Renewed Consumer Interest Drives Fourth Quarter Surge in Coupon Use

-Inmar, the nation’s leading promotions transaction settlement provider, today announced that coupon redemption in the fourth quarter of 2008 grew nearly 10% compared to the fourth quarter of 2007, the first jump in redemption since the early 90s.

Consumer response remained strong for the year with 2.6 billion coupons redeemed, the third year in a row at that level. The weak economy was a major factor in stopping the steady decline that coupon redemption had seen in the years prior to 2006. The peak year for coupon redemption was 1992, at the end of the last major recession, when 7.9 billion coupons were redeemed.

“Consumers responded to the financial uncertainty, in part, by using more coupons,” said Bob Carter, president of Inmar CMS Promotion Services. “When everyone started hearing reports of record unemployment, drops in consumer confidence and losses on Wall Street, coupon redemption volume started to go up.”

While the first three quarters of the year saw redemption dip slightly, coupon redemption surged up by nearly 10% in the fourth quarter, compared to Q4 2007. That increase came in November and December which both saw double digit redemption growth. A double-digit increase in the use of food coupons primarily drove the jump in redemption, although non-food coupon redemption also rose by nearly 10%.

The increase in use also accompanied an unprecedented shift in the channels in which consumers used coupons.

“For years, nearly 70% of coupons were redeemed in conventional supermarkets,” said Jennifer Mauldin, President of Inmar Carolina Services Revenue Recovery Services. “But in 2008, the mass merchandiser channel saw a 15% increase in redemption overall, made up by a 20% increase in redemption for food coupons and a 13% increase in non-food coupons.”

Coupons redeemed in mass merchandisers now account for nearly 19% of all coupons redeemed while conventional supermarkets now account for less than 64% of coupon redemption.

Marketers continue to believe in the power of coupons, proven by a 5% increase in the number of coupons made available to consumers last year. At 317 billion coupons, distribution is not just up over the previous year, but is back up to levels from a decade ago.

“This high level of distribution, combined with a 9% increase in the average face value and a generally sour economy, make coupon offers more attractive to consumers than ever,” said Carter. “The question is whether or not consumers will continue to think so in the coming year.”

Entering the new year, consumers continue to show interest in a deal by redeeming over 9% more coupons in January ’09 than they did in January ’08.

“While we can’t predict the future, it is safe to say that the traditional coupon is back in vogue for consumers,” said Mauldin. “Even if the economy turns a corner sooner than later, a combination of factors have put coupons back on the radar of many consumers and introduced some to them for the first time.”