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, coupon envelopes, magazines, newspapers, the Internet, directly from the retailer, and mobile devices such as cell phones. Since only price conscious consumers are likely to spend the time to claim the savings, coupons function as a form of price discrimination, enabling retailers to offer a lower price only to those consumers who would otherwise go elsewhere. In addition, coupons can also be targeted selectively to regional markets in which price competition is great.
In government, a coupon is a paper certificate used to administer a benefit or permission.
Online retailers often refer to coupons as “coupon codes”, “promotional codes”, “promotion codes”, “discount codes”, “key codes”, “promo codes”, “surplus codes”, “portable codes”, “shopping codes”, “voucher codes”, “reward codes”, “discount vouchers” or “source codes”. Internet coupons typically provide for reduced cost or free shipping, a specific dollar or percentage discount, or some other offer to encourage consumers to purchase different kind of hosting services or to purchase from specific hosting companies Marketers can use different codes for different channels our groups in order to distinguish response rates.
Many retailers and companies use verification methods such as unique barcodes, coupon ID numbers, holographic seals, and watermarked paper as protection from unauthorized copying or use.
The origin of the term “coupon” is that bonds were historically issued in the form of bearer certificates. Physical possession of the certificate was proof of ownership. Several coupons, one for each scheduled interest payment over the life of the bond, were printed on the certificate. At the date the coupon was due, the owner would detach the coupon and present it for payment.
Between a bond’s issue date and its maturity date (also called its redemption date) the coupon’s price is determined by taking into account several factors, including:
- The face value;
- The maturity date;
- The coupon rate and frequency of coupon payments;
- The creditworthiness of the issuer; and
- The yield on comparable investment options.
Hosting coupon is one of the addition feature or facility provided by various hosting companies to attract customer from different backgrounds. These coupons provide discount on various hosting services. Depending on the jurisdiction, coupons may or may not reduce the sales tax which must be paid by the consumer. This is often determined by who sponsors the coupon. If the coupon is issued by the retailer, the product was never offered at the original price and the coupon represents a reduction in the amount paid and the tax. If the coupon is issued by the manufacturer, the original price is still paid but some of the price is covered by the manufacturer instead of the consumer and the full price remains taxable.