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Feb. 10, 2010, 1 p.m.

Coupons make a comeback: redemption up 27%

Back in my college days, it only took a few Thursdays at the school paper to learn a newspaper-business lesson: Readers love coupons. Thursday was the day the UCSD Guardian had its package of deals ($1 off at Golden Spoon!), and issues flew off the racks.

But outside the world of undergrads hunting for a froyo deal, coupon use was already on the decline. Year-over-year since 1992, coupon redemption fell — until the fourth quarter of 2008, when things swung back. Both the number of coupons available and their redemption rates are now rising; from 2008 to 2009, redemption rose 27 percent.

I spoke with Matthew Tilley, director of marketing for Inmar, a company that handles the bulk of coupon processing in the U.S. He said more coupons means good news for newspapers. , overall, it’s good news for the newspaper business. “The predominant means for distribution of coupons is newspapers — and it’s growing.”

Inmar data says that 88.7 percent of all coupons appear in “free standing inserts” (FSI), the kind you typically find in your Sunday paper. From 2008 to 2009, the redemption rate for this kind of coupon jumped 36 percent. And of all coupons redeemed, 52.3 percent came from free-standing inserts.

(I asked Tilley to explain how FSI could make up almost 90 percent of all coupons but barely half of all coupons redeemed. He said redemption rates are skewed by coupons distributed near the point of sale — in-store coupons that appear next to or on a product, or those personalized coupons you receive at the supermarket register with your receipt.)

Internet coupons are on the rise, but they still represent only a tiny fraction of the market, less than half a percent. But of all coupons redeemed, they account for 1.5 percent. Redemption rates for Internet coupons are the fastest-growing in the business, up 263 percent from 2008 to 2009. Check out more highlights of the study in the slideshow above.

POSTED     Feb. 10, 2010, 1 p.m.
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