Most consumers are quite familiar with this form of sales promotion, which offers purchasers price savings or other incentives when the coupon is redeemed at the time of purchase. Coupons are short-term in nature since most (but not all) carry an expiration date after which the value may not be received. Also, coupons require consumer involvement in order for value to be realized. In most cases, involvement consists of the consumer making an effort to obtain the coupon (e.g., access coupon on smartphone app) and then presenting it (e.g., scan electronic coupon) at the time of purchase.

Coupons are used widely by marketers across many retail industries and reach consumers in a number of different delivery formats including:

  • Free-Standing Inserts (FSI) – Here coupon placement occurs loosely (i.e., inserted) within media, such as newspapers and direct mail, and may require the customer to remove the coupon from surrounding material (e.g., clip from newspaper) in order to use.
  • Merchant Printed – A delivery method that is common in many food stores is to present coupons to a customer at the conclusion of a purchase. These coupons, which are often printed either at the bottom of the customer’s receipt or produced as a separate printout, are intended to be used for a future purchase and not for the current purchase which triggered the printing.
  • Customer Generated – Coupons falling within this format require the customer undertake efforts to produce the coupon. An example would be coupons customers print from a manufacturer’s website or email. Another option, and one that is growing rapidly, is for customers to select and load digital coupons via apps on mobile devices. These coupons generally appear along with a barcode image that is then scanned by an electronic reader.
  • Coupon Codes – The internet is also seeing the emergence of new non-printable coupons redeemable during online purchases. These electronic coupons are redeemed when the customer enters a designated coupon code during the purchase process.
  • Customer Loyalty Coupons – Retailers with loyalty programs often permit customers to add coupons to their accounts. These coupons may be manually “clipped” by customers from the retailer’s website, app or email, or coupons may be automatically added to a customer’s account based on their purchase history. Coupons in a customer’s account can then be redeemed when she/he enters loyalty program information during the purchasing process (e.g., displays app loyalty card image to checkout card reader).
  • Cross-Product – This involves the placement of coupons within or on other products. For example, a sports drink marketer may imprint a coupon for its product on the package of a high-energy snack. Also, this delivery approach is used when two marketers have struck a cross-promotion arrangement, where each agrees to undertake certain marketing activity for the other.
  • Product Display – Some coupons are nearly impossible for customers to miss as they are located in close proximity to the product. In some instances, coupons may be contained within a coupon dispenser fastened to the shelf holding the product while in other cases coupons may be attached to a special point-of-purchase display where customers can remove them (e.g., tear off) and use at the checkout counter.