New “Dynamic” Coupon Values Could Change in the Blink of an Eye

Often, people in one part of the country can get higher-value versions of the very same coupons in their Sunday inserts than others do. But soon, you may find the values of your coupons are different from those of your close friends, next-door neighbors and even the person in front of you at the grocery checkout. Your coupons may even be worth more or less than they were a few minutes ago – or a few minutes from now.

That could be where digital coupons are headed, as described in a newly-published patent application by technology company IBM. Its “method for dynamic coupon pricing” envisions a world in which digital coupons don’t have defined values. Instead, their values will change based on who you are, where you are, how popular the offer is, or even the weather.

Until now, “digital coupons, like paper coupons, have all had fixed and unvarying discounts,” the application reads. But “because a digital coupon is not printed on paper, its value can be stored in a flexible format.”

That “flexible format” means that you and other shoppers might be offered coupons of varying values – or that you might be offered a coupon with a value you don’t even know until you go to check out.

Surprises at the checkout are fun, aren’t they?!

Coupon issuers spend a lot of time and effort targeting certain offers to specific regions, shoppers or retailers. If the return on investment is not what they had hoped, they can tweak their formula the next time around.

But IBM’s system will allow them to do it in real time.

The company describes digital coupons that could change based on a number of factors. “For example,” the documentation reads, “one retailer may wish to issue a coupon with an initial high value, which decreases over time, in order to encourage prompt purchase of an overstocked item.” Or “values may change dynamically during the day, to encourage shopping during otherwise slack times.”

If you provide some of your personal information to the coupon issuer, or when signing up for your store’s loyalty program, coupon values can even be tailored specifically to you. Are you a member of the military? Your coupon might be worth more than a civilian’s. A student? You could get better coupons as a reward for good grades. Active on social media? You might get higher-value coupons based on how many times you share them, or how many followers you have.

And that’s only the beginning, IBM says. “The targeting can be based on user profile (age, gender, income, military status, grades, academic or sporting achievements, and other consumer parameters), user location, user’s purchase history, social network interactions, weather reports, time of day, time of week, user’s wish list, current inventory levels at nearby retail outlets, and the like.”

Coupon issuers could even set aside a fixed dollar amount for a particular promotion, and set coupon values accordingly – the more people who redeem a coupon, the lower the value becomes, so the coupon issuer isn’t on the hook for more than it budgeted for.

But how will you know how much your coupons are worth before you redeem them? For coupons with values that change frequently, a feature described as “optional but highly desirable” would allow you to check the current value before you decide whether to use it. Or you could sign up to be alerted when a variable coupon value reaches, or falls below, a certain dollar amount.

It all sounds great, if you’re one of the lucky ones who ends up scoring better coupons. But the whole system could get awfully complicated. If you typically redeem lots of coupons at a time, you could spend a whole lot of time and effort checking their current values, or weeding through dozens of alerts, for each and every digital coupon you’ve “clipped”.

So if you thought couponing was time-consuming now, just wait. Whether it turns out to be more or less lucrative, though, may no longer be entirely up to you.

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