Q: As a longtime couponer, I am interested in how the reimbursement from store to manufacturer works. Do stores hire people to submit coupons to each manufacturer?

A: Consumers don’t often get a peek at how coupon redemption works. We cut our coupons, enjoy saving on products and then ... what happens next? If you’ve ever looked at the fine print on a manufacturer’s coupon, you may have seen there’s a mailing address. Your coupons can be sent back to the manufacturer and the manufacturer will reimburse the store for their value.

But does someone really sort the thousands of coupons a store receives each week and mail them to individual manufacturers? Usually not. This would be a labor-intensive process that would require the store devote its staff to sorting/redeeming coupons on an ongoing basis. Instead, most stores use 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 them into a larger shipment. Then, the coupons are sent to the clearinghouse. There, they are sorted by manufacturer and product. This is usually done via an automated system of digital scanners and conveyor belts. Once the clearinghouse has sorted and scanned the coupons, they total the value 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 arrangement, the clearinghouse either will pay the store or each manufacturer can send payment directly to the store.

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. Along the way, if there are any counterfeit or fraudulent coupons, they are pulled and not reimbursed. These coupons are kept on file at the clearinghouse and a fraud investigation may be opened. Photocopied coupons receive a similar treatment – the store does not get reimbursed for these. (Never photocopy coupons.)

Who pays the clearinghouses for their services? Coupons contain a statement similar to, “Manufacturer agrees to reimburse the face value of this coupon plus .08 handling fee.”

So that little piece of paper takes quite a journey once it leaves your hands at the store.

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