You recently wrote about stores getting reimbursed by the manufacturer. As a long-time couponer, it's interesting to learn about couponing from the store and manufacturer's ends. I am very interested in how this reimbursement works. Do the stores hire people to submit coupons to each manufacturer? How many people do this per store? How often do they submit? Consumers never see this behind-the-scenes process and I'm very interested. I hope you know the answers!
Kaori makes an excellent point. Consumers don’t often get to peek behind the curtain of how coupon redemption actually works. We cut our coupons, hand them to the cashier, enjoy saving some money on what we’re buying and then... what happens next?
If you’ve ever looked at the fine print on a manufacturer’s coupon (and if you’re a serious couponer, it’s likely that you’ve perused all of those legal details in the nearly-microscopic print at one point or another), you may have noticed that there’s a physical mailing address. Your coupons can be sent back to the manufacturer and the manufacturer will reimburse the store for the value of the coupons.
But does someone really sort through the thousands of coupons a store receives each week and mail them to each individual manufacturer? Usually not. This would be a labor-intensive process that would necessitate the store devoting its own staff to sorting and redeeming coupons on an ongoing basis. Instead, most stores utilize the help of a coupon clearinghouse or redemption center.
Stores collect their coupons and box them up. If the store is part of a chain, each individual store may send their coupons to the store’s corporate office first, which combines each of the stores’ coupons together into a larger shipment. Then, the coupons are sent to the clearinghouse. At the clearinghouse, the store’s coupons are sorted by manufacturer and product. This is usually done via an automated system that utilizes both digital scanners and conveyor belts. Once the clearinghouse has sorted and scanned the coupons, they total up the value of the money due to the store from each manufacturer.
At that point, the clearinghouse sends an invoice to each manufacturer for the value of the coupons that is owed to the store. Then, depending on the clearinghouse and its arrangement with the store, the clearinghouse will pay the store for the value of the coupons, or each manufacturer can send payment directly to the store for the value of that batch of coupons.
If the manufacturer believes the totals being submitted are not correct, they can request an audit. Then the store must provide proof that they had and sold the quantities or volume of items that coupons were being redeemed for. (Years ago, a common form of coupon fraud was “clipping rooms” where less scrupulous stores would clip unused coupons from leftover newspaper inserts, and then submit them for redemption.)
Along the way, if there are any counterfeit or fraudulent coupons, they are pulled from the line and not reimbursed. These coupons are kept on file (in many cases for a year or more) at the clearinghouse and a fraud investigation may be opened. Photocopied coupons receive a similar treatment – the store does not get reimbursed for these. (Another reminder never to photocopy coupons.)
You might wonder who pays the clearinghouses for their services. Again, the answer lies in the fine print of your coupons. Coupons contain a statement similar to, “Manufacturer agrees to reimburse the face value of this coupon plus .08 handling fee.” If the store chose to reimburse its own coupons without the help of the clearinghouse, they would keep the entire .08 handling fee. When a store seeks the assistance of a clearinghouse, the clearinghouse takes some (or all) of the handling fee in exchange for its services.
There’s a lot going on behind the scenes, isn’t there? That little piece of paper takes quite a journey once it leaves your hands at the store.