Do Coupons Still Make Cents?

Is the American public cutting out its use of coupons?

A recent study on last year’s coupon use suggests that U.S. consumers are snipping out pennysavers less than ever before, prompting fears that the age-old pastime of sitting at the kitchen table with scissors and the Sunday paper may be well past its expiration date.

A study by NCH Marketing Services, an Illinois-based coupon clearinghouse, found that the percentage of regular coupon users in America has dropped to 21 percent in 2001, from 22 percent in 2000 and 25 percent in 1999. Only 51 percent of consumers agree that coupons "save them a lot of money." And, of the 239 billion coupons distributed by the consumer packaged goods industry in 2001, only 4 billion were redeemed – a significant 11 percent drop.

The reason for the decline is a combination of marketing missteps and changing consumer habits, experts said. Companies, for example, had begun relying more and more — about an annual 1 percent increase for the last five or six years — on multiple-purchase coupons, which would require customers to buy more than one of a product to get the savings. That translated to fewer savings and more hassle for customers, who finally became fed up with the gimmick.

"I think it just reached the breaking point where it was too much last year," NCH marketing Vice President Charles Brown said.

There was also coupon vendors’ increasing use of full-color inserts in Sunday newspapers. Although the vibrant colors proved attractive to consumers at first — especially for food products — the public has tired of them, according to Phil Lemper, of and author of Being the Shopper.

"The problem with the inserts has been that it took a lot of other non-food products like princess dolls, address labels and checks, where it used to just be grocery products — and that’s what people look for," he said.

Ultimately, the Sunday inserts became marketing’s shotgun method, Brown said.

"Putting more coupons in the Sunday paper has a suppressing effect," he said. "It’s a mass vehicle. You’re reaching 50 or 60 million consumers every Sunday, but you don’t get as many redeemed as in other vehicles. You’re reaching more people, but you’re reaching people who might not be ready to buy."

And, in search of the quick boost, companies have been making the usable intervals on their coupons shorter and shorter, from an average of six months only a couple years ago to six weeks, Lemper said.

But don’t retire your scissors quite yet. Experts said that though the figures might make it seem that coupons are on their way out, it’s actually a sign that the industry is evolving. Lemper said the future is in targeted coupons — like the ones right by the appropriate product at the store, or by pitching them to the right audiences on the Web or television programs.

"As opposed to getting 100 coupons of which only one pertains to me," Lemper said. "When I get a coupon for a feminine-hygiene product, I’m not really interested."

Instead of trying to get new customers, manufactures are using coupons to try to keep the loyalty of those who already use their goods, he said.

He also noted that Sunday inserts have been moving back toward focussing on grocery products, and that coupon-averse Baby Boomers are being replaced by Generation X shoppers, who like bargains nearly as much as brand names and are avid coupon users.

Finally, coupons may simply be going the way of other media: from paper to the computer monitor, on such Web sites as

"People are doing more couponing online," iVillage community and services Vice President Stacia Ragolia said.

She said her Web site's forums are filled with consumers swapping coupons, places to get deals and shopping tips. Coupons have almost become a form of currency, she said.

"People are very tied into communicating to each other about what savings are available," she said. "It's about finding things online. It's not just ripping coupons out and sticking them in your wallet anymore."