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See I told you, this would help!

Coupon Abbreviations
  • SC = Store Coupon
  • MC = Manufacturer Coupon
  • SS = Smart Source
  • RP = Red Plum
  • PG = Proctor and Gamble
Coupon Terms
  • WYB = When You Buy
  • B1G1 = Buy One Get One Free
  • .75/1 = 75 cents off one item
  • .75/3 = 75 cents off three items
  • EXP = Expiration Date

Going Nuts? I can help you understand coupon terms and abbreviations

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Coupon Redemption-

I get a lot of comments and questions every week asking if the stores are going to get reimbursed for a certain coupon or if they will lose money on a deal. It is also becoming a peeve of mine to see people say that we should not get free items because we are going make them stop issuing coupons. So, I decided to give us all a crash course in how coupons are redeemed by the store.

The Life Cycle of a coupon:

1.  The manufacturer decides to run a coupon program and sends the coupon to a design agency that handles coupons.

2.  You acquire the coupon through the paper etc.

3.  You use the coupon, the store takes the coupon

4.  The cashier adds up her coupons and cash to make sure the drawer balance.

5.  The coupons are then bagged by the store and sent to the corporate office where all the coupons from all the stores are put into a bigger bag and sent to a big clearing house. Publix and Kroger use one overseas… (note some stores do this in house)

6.  The clearing house puts all the coupons that are in good condition on a big conveyor belt and they are scanned, then an automated process sorts them by manufacturer and prepares an invoice for the manufacturer.

7.  They are mailed from the clearing house to the manufacturer for reimbursement.

8.  The manufacturer receives the coupons and an invoice stating how many are there (think thousands).  They then pay the bill.  Some will recount to check for clearing house fraud and then pay the bill.

**The stores have on average 6 months past the expiration date to submit a coupon to the manufacturer – while you should not plan to use expired coupons unless allowed do not fret, they will still get their money**

How the stores get their money:

  • They can be paid directly by the clearing house – then the clearing house gets reimbursed from the manufacturer
  • They can pay a handling fee to the clearinghouse and they get a check from the manufacturer

Reimbursement also includes .08¢ per coupon to cover handling fees and the manufacturer’s reimburse postage costs!

Now for the details we care about:

If the coupon scans in the store odds are it will also scan in the big clearing house’s automated machine – thus the store should get reimbursed.

If the coupon doesn’t scan, is damaged etc. it is labeled “hard to handle” and is hand processed.  If it is the coupons fault (poor design, bad  barcode etc.) the grocer can then charge the manufacturer a higher handling fee!

The store does not have to submit any information about what you purchased with the coupon. Therefore if you use a Prego coupon on Pepperidge Farm Toast (because the cashier told you too) the manufacturer will only care/notice if Publix submitted more Prego coupons than the amount of Prego they purchased. Since Publix purchases thousands of jars of Prego per year the odds they would have more coupons than product are pretty slim.

When does the store “lose” money?

Some Manufacturers have poor practices with redemption that has nothing to do with the consumer, claiming falsely that coupons are not eligible for one reason or another.

Copies/fraudulent coupons- After a coupon goes through the clearing house and is sent to the manufacturer the manufacturer can still deny the coupon. Internet printables that have unique numbers (coupons.com or smartsource) make it easy for the manufacturer to spot fraud. If a coupon does not have a unique number or security code then the manufacturer will usually accept the coupon (within reason – bad copies even a cashier should catch). Why? Because the store’s corporate office has a chance to challenge any denial and if the manufacturer cannot prove fraudulent use then the store will win the challenge.

Again remember you are talking about thousands of coupons from each store.  Don’t think they are sitting around analyzing them (unless they are one of the bad companies which will falsely deny them anyway).

Store coupons:

These are processed in house. First, most people assume these coupons are the store being nice and just giving you money off an item… let’s think about that. This is a business guys, it’s not about being nice.

Stores are reimbursed for “store coupons” through various options:

  • The manufacturer can pay an advertising fee to place their product or coupon in the store flyer
  • The manufacturer can work out a discounted deal for X product, the store then decides instead of making the product the discounted price for everyone, to require customers to submit a coupon to get that price. This is the best plan overall, most shoppers would not care or know about the coupon so they only have to sell the product at the discounted price to a small percentage of shoppers. Therefore they make money on the other shoppers.

Fake Example (profit widely inflated): Fresh Express Bagged Salad gives Publix a discounted rate of $1 per bag for 500 bags. Publix decides to sell the bag for $3 and to put a coupon in the flyer for $2 off.
100 customers buy the salad with a coupon
400 customers buy the salad without a coupon ($2 profit per bag for Publix)
In the end: Publix gave 100 customers the salad without making any profit, however overall they made $800 off the deal.

  • Lastly the store can have a special reimbursement policy with the manufacturer for the store coupons. So they are handled like actual manufacturer coupons above.

The only time they are not getting reimbursed for these coupons in some way is if it is for a house brand item.  Keep in mind those are the items they make the most money on so they still aren’t out anything.

In closing: I hope that gives you some idea of how coupons are handled. The intention of this post is not to encourage improper use of coupons only to make some realize that the use of coupons puts money back in the pockets of grocery store. We are not taking these stores to the cleaners. They are doing just fine. About 10% of American’s shop with coupons (effectively), they get their money back from us through reimbursement programs. 90% of Americans pay through the nose for groceries and they keep the profit always growing for these stores. While profit numbers for 2008 are not out yet, for 2007 Kroger had net profit of $1.18 billion up 15% from 2006, and Publix had a net profit of $1.2 billion for 2007 up 7.9% from 2006.

For more information check out:
How Stuff Works
IOS (Clearing house used by Publix and Kroger according to their client list)
Kroger 2007 Profit Release
Publix 2007 Profit Release

Did I miss something you would like to know leave a comment and I’ll do a second installment if needed!

    • Tracie

      Thanks Jenny! This was so informative. I never knew all this information. Excellent!


    • This was SO informative- I never have a problem using coupons :), but this definitely helped me understand how the process works. Thanks!

    • Thanks so much for putting this out! I had no idea how coupons worked. I just knew the store received the money back.

      Now, to tell all the cashiers how it works.

    • I had to explain this to my Publix store assistant manager this evening. She told me that I could not use a $3/2 Johnson&Johnson coupon on the Johnson Buddies bars. She told me that the reason was that the face value of the coupon exceeded the price of the item.

      I explained to her the process in which coupons are reimbursed and that by selling me the 2 bath Buddies at $2.18 for 2…they are actually making a profit of $0.82

      There is a blinkie right there in the isle however it is front of the J&J bandage products which start at $1.99

      If shoppers do an about face they will see the Johnson’s Buddy bars directly behind them for $1.09

      Happy Shopping everyone.

    • First, I want to let you know that I LOVE your site! You list all the store deals in such a detailed way… and I really appreciate it! Now on to this post, all I have to say is you couldn’t of explained it better. I can tell we are on the exact same page with coupon use! Thank you so much for taking the time to explain this to everyone. If you dont mind, I would like to post a link on my blog back to this post. Reading what you have wrote really does make me feel like such an empowered consumer… and isn’t that what we all want?!?

      Thanks again for all you do!:)

    • Jenny

      Feel free to share! After all that typing I want everyone to learn about it :)

    • Jackie

      Hey Jenny,
      Thanks for the info! I love your site. A friend told me that if I buy an item that is b1g1 free and use a b1g1 coupon I don’t pay anything. Is this true? I can’t seem to wrap my mind around this.

    • Jenny

      That’s true! Some stores will give you a really hard time. If the do, try to explain all of the above to them that they will get there money it’s just someone else paying them!!

    • Amanda

      Jenny, thanks so much for this post… my husband is always saying “you know if too many people start using coupons they’re going to quit making them available” — I can’t believe only 10% uses them. Especially with how easy it is with Southern Savers!

    • Tara

      Thank you!!! I really enjoyed reading this because I always wondered how it worked.

    • Laura F

      This is wonderful information to have! I wonder why so many clerks act like the “Coupon Police”??? That is so frustrating to me! They act like you’re a criminal for using a coupon! I’ve only been doing this for about 3 weeks too so I’m sure a lot of you seasoned pros have had to deal with a lot of flack. UGH. Thank you Jenny for this VERY INFORMATIVE post!

    • This is fabulous! I had no idea how all of this worked. What an interesting process. Thanks for the post.

    • All I can say is WOW! I love using coupons but had no idea how it actually worked. I knew that they were getting reimbursed plus 8 cents but never knew all the other stuff. Thanks for your typing! :)

    • Wow… that was an awesome lesson. I am new to couponing and I have learned SO MUCH from you. Thank you for this informative post and for all the work you do!

    • paige

      It makes me so mad when ppl hate on coupon users!
      The stores make so much money off of use more than if we did
      not use coupons,(0.8c and we buy more stuff) just because we are not the ones paying all of it does not mean that they are not getting the money.

    • Amanda

      Thanks Jenny! My dad works for Bi-lo corporate and we always talk about coupons! :) The only thing they take a hit for is taking competitor coupons and doubling but most people dont know they even take competitor coupons!

    • Beth

      Well done, Jenny! I learned so much reading this. What do you think the stores are telling the cashiers to make them so difficult to deal with? I had a Publix cashier the other day lay all (24) of my coupons out individually and scan each as she rang up that particular item. I felt like some kind of criminal! It almost makes me want to be a cashier for a month just to figure out what’s going on.

    • That was such an interesting and informative post. Thank you!

      I wondered though where you found the info that only 10% of shoppers use coupons. A few months ago it seemed like I was the only one in my local stores using a list and coupons, now it seems like practically everyone is using them.

    • JennyG

      Jenny – After reading Beth’s comment above, and another man commented the other day about the “Coupon Nazi” at Publix, I have to ask— does Publix hold their cashiers accountable for their coupons? I had a cashier refuse to let the bagger bag anything until she verified every single coupon. She told me that if they take a “bad” coupon, then they (the cashiers) have to pay for it. I was a cashier many years ago, and that was never the case! I can’t imagine this is true. So what’s the deal?
      Thanks for all you do—I’ve always wondered how the coupons worked!!

    • Jenny

      J.G. That’s a great question. I think I’ll call Publix tomorrow and ask! I’ll post what they tell me. :)

      My guess would be if they accepted a coupon that was blatantly fraudulent then yes they are responsible in some way, though i doubt monetarily probably just a tick mark against them.

    • Kate

      You rock, Jenny!!! This is awesome, I may print a copy or two (with your website;s credit, of course) to give to some cashiers…. :)

    • Allison

      What about competitor coupons? I used some of the .50 off Quaker granola bars from Target today and the cashier told me that the acceptance of competitor coupons was coming up for review by their board because it was affecting the employees’ retirements.

    • Jenny

      Competitors that are really manufacturer coupons they get money back for. Others that are store issued are money they are not getting back at all. That is one area that they are just trying to make you happy and keep your business.

      I admit I’m a little shocked that they accept all of the $5 off coupons from various stores. I doubt that it is affecting retirements though, more like the boards pockets :)

    • Wow, I never thought to look up how it all worked, but I figured it was something like that. And, at Publix this week I saved 70%, Kroger was 65%, even before I caught their errors with my coupons.

    • kindra

      thanks for this jenny!! i love your blog and have been recommending it to all my friends! keep up the great work.

    • Sorry, I have just one quick question.

      This really nice manager at Kmart the other day let me use a Walgreen’s RR… well it actually scanned fine too! Will they get there money back from this?

    • Jenny

      Register Rewards are actually manufacturer coupons so they probably will get their money back without any problems (unless they assume they won’t and don’t even try to submit it).


      Only to add to the other praises……Thank You for taking the time to let us hard core money savers know how it works!!!

    • Bethany

      thanks for this jenny :) I NEVER have a problem at Kroger. They alway take my coupons and if the register won’t scan it then they override it. I’ve even taken coupons I forgot to hand to the cashier to the customer service desk and they’ve given me the cash for them. Sometimes I envy the deals at Publix but man I don’t envy the hassle! Thanks again :)

    • Sarah W

      Amazing job Jenny! That is really helpful info. I have to remind myself that I’m literally handing over cash to them and then that helps me have the right mindset if I need to advocate for myself or withstand “looks” from others. :) It’s usually not a problem, but can sometimes be discouraging… although after all the free cheese at Kroger’s mega deal this week I don’t feel very discouraged!! :) :)

    • Janis

      Thanks Jenny for all the work you do to make this site so great. Last week I had a cashier at Publix tell me that it was a new policy that they will not stack store coupons with man. coupons. Well, today I called Publix corporate office and asked. They had a District Manager call me back and she said that they do take both and that she would be contacting the manager about this. I went to Publix later today and first asked if they would take Walgreen RR and they said yes. I also asked if they will stack coupons and they said that they received an email today from their District Manager telling them that yes they do stack coupons and wanted all the stores to be on the same page. I was greatly impressed with how quick they handled this situation. Yeah Publix!

    • Eunice

      Hi, I’m new here, (this site is awesome) I had been doing coupons for almost 8 years now.
      Thank you for your great information about coupons. I kinda thought that’s how it work with coupons reimbursement. But I do have some more questions here that I’ve been wondering for quite a while. Maybe you know the answer.

      Double coupon policy, IE: Today I purchased a pack of sliced cheese with $.75 coupon from a blink machine (smartsource) On the coupon it does state Do not double. The cashier notice the term and didn’t scan it, instead she took $.75 off as a grocery discount, in result to my coupon did not double to $1.50 for maximum discount even thou my store offer full double coupon policy.

      My question is, Who is paying for the extra saving ($.75)? is it the store or the manufacturer?. do you think she did the right thing by not scanning my coupon?

      I normally shop at Acme (Albertson) and food lion
      Thanks in advance.

    • Julie

      I cashiered for a military commissary while stationed in Germany and we would get wrote up if we excepted an expired coupon (we took coupons 6 months past expiration so anything over that was considered expired). I think it was three write ups and you were fired. Maybe these cashiers are being misinformed by management about coupons and are scared of getting wrote up so they are just being overly cautious? Others I think just hate their job and are being jerks.

    • Susan Hackney

      Thanks so much for the info. I knew they got their money back and the handling charge, but didn’t know the exact process. I didn’t know however that some of the store coupons, they got the money back on too. So, it is nice to know that. I have had cashiers question when I use more than one coupon from the Publix advantage flyer for the same item. But, they always go ahead and give it to me. Now, I can tell them, that if it’s a national brand item, they do get money back for it, so it shouldn’t matter how many I use.

    • Laura

      Thank you so much for your research. I’d been wondering about the redemption process. Now, if we could only get the store clerks to read and understand this….

    • kp

      thank you so much for this helpful information. do you happen to know, are we still not supposed to use expired coupons even if they still get reimbursed (as you mentioned they have about 6 months)?

    • Jenny

      We should not use expired coupons as that is not following what the coupon was intended for. But if by chance you did the store would be okay. That is why some stores will actually take expired coupons.

    • Martha

      Thanh you very much for the info. I was wondering when the store double the coupon, Does the store get reimburse for that?

    • So, if the manufacturer gets a report of the coupons received from a store. Why would you think that they would reimburse a coupon that says “redeemed at BJs only” but received for reimbursement from Publix?

    • Jenny

      Because it is still a manufacturer coupon, though BJ’s distributed it, it is still reimbursed to any that submit it. Like the L’Oreal coupons that came out in the fall that said redeemable at Walgreens, or the Vitamin coupons that will have the redeemable at Kroger label on them. Any store can get reimbursement from a manufacturer’s coupon. It is just that the manufacturer let BJ’s feel special by giving them a coupon, they just can’t force you to use it there.

    • Jenny

      Just grabbed that actual BJ’s Listerine coupon you were referring too. It states on it in the small print:

      “Consumer: Redeem at Food, Drug or Discount Stores accepting coupons.”

    • Hi Jenny,

      But if the manufacturer has placed that wording on the coupon, they can use it as recourse to deny reimbursement. I understand the coupons that say “redeemeable at” I am talking about the ones that say “redeemeable only”.
      I would love to hear from a manufacturer or clearinghouse how this is handled.


    • Jenny


      I just called and spoke with someone at NCH Clearing House (the one owned by Red Plum). I asked her about that particular coupon and then any coupon in general with “redeemable only” on it.
      Her words were that if it was a true manufacturer coupon (and not a store coupon) that any store would be able to be reimbursed. This would be based on the coupons barcode and the fine print on the coupon.
      She said specifically regarding the BJ’s coupon that any store that submitted it, would get reimbursement with out problems.

    • Thanks Jenny,

      Thank you for taking the time to research this one out for us. I really appreciate it.


    • kp

      Thank you! Do you know which stores accept expired coupons or is it according to different managers?

    • Tiffany

      I am having a terrible time with our krogers. They are very upset because i bulk shop with coupons and have received alot of free chili and cheese last week. I now see where excessive bulk shopping with coupons isn’t to wise. They have basically told their employees to watch out for me ( I am the blonde in a skirt) and all other coupon shoppers with skirts. They are upset about me friends and I using many cheese coupons which we acquired online.(the coupon is free you pay for their time and effort) They say the coupon says do not double and it does not double. Well we never doubled the coupons, they did it. We had nothing to do with the coupon but hand it to them. They took their cheese coupon machine down so it wouldn’t be used, then we found the coupons online. One of the workers told my friend that they had a meeting about me. They are now changing their coupon policy because of it, is what was said. As far as I know I did nothing wrong and I broke no laws. Has anyone else had this kind of trouble. I am no longer going to bulk coupon shop. I realize that shopping as i did was not wise, but to run down a customer so that all the cashiers are on the look out for them as if they are a criminal to me is not right. I want to be able to shop in peace without feeling that the cameras are following me around the store.

    • Carolsue

      Very interesting. There isn’t a single store around here that will accept a coupon off the internet. At first, they just didn’t take totally free coupons; now they won’t take ANY AT ALL printed off the internet. That stinks! And we have never had stores that double. One store used to take expired coupons, but stopped that also.

    • Corrie

      Thank you for this post. I have a question that I am hoping you can answer. For coupons that are printed off the internet, is it ok to print a second copy by using the back button and hitting refresh? I know a lot of people do this, and I have scoured the coupon printers’ websites and couldn’t find anything to prohibit the practice. However, I have seen comments where people say that each coupon has a unique identifier and that the manufacturer only will pay for it once. If this is true, than the store where the coupons are redeemed would lose money, and I would not want to do this. Thank you for your time!

    • Jenny

      The coupon sites set it to limit each computer to print two, so even if you didn’t hit the back button and just went back to the site it would let you print your second.

      However when you hit the back button the second coupon does have a different number so they are legitimate. It is just fine to do it so no worries, just saves you the time of reloading the site and going through any registration again.

    • Corrie

      Jenny–thank you for your prompt reply. This is my first time to find my way to your site. I am definitely going to do some more poking around! :-)
      Thanks for easing my mind!

    • Ash

      I just want to say that I’m a cashier at a drugstore and yes there are some people that hate their job and probably do want to be jerks but for the most part we are just trying to make sure that what coupons we do take are legit. There are alot of people who abuse coupons and free after rebate items, ect. So the next time you have trouble with a coupon please don’t give the cashier a hard time. Believe it or not our job can be a pain in the butt sometimes and we get chewed out over stupid things on a daily basis. So just smile and ask to see a manager to check and see if there’s any reason why you can’t use your coupon.:]

    • robin

      This is great info! I want to make sure I understand correctly. I have a few manufacturer’s military coupons for colgate toothpaste. can I use these at cvs? and does cvs take competitor’s coupons? I am going to try my first cvsing experience tomorrow, I hope all goes well.

    • Jenny

      You should be able to use those without a problem tomorrow, CVS doesn’t accept competitor coupons accept for the $5 off $20 etc type coupons and that is on a per store basis. The Military coupon you have though if it is a manufacturer can be used at any store and is not really a competitor.

    • robin

      Thank you so much. So I will check with my cvs and see if they honor the rite aid $5 off $20. Also at cvs with their b1g1 free, will it ring up at the register as 1 full price and 1 free or 2 half price items? Sorry I seem so confused. Thanks again, you are great!

    • Josh

      This is such GREAT information! I am just getting started with couponing and getting more and more excited each time I read. Thank you for your info and hard work!!! This is going to be so nice to be keeping some money as time goes on! Been in couponing for 2 weeks and now inserts this week. :(

    • Mary Beth

      Thanks for the great article! I think I have the same question as Martha . . . what happens when the store doubles the coupon? Does the store get reimbursed, or is it out of their pocket?

    • There is a coupon out right now from Johnson & Johnson for 3.00 off of 2 items, this coupon has the Red Cross on it, is this coupon good on other J&J items, or only on first aid, it does not say first aid on it anywhere and is a manu coupon. Thanks Jenny.

    • Angel, NC

      Now that we understand how coupons work, I want to know how so many stores can double and triple coupons and still get their money back?