Be a Confident Shopper by Understanding Coupons…

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Have you ever really took the time to look at your coupons and wondered what the heck all those different codes and numbers mean?! Well, my goal today is to break down the “secret” coupon codes, so that you are more confident and educated when using your coupons! Please note that I am in no way trying to provide information that allows you to use coupons inappropriately or for an unintended use!

A typical coupon barcode looks like the image below on the left that says “UCC Coupon Code”:

(Thanks to AccuGraphiX for this image)

UCC Prefix – This portion of the code will be either a 5 or a 9. It deals with doubling. If your store doesn’t double coupons, then this number has no purpose. If your store DOES double coupons, then any coupon coded with a 5 will double (up to your store’s doubling limit) and any coupon coded with a 9 will not double.

UCC Company Prefix – These numbers identify the manufacturer of the couponed item and MUST match positions two through six of the UCC Company Prefix on the product that is being purchased (this is the way that the register can validate you are purchasing the right product(s) for the coupon being used).

Family Code– Most manufacturers break their products into families and the family code allows the coupon to be coded for a specific product that the manufacturer sells (i.e. Crest may have a coupon that is only good for Crest Pro-Health Toothpaste so the family code on the coupon would validate this at checkout and would beep if you purchased a different variety of Crest toothpaste).

Value Code-This code tells the register what you need to purchase and how much to take off at checkout. The are over 100 value codes, so I will not be listing them all. Here are some examples:

00: Free product Coupon– will beep and require the cashier to manually input the amount to take off.
14: B1G1
50: $0.50 off
99: $0.99 off

*Keep in mind that coupons will occasionally scan successfully for items not listed on the coupon or even excluded by the terms written on the coupon. Just because the coupon scans does NOT mean that it is okay to use coupons for unintended items…this is actually coupon fraud and is illegal!


OK, so now that you understand coupon coding, do you really know how the process of coupon redemption works for stores?! What do stores do with those stacks of coupons that they collect from all of us savvy shoppers?

Coupon Redemption Process:

-Manufacturers design coupon promotions with their sales/marketing teams

-Coupons are distributed via newspaper inserts, direct mail campaigns, via the internet etc.

-A very “hip” shopper excitedly enters the store and proudly uses all of his/her coupons at checkout 😉

-The cashier scans the coupons and puts them into the cash drawer. Typically, at the end of the day the coupons in each cash drawer are added up as if they were cash, and that amount is added to the cash sum to be sure the overall total for the drawer is accurate.

-Once per week, all of the manufacturers’ coupons (and any coupons issued by the grocer) are sent in plastic bags or pouches to the store’s corporate headquarters.

-There is a very lucky person at headquarters in charge of processing the coupons. That person boxes all of the bags of coupons and ships them to a third-party clearinghouse.

-The clearinghouse is then responsible for doing the most important part of the coupon redemption process– separating the coupons by manufacturer or by scannable coupons versus damaged/torn coupons. Most of this process is done by hand. Sometimes coupons are put face up on a conveyor belt and move under a scanner that reads the UPC codes and tallies the amounts. However, damaged and torn coupons have to be tallied by hand. The clearinghouse then sends all the sorted coupons with an invoice to the manufacturer.

-The manufacturer will reimburse stores the face value of coupons or if the coupon calls for free merchandise, for the retail-selling price up to the stated maximum value printed on the coupon PLUS 8¢ for handling each coupon properly redeemed (this 8¢ value may vary slightly). Many times manufacturers, such as ConAgra Foods, will also reimburse retailers that are using a clearinghouse or billing agent at a rate equal to $5.50 per thousand of coupons redeemed.

-The manufacturer either reimburses the clearinghouse for the amount of the invoice, and the clearinghouse mails a check to the store for the amount of the coupons OR the manufacturer sends a check directly to the store and the store then pays the clearinghouse. (The clearinghouse is paid a certain amount per coupon by the store, plus shipping and handling).

(Thanks to HowStuffWorks for some of the info on explaining the coupon redemption process!)

You can view a visual diagram of the coupon life cycle here and/or check out an example of the coupon redemption policy for ConAgra Foods here.

Here are a few interesting fact on coupon use in 2009:

-With a sour economy, consumers used 27% more coupons in 2009.

-Brands issued 367 billion coupons, at an average face value of $1.44 (That’s a total of $528.5 Billion)!

– Out of those coupons above, a total of $3.5 billion worth of coupons were redeemed.That sounds like a lot, but compared to the $528.5 Billion that were available– that’s less than .7%!

(Facts credit: Coupon Info Now!)

OK, so now that I have thoroughly overwhelmed you with the coupon coding/coupon redemption process, I have a question for ya…would you be interested in seeing a visual depiction (i.e. video) of the life of a coupon starring me Collin, the coupon, starting at the “birth” of the coupon and ending at the “death” of the coupon? My wheels are turning about this topic and I may pursue it if enough readers are interested. What are your thoughts?

Join The Discussion

Comments 312

  1. Tegan

    Hey Collin, everything you do is totally fun! I think this is a great idea!

  2. Elizabeth

    Great post! I love learning how stuff works!

  3. Sara

    How does the clearinghouse keep all the coupons separated by each store?

    And if all the coupons go first to the corporate office, does the clearinghouse or manufacturer send a big fat check to the corporate office and then they divy out the money to individual stores?

    I wonder how long it takes from the day we use a coupon to the day the store actually sees the money?

  4. cjs

    Really cool to know more about coupons/their process. Thanks for the post & yes, I would love to see the ‘life’ of a coupon tracked by the wonderful YOU!

  5. jennifer

    Honestly, I think it would be a FASCINATING video! I would love for you to do it!

  6. Dianna

    Colin, ok my question has always been:
    ~I purchase an Item for $4.00
    ~I have a coupon for $5.00
    ~The store will not allow coupon overage, therefore they let me walk with my product free they only honor $4.00, they then submit the coupon for $5.00.

    ~~~~ MY BIG QUESTION- will they be reimbursed for the face value of the coupon $5 or will they be reimbursed for the $4.00(the purchase price of the item).?????
    I SURE HOPE you know because this has really been a burning question in my mind!!!!!!

    • Lolo

      If and only if the store is honest and writes the amount the coupon was redeemed for on the face of the coupon then will it be reimbursed at the rate you were given. If they fail to indicate that they redeemed the coupon at a value for less than the face value, then the store will actually be making money on your purchase.

      • Amy B.

        Are you sure it really matters if the coupons are just being scanned on a conveyor belt? The writing on the coupon would make no difference at all.

  7. Jamie

    I agree with so many of the comments. Especially all of the questions regarding B1G1 with $ off, and Doubling, and all of the rest. I do a lot of it . . . because it works, and I save a lot. But sometimes I wonder if it is the way it was intended. I do not wish to rip anyone off, but I want to be frugal. We are saving our families so much money – — and hard earned in these days, too! I cannot see that being wrong, ever!!! But, I would love to be more educated as to EXACTLY what is right, ethically speaking. Just like many of the others said, so we have a leg to stand on!
    And I would love to see that video!! Your videos are great!

  8. Desiree

    Yes I’d be interested in seeing the life of a coupon. I used a 1/1 rayovac coupon at wal-mart the other day. the batteries were .97 and the cashier made the choice not to change the amount because she was in a hurry and just ran the coupons through. I said to her, “well, you guys get paid the dollar back anyway” And she said “NO, we only get paid for price of the item.” I still don’t think that was accurate, but I am curious to know for sure. Thanks for the info.

    • Sara

      Unless they write the new amount on the coupon, I don’t see how they won’t get paid back the full amount. This is a question everyone would like answered.

      • Lolo

        It depends on when they count the cash drawer if they notice that they did not alter the coupon value at the checkout and whether they decide to take the $.03 loss of whether to pass that along to the manufacturer and just submit the coupon at its face value.

    • Kimberley

      Walmarts policy is to not modify the coupon down. The do get pId the full amount, the Manu has no way of knowing which specific item was bought.

  9. Lindsey

    DO IT!

  10. Loreli

    I would be completely interested in seeing the life cycle of a coupon. I think it is a neat idea!

  11. Lolo

    Collin if you do this can you make the coupon you use as your example for lemons???? 🙂

  12. LadyE

    Collin, thank you for explaining this. I have always wondered and thanks to you now I know! I think your video idea is great. Can’t wait to see it.

  13. Antonia

    I would love to watch this. I have come across quite a few cashiers and even managers who get upset because my toltal bill goes from like $160.00 down to $30.00 or because I am getting a item free and just paying tax. I just don’t understand are they losing money on me or what. Today I had a manager complain becasue I spend “hundreds in that store every week and get almost everything free” and it takes the cashier a long time to scan my coupons (but sitting there nit picking everysingel coupon doesnt take a long time right). Shouldn’t they be happy I am spending money there don’t they get the money from the manufacturer or are they losing money? Last week she refused to take my coupons because they say 1 per purchase so I could only use 1 of the same coupon. After I left all embarassed by digging through the bags in the cart digging out 1 of everying, so the trip would not be a complete waste I called customer service. They said no that is not the case and if I had a problem not to leave the checkout line and call them and they would help me. Just my luck to get the same manager this time she wanted to know what I was doing buying all the games ect. I told her I am donating the majority of the stuff I am getting but I was thinking to myself does it really matter what I am doing with it? I calmly explained my call to customer service and what they had advised me to do, she just got mad and told the cashier to “do whatever she had to make them work” and stormed off. I want to know what the big deal is!!!!!

    • Collin (Mrs. Hip)

      I’m curious what store this was. The only store that has ever given me much of a problem is Walmart, which is a part of why I hardly ever shop there now that I shop so extensively with coupons… though also they are generally not cheaper once you take into account BOGOs at Publix/ Winn-Dixie.

      The way this was posted almost sounded like a drug store. Was it? And if so which one? Inquiring minds want to know… lol.

    • Hayley

      I had a very similar thing happen to me at one of the larger chain drug stores. The shift supervisor was arguing with me that I was cheating them and the manufacturer, using one of their coupons and a manufacturer coupons. Which in their coupon policy it stated that you could do that. The next time I went in I got the manager and told her what happend because of course he was their and checking out people. I explained to her that I was not doing anything wrong and checked with her to make sure that I was not.
      I was very upset because how I look at it is I purchase a lot of items and bring in a lot of money for them every week. Most weeks my total is over a 100 before coupons. They are getting all of that money back from a manufacturer.
      I think it is helpful to be confident even though for me it was very embarassing how he treated me, but after I talked to a manager I felt so much better.
      Keep on couponing and don’t let some stupid lady get in your way.
      She is just jealous because you are saving money.

    • Missy

      They have no right to ask you what you’re doing with the items you purchase.

      • Anon

        I can’t help but think that manufacturers and retailers are following sights like H2S that have high consumer traffic volume. It is to our advantage and to theirs to identify the stores you are having problems with, and complimenting the ones that treat us fairly.

    • Kelly

      Terrible! Employees don’t understand couponing and need to read Collin’s post. Print it out and show them that YOU AREN’T STEALING FROM THEM. Their store will get PAID!

    • Deal Seekr

      I know for a fact you were at Target!! They are a real trip…

    • Robin

      I have gotten some of the same reactions from cashiers. I too was wondering what the problem was, since I was sure they were reimbursed. It almost feels like they are burdened taking our coupons! The cashiers still have to work the same # of hours taking our coupons or not. Sooo are they jealous that they are not saving money using coupons!! On the positive side I have had a few cashiers really excited to tell me what I have saved as well as one that gave me some coupon sites to check out because her Mom is a couponer.

  14. Sara

    sounds Very interesting! I had no idea how this works – would be fun to see a video of the action!

  15. LAUREL

    I’m totally game for watching that! Like others, I get a kick out of knowing how things work… and it always helps to be smarter than the cashiers and managers!

  16. mary

    YES !!! i would love to see the you do the video it would be such helpful and informative information thank you so much for the info and all that you do .

  17. Tracie


  18. Melanie

    You are so informative and I think it is a great idea!

  19. Keegan

    Yes! I have wondered about this and wanted more information on it. Please do it. 🙂

  20. elaine

    i am curious who pays the double or the triple, i will assume the store w/the promotion does. also i am curious about expired coupons. up til recent one of our local grocery store took coupons that were a few weeks out of date. also, some target employees told me that there HQ matches all the coupons to each transaction and if the the cashier is not matching the coupons correctly they can lose their jobs. for example the $4 monopoly game coupon matched w/the card game at my store was not a equal match. they wanted the exact picture on the coupon, taking it quite literal. i get their point.

    • Missy

      I’ve been wondering who pays when coupons are doubled, too. I always assumed the store did, but seeing that the coupons are specifically marked for whether or not they can be doubled makes me think it’s the manufacturer. Why would they care if a coupon is doubled if the store was paying the extra? Anyone know?

    • Destiny

      Me too I’ve always wondered how the store is making any money if they match the coupon and double it or triple it?

  21. cindy rumpel

    YES>> this is a wonderful idea this would also be great for all, this is called shop floor management. I worked for a plastic co. we did this from the start of the material to the filling of the bottle , open pit bbq to shipping this out we now new how to please the bottling co.we also gained much respect for the company.

  22. karrie

    Wow this is great information. I think couponing is so important but these more detailed posts are really helpful to understanding the ‘big picture’. Any sort of extra information like this is really appreciated! Thank you!

  23. Christina

    I had a question asked of me….” I read that coupons that start with 5 will automatically double/triple… but what about ones that start with a 5 but say “Do not Double”.
    How should I respond? I would assume it would not double, right?

  24. Destiny

    I would love to hear how this process works….. it would kind of be like a dirty job show… learning how things work! 🙂 I wouldn’t want to be the one that had to sort the coupons by hand.. 🙂

  25. Aubrie


  26. cortney

    I would love to see how the whole coupon process works!! Please do a video of it!!

  27. Kelly

    Thanks for the post. I asked my uncle, who had worked in a grocery as a manager years ago about the life of a coupon. He said that before barcode technology, cashiers would supplement their income with coupons. Meaning: they would take out cash and put in coupons! Can you believe! Collin, I may pee in my pants if you take on the part of “the coupon”.

    • Becky

      My college roommate’s dad owed a small mom/pop grocery store. She would always take coupons home to her dad. I wondered what they did with them, but they were probably doing the same thing – supplementing their income.

  28. christinab

    This would be AWESOME….can’t wait!!

  29. Rhonda

    I’m at the edge of my seat waiting for the process to start. Keep up the wonderful work Collin. You are the best:)

  30. Kristi

    that is super helpful info to understand, I learned something today! Yeah

  31. Susan

    What great info!! Thanks!! You KNOW I would be interested in seeing you video the life of a coupon – my research is proving very interesting!!!

  32. Holly

    I work in retail and I would love it also If you would do an explanation of the individual dot scan barcodes or pin numbers that appear on the internet coupons. I have several customers who think that it is ok to just photocopy these and then hope to get a cashier who is either a) too busy or b) not educated to the couponing process. I, as a retail employee who also enjoys the thrill of couponing, am all about someone saving money. But I also believe that playing by the rules is important too. Fraudulent copies of these coupons are NOT reimbursed to the company and we lose money. If you could briefly hit on this issue since some people out there do not read the fine print on these coupons it would be a blessing.

  33. nona

    I have a few coupons that say “do not double or triple” even though on the code it starts with a 5… will they still automatically double in the computer system?

  34. Pamela

    Yes, I would LOVE to see a video of this….and then you can send the video to EVERY STORE and educate the employees so that they know how to read and use a coupon. I hate it when the cashier thinks I am using coupons in the wrong way when actually I am using them correctly! Each store should really educate the managers and cashiers better…..sorry I went off there.

    • Deal Seekr

      i concur!

  35. Kari

    Absolutely, Collin!! What a fabulous idea!

  36. Collin (Mrs. Hip)

    That was very educational and beneficial! Thanks Collin… I am not overwhelmed but I feel empowered and more confident!

  37. spolk

    I am also curios as to what happens when a store marks down the price of a coupon….. from $4.00 to $3.00 for an itme that is $3.00 and you have a $4.00 coupon. If it is going through a scanner, how will a scanner know that it has been marked down to $3.00? Won’t it just automatically scan $4.00??? Would REALLY LOVE to know the answer to this one!!! Thank You!

  38. Collin (Mrs. Hip)

    I would love to see the video! I am a coupon newbie and I really want to know how to do couponing to the best of my abilities and teach it to my family. Especially being a Marine Wife with three kids, I want to be able to smile when I spend our money. I do not want to feel the despair of how much everything costs.

    Thanks for you site! I am so excited to start educating myself on how to coupon successfully.

  39. mattie

    I would love to see a video, and would really like to know what the value is of printable coupons without the bar code. Is there a way to add the bar code.


  40. Smarty1128

    I agree with Mattie.

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