Hello,

Top comment mentions that companies use a clearing house, and I work at the biggest one!

To clarify, there are two types of clearinghouses - a retailer clearinghouse and a manufacturing clearinghouse. I work on the manufacturing side, but my company services both sides. A retailer is guaranteed reimbursement of the face value + 8 cents handling of a coupon by the manufacturer and they will also reimburse transportation costs. The amount a manufacturer is willing to pay is communicated to the clearinghouse and we abide by those instructions.

In the even a retailer isn't reimbursed fully for their shipment, and depending on the power the retailer has, they will deduct the money off of the next product invoice to recoup those costs.

"In the case of coupons issued by the store (or double-coupon promotions), the store absorbs the cost, just like when they have lower sale prices." - This is somewhat true. The manufacturing clearinghouse not only processes coupon submissions by retailers, but we also audit and settle the coupon process. With that, when a retailer doubles a coupon for a consumer, they do in fact absorb the cost of the extra coupon because they are only submitting one and not two.

If it is a store coupon that is issued by the retailer, things become somewhat of a gray area. Some manufacturers communicate to us that they are issuing non-coded in-ad coupons (long term for it) and for those that do, retailers may submit them for reimbursement. Some do this for a matter of convenience, since it is following a syndicated process. Otherwise, the retailer will keep track of the program and then recover the cost either via deduction or through billing the manufacturer. That is all established between the manufacturer and retailer specifically.

That is just the tip of the iceberg, folks :)