What does a retail store do with coupons?

Research on consumers and coupons is plentiful - often showing that it is lower income consumers and women that are most likely to redeem them. But have you ever wondered what happens after you turn your coupon into the store?

My husband and I were having a debate about coupons a few weeks back (this is what happens when you are married to a marketer, our discussion is always about marketing). We were at a grocery store and redeemed a coupon for $1 off a box of crackers. As we were walking around the store, we came to a debate about what happened to the coupons after you redeemed them. I had proposed a central office of each grocer that sorted through the coupons and mailed them back to the manufacturers once a month to get a refund check. My husband proposed the coupons were mailed back to the manufacturer and then given an allowance essentially on new product purchase. I ended up finding this interesting article (read it here) discussing the coupon process. The article discusses how the coupon is received by the store which is then transferred to a central point within the organization, and then transferred to a coupon clearinghouse who acts as the intermediary between the retail stores and manufacturers to ensure funding gets distributed where it should. So interesting!