By Dianne Esber and Travis Walter

Saddled by debt and haunted by uncertainty, many US consumers have been bargain hunting with new determination. The number of coupons redeemed rose 25% between 2008 and 2009. And while the recession has officially ended, the atmosphere of austerity and uncertainty has lingered, and thus, the popularity of coupons has continued to grow. In fact, coupons threaten to become fashionable – witness the fuss over Groupon’s IPO and the email inboxes stuffed with online coupons.

In 2010, American consumers and businesses used coupons to make $9.3 billion in purchases, compared to $7.2 billion in 2007. By 2014, that figure could rise to $11 billion. With US consumers in a frugal mood, couponing is not going to go away. For businesses, though, coupons have significant economic consequences—and they need to be handled with care.

Far from being a habit of lower-income individuals, it is wealthier consumers who clip, save and spend the most with coupons. Among “coupon enthusiasts” for example—households that used more than 100 coupons over a six-month period—41% earned more than $70,000 per year. According to one online poll, coupon-friendly households with six-figure incomes were twice as likely to use coupons as those making less than $20,000.

Methods for finding these coupons are changing. While free-standing inserts in the Sunday newspapers, in-store clipping and mailed coupon packs are still the most common ways consumers pick up coupons, email and the Internet are rising fast (36% growth per year since 2005). Easy to develop and quick to deploy, the appeal of online coupons is easy to appreciate. Moreover, redemption rates are much higher—up to 15% compared to 1% for traditional outlets—and digital coupons are much more likely to go viral.

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