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Thanks to their famous, ubiquitous 20% off coupons, Bed Bath & Beyond has always been known as a place where you never, ever have to pay full price. All you have to do to get a coupon is look in your mailbox, in the newspaper, online, in your junk drawer, under a seat cushion, or you can just walk down the street and one will probably fall from the sky and land in your hands – because those coupons are everywhere.

But now, that’s finally changing.

After years of dispelling alarmist, inaccurate reports that it’s cutting back on coupons, Bed Bath & Beyond is now quietly starting to do just that. And some shoppers, and investors, aren’t pleased about it.

In its quarterly earnings conference call with investors yesterday, members of Bed Bath & Beyond’s management team spoke several times about “optimizing our coupon strategy”, which turned out to be a euphemistic term for offering fewer, less valuable, more restrictive coupons.

“The direction is to reduce the reliance on the coupons,” CEO Steven Temares said. He explained the “optimization” effort as involving “coupon exclusions, adjusting our value offers and limiting coupon availability”. That means coupons cannot be used on an increasingly long list of specific brands and items. Fewer coupons are being offered, and those that are, are becoming less valuable than the traditional 20% off.

One displeased shopper recently visited Bed Bath & Beyond’s Facebook page to post a photo of a coupon torn in half, offering 20% off a single item “now”, or 10% off if it’s not used within a week. “These go right in the trash!” the shopper wrote dismissively.

Temares insisted that “better analytics”, “personalization” and assessing “the lifetime value of a customer” was helping the company to make “better decisions” about how many and what types of coupons to offer, and who receives them. “Of course, actions like these do have a near term impact on sales,” he acknowledged. But “those decisions are being made with great specificity to make sure that they are driving overall profitability.”

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Cutting back on coupons is only one change that Bed Bath & Beyond is making, as it eyes the bottom line. The company has also raised its free-shipping order minimum to $39, up from $29. And it recently tightened up its famously lenient return policy. If you have a receipt, you now have six months instead of a year to return an item. And certain electronic items must be returned within 90 days, or less. If you don’t have a receipt, you’ll get store credit for 80% of the item’s purchase price. Why 80%? That’s “the item’s current selling price less 20% to account for the possible use of a coupon,” Bed Bath & Beyond explains.

So even the retailer’s return policy assumes you’ve used a 20% off coupon on your purchase – even though that may not be true anymore.

Bed Bath & Beyond’s stock price was down more than 10% this morning, as investors were unimpressed with both the company’s results, and executives’ efforts to improve them. A group of activist investors issued a statement before yesterday’s earnings call, urging the management team to “increase its level of disclosure and transparency” and asking a number of specific questions it wanted answered, including “What is the current coupon attachment rate and how has coupon value and attachment rate trended over time?”

After the call, the investors issued a followup statement expressing disappointment with what they heard. “We were deeply concerned to hear management suggest, during the fourth quarter call, that they were going to reduce coupon availability to improve profitability. Our proprietary consumer survey work indicates this is a risky path to pursue,” they said. “In our view, it does not make sense to make any couponing adjustments prior to executing on initiatives that would fundamentally improve the in-store experience for customers and drive retail traffic.”

“The optimal path forward,” the investors group concluded, “is removing the entire Board and hiring a new CEO.”

For years, Bed Bath & Beyond management would follow a script, with minor adjustments, in their quarterly earnings conference calls. Profits were either up because of “a decrease in coupon expense”, or down due to “an increase in coupon expense”. Every time the company suggested that its coupons were hurting profitability, some observers would conclude that the only takeaway was that coupons must be on the way out – a conclusion that occasionally set off outright panic as the inaccurate narrative took hold. “Bed Bath And Beyond May Ditch 20% Off Coupons!” one alarmist headline blared a few years back. Another went so far as to print “A Eulogy for the Bed Bath & Beyond 20% Off Coupon”.

Temares tried to dispel this perception back in 2017. “We are not getting rid of the coupon,” he insisted. “We understand how important it is and the value of it.”

But times, it seems, have changed – along with Bed Bath & Beyond’s fortunes. Several years ago, a risky, unpopular and unprofitable coupon strategy cost JCPenney’s CEO his job. Time will tell whether upset shoppers and impatient investors see to it that Bed Bath & Beyond’s boss will meet the same fate.

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