Coupon Industry Makes “Milk” Go Sour

Many non-couponers thought it was genius. More experienced couponers found it pointless. But some in the coupon industry apparently considered a new coupon app to be dangerous – leading to its recent sudden disappearance for some unspecified retooling.

The app, called Milk, debuted late last year, prompting a wave of positive reviews on various technology websites in November.

But six weeks later, it vanished.

“On December 31st, we will be temporarily ending support for the Milk app and withdrawing it from the App Store,” read a notice posted on Milk’s website last month. “We are working with manufacturers and grocery stores on a new version of Milk that delivers a better experience for more people.”

So what happened? We finally have some clues – the problems appeared to be what Milk did, and how.

The app was created by the founders of Honey, a browser extension that searches for online coupon codes and automatically applies them to your purchases. Milk had a similar premise. At the touch of a button on your phone, the app would search through every available digital coupon and automatically apply the pertinent ones to your grocery purchases. No clipping, no searching, just saving.

The app accomplished this by linking to all of your grocery loyalty accounts, and essentially clicking “select all” on each of the stores’ digital coupon pages. With every single available digital coupon – hundreds, perhaps even thousands – loaded to all of your loyalty cards, something was bound to apply to your order and save you some money.

And the cost for that convenience was $9.99 a year.

At the time of the app’s launch, a story here on Coupons in the News speculated that manufacturers were unlikely to be thrilled about the concept. If the point of a coupon is to promote a product and incentivize someone to purchase it, then an app that allows consumers to get a discount without ever seeing the promotional message, without ever clipping the coupon, and without even being aware that they received a discount on that particular product, kind of circumvents the whole point of the coupon.

There’s also the matter of “per clip fees.” Manufacturers typically pay a digital coupon host site a small fee for each of their coupons that are clipped – regardless of whether they’re ultimately used. If Milk is clipping hundreds or thousands of coupons each time a user presses a button – multiplied by however many users it might eventually attract – that would cost manufacturers a lot of money to benefit shoppers who have no intention of ever using most of their coupons.

So someone objected. Milk’s team isn’t saying who, but they acknowledge that automating the coupon-clipping process, without rubbing coupon issuers the wrong way, is tougher than they thought.

“The Milk app was designed to be a grocery coupon app for non-couponers by removing the friction that prevents so many of us from participating in the ecosystem,” Honey co-founder George Ruan told Coupons in the News. “Even though removing the friction will lead to a massive expansion of the overall market, some players are more interested in defending their existing interests to ensure maximum value extraction.”

So it’s back to the drawing board. Milk already had challenges, in that some digital coupon programs don’t have a “select all” option, and many have a limit on how many coupons you can load to your account at one time.

But its founders likely didn’t count on some in the coupon industry standing in the way of the app’s very existence.

Still, they’re confident they’ll be back, in some form, eventually. “Our commitment to help introduce more people to the money-saving benefits of grocery coupons remains strong and we hope to resume service soon,” Ruan said.

Or, as coupon issuers would likely prefer, people can just clip their coupons themselves. And, as they’d no doubt point out, you don’t even need a $9.99 app for that.