In marketing a coupon is a ticket or document that can be exchanged for a financial discount or rebate when purchasing a product. Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in retail stores as a part of sales promotions. They are often widely distributed through mail, magazines, newspapers and the Internet. Internet coupons have become very popular as of late, because there is no postal cost, and the printing cost is borne by the user (who has to print the coupons themselves) rather than the businesses issuing the coupons.
According to Events from History: The 19th Century, Salem Press, in 1887, the Coca-Cola Company was incorporated with Atlanta businessman Asa Candler as one of the partners. He transformed Coca-Cola from an insignificant tonic into a hugely profitable business by using brilliant and innovative advertising techniques. The key to this meteoric growth was Candler's ingenious marketing including having the company's employees and sales representatives distribute complimentary coupons for Coca-Cola. Coupons were mailed directly to potential customers and placed in magazines. The company gave soda fountains free syrup to cover the costs of the free drinks. It is estimated that between 1894 and 1913 one in nine Americans had received a free Coca-Cola, for a total of 8,500,000 free drinks. By 1895, Candler was announcing to his shareholders that Coca-Cola was served in every state in the United States.
Coupons first came into widespread use in the United States in 1909, when C. W. Post came up with the idea to help sell breakfast cereals and other products. Today, more than 700 corporations offer coupon discounts. Each year, coupons generate more than 8 billion dollars in transactions within the U.S. alone.
Another type of loyalty incentive is the trading stamp. It is distinct from a coupon in that a coupon is redeemable for a specific product or class of product, whereas a trading stamp acts like a currency, or a token economy.
It was used as a temporary currency for some former Soviet countries, especially Moldova (used until 1993, replaced by Moldovan lei), and Ukraine (replaced by hryvnia in 1996) after they became independent. There are also internet sites that have coupons that can be used online.
Online retailers usually refer to Internet Coupons as "coupon codes," "promotional codes," "promotion codes," "discount codes," "key codes," "promo codes," "shopping codes," "voucher codes" or "source codes." Internet coupons typically provide for reduced or no cost shipping, a specific dollar or percentage discount, or some other special offer to encourage consumers to purchase specific products or to purchase from specific retailers.
The term "coupon" is also used in manufacturing and material science to refer to a small piece of material used for testing or further processing, compare billet.