Friday, May 18, 2012

JC Penney's Change to Coupon Policy Backfires

In recent months, J.C. Penney made a huge change to their pricing policy that was meant to make life easier for the consumer. With an everyday low price strategy, shoppers would no longer need to clip coupons to save money at their local J.C. Penney retail store. The change also meant that online shoppers no longer had access to any dollar or percent-off J.C. Penney promotion codes. As of this writing, the only online coupon code for use at is for free shipping on $50 or more.

What J.C. Penney failed to recognize is that coupons are fun! For many savvy shoppers, it's a game to be played to see how the best deal can be had. By taking the fun out of finding the extra discount, J.C. Penney hurt their bottom line.

Do consumers like the new policy? It's doubtful, based on the fact that J.C. Penney Co Inc (JCP.N) shares plunged on Wednesday. The recent "Do The Math" campaign hasn't helped, and even the name of the campaign suggests that consumers are just plain stupid, and don't understand the policy.

It may (or may not) be true that the consumer doesn't understand that the prices they get now are more consistent (and theoretically just as good) as those that were available in the olden days of the J.C. Penney coupon. What appears to be so is that the consumer doesn't like the new policy, and is looking for 'fun with coupons' at other stores.

In our opinion, this was not the time to take coupons away from consumers. Coupons for retail and grocery shopping and coupon codes for online shopping have become more popular than ever. In fact, we've seen a spike in the number of coupon codes in circulation, and the number of stores that offer them.

For J.C. Penney, we hope they can recover from this pricing mistake.

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