Walmart Coupon Policy Getting Good Reviews

Discussion
Mar 21, 2011
Tom Ryan

Walmart received some praise last week from consumer bloggers for
restating its coupon policies to provide clearer explanations of its redemption
procedures. Some saw the changes as more generous.

In particular, for the first time Walmart clearly stated that it will
not only accept a coupon that’s
worth more than the item being purchased but will give the customer the
difference. For example, according to the Salt Lake Tribune, if a shopper
has a coupon worth $3 off any size package of a particular brand of disposable
razors and a consumer buys the smallest size priced at $1.88, Wal-Mart will
give the $1.12 difference in cash — or apply the money to your other
purchases. The policy states, "Coupons may exceed the price of the item.
Change may be given or applied toward the cost of the basket purchase."

The
situation, termed "overage," is occurring more as couponing
has become more aggressive in recent years. Wal-Mart is said to be the first
to not only address the issue in writing, but also to cover
the difference. Most stores "key down" the value of coupons to
match the purchase price. According to the Minneapolis Star Tribune, Target
will accept coupons for more than the price of the item and will apply credit
to the total but will not give cash back.

Another change is that Walmart is
now accepting competitors’ coupons that state a specific price, for instance,
the discount makes it 99 cents. It won’t take competitor coupons for "$1
off an item" for example. Finally,
the discounter now accepts Catalina’s register printout coupons from competitors’
registers.

Walmart won’t
accept competitors’ coupons under four restrictions: dollars/cents off at a
specific retailer, percentage off, buy one, get one free (BOGO) coupons without
a specified price, and double- or triple-value coupons. Walmart also won’t
accept printable coupons that require no purchase.

Speaking to Dow Jones,
Walmart spokesman Ravi Jariwala said the retailer is also trying to educate
staff as well customers of its coupon guidelines.

"There was confusion and inconsistent redemption in the stores," admitted
Mr. Jariwala. "We are clarifying our position and now more clearly communicating
it to customers and [employees]."

The Dow Jones report noted that
confusion over coupon usage has been a steady rant on blog sites tracking Walmart
as well as retail in general. Many claim procedures vary from store to store
and even from cashier to cashier.

Showing that coupon clippers can go to extremes,
Walmart’s policy also calls for a supervisor or manager to approve any purchase
with over 40 coupons, a coupon that is worth $20 or higher, and any time total
coupon savings exceeds $50.

Discussion Questions: What do you think of Walmart’s move to clarify and simplify its coupon policies? Is their “overage” stance as well as their acceptance of competitors’ coupons too generous? How much of a benefit will Walmart likely get from consumers and particularly coupon-clippers?

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11 Comments on "Walmart Coupon Policy Getting Good Reviews"


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Ryan Mathews
Guest
10 years 1 month ago

Walmart seems to be struggling to hold/grow U.S. sales. And when retailers get in trouble, the first thing they often do is reach for the discount pad.

Will it help? Maybe a little, but I suspect Walmart’s problems run deeper than coupons. Perhaps they have plateaued and there just are no more domestic worlds to conquer. Perhaps people are falling out of love with bouncing smiley faces.

Whatever the reason, I suspect the new coupon policy isn’t going to turn the ship around but if enough consumers like it it may succeed in making the operating results problem worse.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
10 years 1 month ago

Walmart is already perceived in the eyes of the shopper as being the lowest price. This just drives additional traffic to their stores since shoppers know they can take advantage of competitive coupons at Walmart. Other retailers should make sure they are creating strong promotions that fall outside the lines of what Walmart will accept. For example Buy one Get one programs.

Ben Sprecher
Guest
Ben Sprecher
10 years 1 month ago
Walmart’s policy change/clarification will help Walmart bring in more coupons, whether from existing shoppers or new shoppers who are rabid coupon users. Ordinarily, I’d comment about how those new shoppers may not be valuable shoppers, since they are (by definition) deal-seekers. At Walmart, though, deal-seekers are the chain’s bread-and-butter; and besides, without individuating their shoppers, it will be hard for Walmart to tell whether new coupon users are a net gain or drain on the overall business. Whatever the effect on Walmart’s bottom line, I think there will be a fascinating drama that plays out behind the scenes. Because of Walmart’s clout, they will be able to force their coupon redemption policies onto manufacturers. For example, if Brand X cries foul on being charged for Catalina redemptions at Walmart, Walmart can simply ask Brand X in a menacing tone if they really want to create a sore point over some coupons…after all, the category review is coming up and Brand X’s competitor is accepting Walmart’s new coupon policy without complaint…. In short, despite offering its… Read more »
Dan Frechtling
Guest
10 years 1 month ago

The opportunity for Walmart can be summed up in a few numbers:

1. Consumers who regularly use coupons (NCH):
2008: 66%
2010: 78% (+12 pts)

2. Coupon dollars redeemed (NCH):
2008: $2.6 B
2010: $3.3 B (+$.7 B)

3. Walmart’s share of grocery (UFCW union)
2008: 23%
2010: 23% (+0 pts)

The factors of increasing coupon usage, flat growth, and share of redemption that underperforms Walmart’s share of market (if Walmart redeemed 23% of coupons the market would be even higher than $3.3 B) conspire to make this a smart move.

Inconsistent redemption standards at Walmart stores have led coupon enthusiasts to take their business elsewhere. The retail segment that includes dollar and club grew redemptions 25% in 2010. Walmart can seize the advantage back by not only clarifying their policies, but by making them superior to rivals.

Camille P. Schuster, PhD.
Guest
10 years 1 month ago

Clarifying the policy is a good idea. Is this the critical factor that will increase Walmart’s sales? No. Is this one factor in paying attention to and connecting with consumers? Of course. This can certainly be one small part of a multi-pronged approach. As a primary approach it is not likely to be successful.

Anne Bieler
Guest
Anne Bieler
10 years 1 month ago

They either had to take this first step to clarify, simplify, and standardize redemption or risk further shopper erosion. But in the mind of the “new” consumer, coupon clipping is a smart move for a distinctive cohort of shoppers, not necessarily the core group that sees the value Walmart brings everyday. Walmart has lost the attention of a number of shoppers with prices that were higher than competitors, assortment issues, SKU reductions and more. The strategy needs to be holistic and clear to shoppers, or further fragmentation will follow.

Kai Clarke
Guest
10 years 1 month ago

Finally. This is the right thing for Walmart to do, and the best thing. Consumers have been asking for this, Walmart has needed to do this, and their position is consumer positive. What is there not to like here? Hooray for Walmart! Now the real question is, who will follow their example?

Ed Dennis
Guest
Ed Dennis
10 years 1 month ago
Many good comments here. Walmart may have hit a wall because they picked up a lot of new customers when our economy crashed. If you believe the hype (I don’t) that the economy is coming back, then it makes sense that some of those who migrated to Walmart due to economic stress may be going back to their old favorites as their situation improves. The fact is that Walmart received a windfall when the economy tanked, but wrongly attributed the growth spurt to their brilliance and then started increasing their prices as much as 40% on some grocery items. It would seem that some of Walmart’s customers soon learned that they could now shop their local grocer for only a tad more than Walmart and considering the gas to get to the Supercenter–it’s almost a wash. Walmart needs to get the MBAs out of Bentonville and find some one who knows how to stock a shelf. Their biggest problem is the sales they are missing due to OUT-OF-STOCKS. Someone convinced somebody that it’s rocket science.… Read more »
Steve Montgomery
Guest
10 years 1 month ago

Consistent application of any policy is generally a good thing for any retailer. Consumers don’t like surprises–having one store or cashier being willing to do something when others won’t creates confusion and mistrust.

No one wants to get into the checkout line expecting certain things to happen and then find they aren’t going to. The customer is embarrassed and gets upset, the store associate is put in a bad position of enforcing what they believe is the company’s policy, the other customers frustrated by the time it is taking, etc. Having clear consistent policies regarding couponing should enhance the consumer’s purchase process. Will it result in more business? That is another question but it certainly will not hurt.

Joel Rubinson
Guest
10 years 1 month ago

There is also the transparency factor. They are being open and transparent so customers don’t think they are getting screwed when they don’t get the coupon redemption they were expecting. No question that couponing has seen a resurgence, fueled by digital delivery systems. Walmart is on trend by doing this.

Odonna Mathews
Guest
Odonna Mathews
10 years 1 month ago

Vague policies create customer dissatisfaction. A clear coupon policy that is posted in the store and online is important. And so is educating staffers so the policy is implemented without hassles for customers.

I applaud these changes and think other retailers may now be forced to re-examine their policies.

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