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Extreme Couponing Tip: How the Coupon Redemption Process Works

Ever wonder what happens to those coupons you spent all that time clipping after you hand them to the cashier? Read on to find out!

  1. The cashier scans the coupons in when you pay and generally places them under the cash drawer. Most cashiers are responsible for balancing the money in their till at the end of each shift, and they usually are responsible for counting the value of the coupons in addition to the cash. Although, some cashiers I’ve asked about this say they actually don’t have to count the value of their coupons.
  2. The store manager will collect the week’s manufacturer coupons and then mail them either to the store’s headquarters or straight to a coupon clearinghouse.
  3. Clearinghouses are huge centers where coupon values are scanned and totaled so that stores may receive reimbursement checks from the manufacturer. Over 90% of clearinghouses are located in Mexico. Though mostly a practice of years past, some coupons are even sorted by paid US state prisoners.
  4. At the clearinghouse, coupons will first be sorted by manufacturer or the party responsible for reimbursing the coupon’s value. For example, imagine all of the Procter and Gamble coupons from Kroger being sorted from the General Mills, Kraft, and Unilever branded coupons also redeemed at Kroger stores. Next, the sorted coupons are placed on a conveyor belt where a large scanner totals the value of all those coupons. Clearinghouse workers have to ensure that each coupon is counted. I can imagine that some worker is swearing at me right now for all the coupons that I didn’t cut very precisely!
  5. After all the Procter and Gamble coupons redeemed at Kroger stores are scanned, then a total reimbursement value is determined. The manufacturer will receive the data from the clearinghouse and will then write the check to Kroger: either to the regional office or to the individual store, depending on how the coupons were sent. This whole redemption process generally takes one to two months.
More facts:
  • Manufacturers ask stores to provide “proof of purchase” for nearly all types of coupons. Manufacturers require stores to submit supplier information, product purchase receipts, and product movement reports. Keep in mind that this proof of purchase is from retail stores. Manufacturers want to make sure that the retailer’s customers have redeemed the coupons and that the store is not just cutting Sunday newspaper coupons and submitting them as though redeemed by customers.
  • Manufacturer coupons provide a handling fee, usually around $0.08, which is simply an additional fee the grocer receives for the trouble of accepting a coupon. If a small grocery store handles, sorts, totals, and invoices the manufacturer on its own, that stores keeps the handling fee in addition to the coupon value as reimbursed by the manufacturer.
    • If a store uses a clearinghouse as addressed above, the clearinghouse cost is covered by the handling fee, and the store is reimbursed for the coupon’s face value. Some larger grocery stores still get a portion of the handling fee back from the clearinghouse.

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24 thoughts on “Extreme Couponing Tip: How the Coupon Redemption Process Works”

  1. CG says:

    So, how does the company stay in business if it is reimbursing the stores the money of the coupon? I mean, is it really only 10 cents to make a bottle of deodorant, and they are making a legit killing off the people who pay $5+/bottle?

  2. nydrom28 says:

    Which is why coupons should not be redeemed for the wrong items…. The mfg will most assuredly find out and then they either higher prices at the store or lower coupon values or BOTH! I was at cvs buying gain dish soap with $3 ECB that I had because at 88c it’s a good deal and lady behind me starts chatting with me. I noticed she had about 10-15 not sure it looked like a whole lot, and she had coupons attached to the top of her cart, me being nosy , looked and they were the gain laundry soap coupons! She asked me if I,too, was trying what she had seen on a blog and ‘ getting the soap free’ so I said loudly, since there was 2 cashiers there that the coupons for soap couldn’t be used on the dish soap and that it was improper usage and she shouldn’t try that. Needless to say she cussed at me and left her cart there. For letting the cashiers know they called over manager who said they would have a meeting and they would be calling all the other stores in area and forwarding to corporate so that this doesn’t happen, he gave me a $25 gift card!!!! Wow…..

  3. Shandelle says:

    Very interesting read, thanks for sharing! I had no idea the process was so complicated.

    Looking at other comments, I am so jealous of your stores that double and triple coupons!! I currently live in inner city Chicago and that is not a normal or standard practice here at all, across all major stores. However, I am very lucky to hail from Indianapolis where my family lives and I visit often. I find myself down there roughly every 4 to 6 weeks, so I take advantage of Kroger and Meijer, where they double coups in addition to the prices AND tax being far less.

    Though I did hear a few months ago that Kroger in the Cincinnati area was no longer doubling coupons, which worried my mother that Indy would soon follow suit. She has been faithful to Kroger since before I was born (I turn 30 on Wed!) and said she probably wouldn’t shop there anymore if they stopped doubling coups 50 cents or less.. Meijer is way cheaper and no end of doubling coups in sight for them as far as we can tell.

    • Shandelle says:

      Like a good couponer, I save up all my 50 cent or less coups for my Indy visits. :)

    • Lauren says:

      Where in Indy do Kroger and Meijer double? I live in south Indy near county line and the stores I have been to do not practice doubling.

      • Shandelle says:

        Really?? I grew up on the north side (Westfield / Carmel area) and the Krogers and Carmel Meijer always doubled and still do to the best of my knowledge. My parents moved to Avon a few years ago which is where I shop now and the Krogers and Meijer down there and Plainfield will double coupons up to 50 cents. I think the limit may be only 3 like but they always let me break up transactions and have never complained.

  4. Dannie says:

    Wow, I knew the process was complicated, but not this complicated. I didn’t even know coupon clearinghouses existed haha Thanks for the info, really interesting read! :)

  5. While a store may “break even” on the coupon value, it’s still costing them money to process them. If they do get those extra pennies per coupon, I’m not convinced it’s a money maker. Someone is paid to sort and it does cost $$ to send the coupons to be reimbursed.

  6. Anonymous says:

    This article seems to confirm my idea that stores break even or actually make money from accepting coupons, right? On the rare occasion that a store clerk is openly annoyed with my couponing and I feel bad for using them, it helps to remember this.

  7. Anonymous says:

    What about coupons for free items. How are those reimbursements determined? For example, I had a coupon for free Crystal Light up to $4.00 and redeemed it last weekend at Target. The Crystal Light was only $2.69 and a full $4.00 came off my bill (I didn’t realize this until I was at a traffic light looking at my receipt about 5 minutes after leaving the store.) Will Target be reimbursed $2.69 or $4.00? How does the clearinghouse know that their price point is $2.69?

    • KJS916 says:

      Target most likely has to let them know how much they were selling the item for and will receive only that amount. The proof of purchase they present will show that. Technically, you should have only received the $2.69 off your bill since those types of coupons should be done manually.

      • Anonymous says:

        Thank you. This is a very interesting subject. At which point in the process above is the proof of purchase presented? That leads me to a few more questions if you don’t mind me asking.
        When a customer purchases an item with a coupon and subsequently returns it, the store usually (and should) only reimburse the actual purchase price (after coupon). I’m sure that the store doesn’t go find the coupon that was used and pull it so does the clearinghouse also receive the coupon and does the store get reimbursed?
        Also, I’m wondering for stores that allow overage, since the actual purchase price could be less than the coupon, wouldn’t they need to be reimbursed for the full coupon value? For example, product is $1.00, coupon is for $1.25 and they give you .25 back. Then they submit the coupon for $1.25 but the purchase price was only $1.00. Do they get the full $1.25 back or do they only get $1.00 and eat the .25?

        • Shandelle says:

          I would guess they still get reimbursed because they have a record of the initial sale. Besides, someone could return something up to 60 or 90 days out (high unlikely with food items but still), which is well beyond the store having sent them off to receive credit.

          When I have returned stuff, they just reimburse the purchase price almost all of the time which is fine with me.. If I wanted to retain credit for the coup, I’d have done an exchange anyway.

          No idea about your second question. No stores in Chicago allow overage unless a cashier just overrides it and isn’t paying attention to why it beeped at the register.

  8. Sandbear says:

    Can Albertsons still double coupons that say “do not double?” I have two Albertsons near me and I went to one in my town and they say they do not do that anymore. Then a couple days later I went to the other one and the cashier even pointed out to me that-”they are manafacturer coupons, so you can double them.” Who is correct?Thanks for replying!XD

    • Sheryl says:

      Alberstons was taking the double coupon amount out of their own pocket. You double $1 and they get $1 from manufacture and the store takes the $1 you just doubled out of their own pocket. It Doublers are Albertsons are rumored to be no more since they were bought out by new owners.

  9. Chloe12 says:

    I have two questions:

    1. If a store doubles a coupon and absorbs the cost, then why do some manufacturer coupons say “Do Not Double”? Wouldn’t that be up to each individual store?

    2. Recently, I had situation at Kroger where they wanted to change the value of a $3/1 BIC manufacturer coupon to $2.79 (the purchase price), stating that they would not be reimbursed the full $3. Is that correct?

    • Chickenwang555 says:

      Krogers does not allow overage. That is a store policy that will override the manufacturer’s amount off. As for your first question, I am hopping in the same boat as you! :D I’m so curious about doubled and tripled coupons.

    • Dee says:

      Some manufacturers do not want the consumer to “get used” to purchasing a product at a seriously-reduced price below their usual-and-customary retail purchase price, so they indicate “Do Not Double” and/or otherwise code their coupon not to double. For example: if I as a consumer get used to buying Colgate toothpaste for, say, 50 cents by using a doubled or tripled 75 cents coupon, I’m more likely to think that their $3 retail price is “unfair”, and am less likely to purchase it later, after all their coupons and promotions have been scaled back.

  10. Chickenwang555 says:

    When a store doubles a coupon, who pays for it?

    • Drew says:

      That is a store promotion most of the time, so the store will basically absorb that cost. They do not get the double values back from the manufacturer.

    • Wildflower says:

      This is the exact question I wanna ask. :)

    • James says:

      It’s why a lot of couponers who have stores that double/triple coupons hate the dreaded “Do not double or triple” stipulation. Stores offer the double/triple promotions as a way to get customers to go to them instead of another store whereas the manufacturer hopes you choose their product because you’ve got a coupon.

      I live in Washington, DC where 4 stores double on a daily basis and one (Harris Teeter) holds special super double/triple events throughout the year. So, we tend to get lower value insert q’s ($0.50/1 becomes $1/2; $.55/1 becomes $1/1) because the manufacturers knows that. I’ve recently started ordering higher value q’s because I’ve grown tired of this.