Couponing

Retailers Start to Suffer Super-Couponer Fatigue

Stores Setting New Limits on Redemptions as Number of 'Enthusiasts' Continues to Rise

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In South Carolina, they called her "the rice lady." Armed with coupons and hungry for deals, she was a ferocious shopper, targeting the rice aisle of her local Piggly Wiggly. Sometimes she even cleared the shelves, leaving no more rice for anyone else.

Then one day, they had to tell her to stop. "What we think she was doing was going and selling the rice at a flea market for a profit, which is not really how the system is supposed to work," said Christopher Ibsen, director-marketing for Piggly Wiggly Carolina Co. "I think it reached a point where she and the manager had a discussion," he added. "We couldn't support that ."

A new sport for deal-seeking consumers, extreme couponing can be more of a headache for supermarkets and other retailers, which have seen their couponing models turned sideways by pockets of usage that go far beyond normal patterns. To be sure, such aggressive couponing is by no means an epidemic. Coupon redemption is relatively flat as of late -- at 3.3 billion redemptions in 2010 -- and is down from the recent peak of 4.4 billion in 2000, according to a report by Nielsen and Inmar. Still, the percentage of consumers who are heavy users, or "enthusiasts," is on the rise, growing to 13% of all households in 2010, up from 11% in 2009, according to Nielsen. Of all coupons used in 2010, 70% were redeemed by enthusiasts, defined as those who bought at least 188 items in a year using coupons. It is this group that can pose challenges for retailers by tying up lines, clearing shelves and upsetting otherwise predictable supply-demand formulas.

Retailers are now responding. Chains are updating their policies, with some adding more restrictions and others posting rules for the first time. "One of the reasons why retailers have been posting their rules is because there has been fraud, there has been misuse of coupons [and] they want to control that ," said Todd Hale, senior VP-consumer and shopper insights at Nielsen.

Among those making changes is Target , which has updated its policy to clarify that two buy-one-get-one-free coupons cannot be combined to make both items free. Rite Aid tightened its rules on multiple coupons, specifying that it "may accept up to four identical coupons for the same number of qualifying items as long as there is sufficient stock to satisfy other customers."

Walgreens began posting rules last year, stating that "management reserves the right to limit quantity of items purchased." Even Publix, a grocery chain known for its lenient coupon rules, issued a formal policy in May.

Indeed, chains are engaged in a delicate dance. They don't want to appear too stingy, for fear of losing business, and are only seeking to keep out the abusers. And in an age where an army of mommy bloggers watch -- and report on -- their every move, one false step can prove fateful. Some companies even consult the bloggers, such as SuperValu, whose stores include Albertsons and Jewel-Osco. "We work very closely with several coupon bloggers at our different banners," said a SuperValu spokesman.

Piggly Wiggly Carolina Co. went so far as to co-sponsor celebrity couponer Jill Cataldo when she recently gave a talk to 2,500 fans at a sold-out performing arts center in North Charleston, S.C. "We want the customers [who are] keenly interested in coupons. We want them shopping with us rather than the competitor," Mr. Ibsen said, adding that Ms. Cataldo, like most coupon gurus, has integrity. What Piggly Wiggly doesn't want is the small minority of couponers "who have no regard for the retailer or the manufacturer who is issuing the coupons and has no real qualms about trying to game the system."

All coupon enthusiasts really want from supermarkets is clarity and transparency, said Carrie Isaac, who runs two coupon sites in Colorado. She blames TLC's "Extreme Couponing" show -- which features shoppers sometimes buying obscene amounts of items -- for giving couponers a bad name. And she feels for stores that encounter a "few bad people who ruin it for other people." she said in an interview. Stores are not in "business to help us save for the end of the world," she said.

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