Coupons: The Next Generation

By Sarah Skidmore, AP Retail Writer

PORTLAND, Ore. (AP) — Electronic coupons, arriving by cell phone, Twitter, e-mail and Facebook, are helping generate an old standby's comeback and bringing in new, younger customers.

Many shoppers, especially young consumers like 30-year-old April Englebert, used to reject coupons printed in newspapers and direct-mail booklets as passe or cumbersome.

But Englebert, an accounting clerk in Portland, Ore., was so thrilled when she cut her monthly grocery bill from $500 to $300, mainly with electronic coupons, that she recruited friends and co-workers to try them.

"It's awesome," Englebert said. "There is a lot of free stuff to be had."

Coupon use had been declining since 1992 as consumers found less need for or some embarrassment in using them. But as the economy worsened, frugal became cool and their popularity grew.

Use of electronic discounts and coupons more than doubled in the first half of 2009 compared with the same period last year as overall coupon use rose 23%, according to coupon-processing company Inmar Inc. They now account for more than 3% of all coupons used, up from roughly 2% in 2008.

While they still represent a small part of the total coupons used, they have strong potential — growing quickly and providing a new way for shoppers to stretch increasingly tight budgets.

"It does take some significant outside forces for people to wake up and pay attention to the savings opportunities available to them," said Matthew Tilley, director of marketing for Inmar.

On a recent shopping trip to the grocery store, Englebert tucked a clutch of offers under her tattooed arm. Besides the store's printed circular, there were manufacturers' coupons she'd gotten by e-mail and coupons she'd bought on eBay. Using in-store sales and coupons, she bought 14 items — including macaroni and cheese, meat and other items — for a grand total of $5.98, saving $24.88.

Englebert said she spends about five hours a week hunting for coupons — checking her favorite blogs for the hot deals of the day, searching manufacturer Web sites for special promotions and finding groups on Facebook or through Twitter feeds among other tools. She even hits eBay where something like a $5-off coupon may not be of any value to someone who isn't going to use it but is worth the 99 cents she might pay for it.

(Want to find some online coupons? Read this MainStreet story about the top five sites for great deals.)

Users can print digital coupons from Web sites or e-mail, but many are entirely electronic. They can be uploaded to a store's loyalty card or arrive on a cell phone as a promotion code or image. There are also iPhone applications, handheld devices in stores and screens built into grocery cart handles that alert shoppers to deals in stores. And retailers continue to try new formats.

Electronic coupons offer the same benefits for retailers as any discount program: driving consumer traffic, building loyalty, increasing sales and attracting new customers.

They also eliminate printing costs, reduce paper waste, can be updated more quickly and have higher redemption rates than their print counterparts.

And coupon aggregators such as and Cellfire say online coupon users tend to skew younger and more affluent than the traditional coupon user. Cellfire, for example, says 60% of its users are between 18 and 35.

But technological hurdles remain in syncing electronic coupons with checkout systems and in preventing counterfeiting and hacking.
Many Internet coupons are designed to limit customers to only two per computer, but some users try to find ways around that.

Newer coupons can have serial numbers or a user's name built in so any abuse can be tracked, said Charles Brown, co-chair of the coupon council for the Promotion Marketing Association and vice president of marketing for NCH Marketing Services.

But companies are still figuring out the new dynamics of managing the array of coupons and how fast they can spread.

Marsh Supermarkets had to halt a recent Facebook deal offering $10 off a $10 or more purchase as the coupon spread much further and faster through the social networking site than the Midwest grocer had intended.

"It just went everywhere. We did not anticipate that," company spokeswoman Connie Gardner said. "We would not have issued it if we had known."

Most notoriously, KFC faced traffic jams and overwhelming demand this spring at several restaurants and ultimately offered rain checks to cope with unanticipated demand for free grilled chicken meals offered in a coupon posted on TV talk show host Oprah Winfrey's Web site.
Overall, electronic coupons lack the reach of print because consumers must seek them out — as opposed to finding them in the mailbox or on the front step, Brown said.

Experts say both electronic and traditional print formats are likely to grow, though it will be a while before they match the all-time peak in coupon use of 7.9 billion in 1992. In 2008, consumers redeemed just 2.6 billion coupons of all types.

"When airplanes were invented, trains didn't go away. When TV was invented, radio didn't go away," Brown said. "Various medias work together and reach consumers at different times."

Here are hints on how to stretch your budget with the latest generation of an old standby.

SEEK. Deals are everywhere. Rather than waiting for a coupon for your favorite cereal or toilet cleaner to show up, you can find deals when you want them online.

Dozens of Web sites that are searchable by retailer and product category do some leg work for you. At, and many others, you just click on the coupon you want and print it out. Yahoo's recently revamped is similar but covers such a broad range it can be daunting to search. You can even search and buy coupons on eBay.

Services like deliver the deals you choose to your cell phone or let you upload them to your grocery store loyalty card. Also check the Web sites of companies that make your favorite products for direct offers, and check your favorite retailers' and grocers' sites, especially for deals on delivery or shipping.

STUDY. Numerous Web sites and blogs are dedicated to the art of couponing, finding the best deals and learning new ways to employ them. For example,, which focuses on low-cost food shopping, outlines the policies of specific stores, highlights the best deals of the week, offers tips to beginners and encourages comments and questions from visitors.

New ways of using coupons can yield new results. For instance, if your neighborhood store is having a promotion on your favorite type of yogurt, don't stop there. Search online for store or manufacturer coupons (remembering to look by brand and maker as well as retailer) to combine with the promotion, then check your store's policies to maximize your savings.

SIGN UP. Get your favorite stores' loyalty cards, which offer exclusive deals. At some retailers, cardholders also get additional coupons at the checkout or in the mail based on their purchases. Sign up for your favorite companies' Twitter feeds, check their Facebook pages and get on their e-mail lists for deals. Some retailers offer discounts on a second purchase if you answer a survey online about your buying experience.

SHOP. Know the prices of items you typically buy: Just because you have a coupon good for one store doesn't mean the item won't be still cheaper elsewhere — sometimes without a coupon!

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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