A digital coupon is a discount code for a product or service that is either transmitted or stored online. The concept behind a digital coupon is the same as that for a traditional clip-out paper coupon: namely, to give the holder a certain discount on some specific purchase. What distinguishes a digital coupon is the way it is collected and used.
The most common digital coupons look just like their paper cousins, but instead of arriving in print, they are posted online or attached to an e-mail message. Recipients must usually print them out themselves. This sort of digital transmission is often very cost-effective for manufacturers. It is usually a lot more expensive to rent advertising space in newspapers or pay to include coupons in direct mailings than it is to simply post a coupon online. Consumers can look at all of the coupons available, then print only the ones they intend to use.
Online coupons generally work best among demographics that are particularly web-savvy. Marketers usually try to reach consumers where they are. If this is in a print newspaper, then printed coupons are often best. When consumers read their news online, however, or visit retailers’ web sites for information, planting discounts in these spaces is usually more effective.
Some marketers have taken this a step further by issuing coupons through social networks and over mobile platforms. This kind of electronic coupon is often offered in exchange for some specific action: posting a link to the retailer on a personal blog, sending a message about the offer to network contacts, or adding the retailer as a “friend” on a social network, to name a few. In this way, retailers and marketers are able to conduct demographic research and spread word of their brand and products without much cost or external effort.
Particularly where smart phones and personal digital assistants are concerned, some digital coupons do not actually need to be printed at all. Users can often download a coupon to their device for direct scanning. This means that the cashier will swipe the entire phone or PDA across the coupon scanner, and the discount will be transferred. Scanning a digital coupon from an electronic device is praised by many as being environmentally conscious, while also promoting efficiency. Customers do not have to remember coupons, they only need to pull them up on their devices.
A different sort of digital coupon requires no direct processing at all. Some merchants offer digital coupon programs that allow shoppers to save coupons to online accounts, usually linked to a store loyalty or frequent shopper card. Customers can peruse all available coupons on the store’s main website, then click to save on any they find interesting.
Depending on the store’s digital coupon policy, discounts are available as soon as the e-coupons have been selected. When the customer later enters the store and completes a purchase, he or she need only allow the cashier to scan the loyalty card for the discounts to automatically apply. This sort of digital coupon processing happens entirely electronically, with a computer assessing whether any of the purchased items correspond with coupons previously saved to the account. Saved coupons are usually held in consumer accounts until they are either used or expire.