the MSRP of the product. When doubled, the consumer is able to purchase products for half of their actual price. So, when a consumer purchases what should be a $4 product for $2, psychologically they associate the value of that product at $2. When they go back to the store a few weeks later to purchase it again but have to pay the full $4 price tag, they don’t believe the product is worth that amount and are far less likely to repeat purchase.”
Brands, retailers and consumers alike find more value in coupon events that are timed with feature price promotions, according to Robertson.
“ICN can help both retailers and brands via our cloud-based promotion execution capabilities, easily execute flexible, complex promotions, instantly discounting promoted products when purchase requirements have been satisfied, no coupon needed,” he said. “For example: buy product A and product B and get product C for free. Promotions are easily set up and executed, using the ICN promotion manager and real-time reporting, available for the retailer and participating brands.”