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Why do coupons have a "cash value?"


Why do coupons for food always say they have a value of 1/100th or 1/20th of a cent?

1590 day(s) ago

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cabbagehead
This stems from legislation made back in the 1930's to protect small grocery stores from unfair competition.

Back then trading stamps, what most people refer to as "green" stamps, were offered by stores to draw in customers. Each time you spent a certain amount, you would receive a stamp which could be used to buy goods at a stamp store or traded in for cash. These cash claims varied widely, often with a bait-and-switch: the value would be very high to get people to start shopping at a store, then later dropped. People would be unwilling to switch because they already had some stamps collected.

Several states enacted laws requiring a common cash value to be printed on these stamps to stop these scams. Many of these laws are still on the books, and they cover all coupons. Since they're state laws, national coupons have to include the value disclaimer so they're legal wherever they're used, but local coupons might not if they're printed in a state that doesn't have a common value law.

Technically, you can send in one hundred stamps to the issuer and receive a penny, but the cost of shipping the coupons far outweigh what you could possibly earn.

Posted 1590 day ago

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