In a recent article from the Orlando Sentinel, some major stores and brands are looking to cut down on their discount coupons and various promotions.

Coupon use began to skyrocket shortly after 2008 as companies needed to find ways to keep people shopping. These last few years of heavy coupon promotions and discount offerings have taken its toll on some brands. Many businesses are finding it increasingly difficult to manage their many promotions as well as remain profitable considering some of the extreme discounts that have been offered.

If you would like to find out exactly how a few major brands are changing their coupon policies, you can check out the Orlando Sentinel article. Instead, what will be discussed here are some of their major changes and some potential effects.

Companies are either vastly reducing the coupon savings offered, or even getting rid of coupons altogether. The latter is, of course, highly risky. Let’s touch on that one first. Getting rid of all published coupons? Now that’s a gutsy move. All of a company’s customers that only consider shopping with you because of the coupons that they can use will now be looking elsewhere. This is definitely a test of how strong their brand really is. It is possible that the CEO of such a company is willing to take this risk because he or she knows that they can always reinstate their discount promotions in case too much business is lost. It does not matter if you lower all of your prices instead of offering coupons. Too many people love the idea of getting an extra discount. We’ll see if this pans out for them. Mr. Komodo wishes them luck. They’ll need it.

A much wiser decision would be to gradually roll back the coupon discounts and promotions that are currently offered. In this way, customers can slowly be weaned off of the high discounts that they are used to receiving. This will be much less of a shock. Businesses can promote lower general prices in addition to less coupon offerings to ease this loss of promotional discounts.

In a way, all of this is more good news to those companies that can still effectively offer coupons online. As more brick and mortar stores roll back their discount promotions, more people will be looking for deals on the Internet. Companies that sell both online and off can still utilize this newer medium to remain very coupon savvy. It can definitely be considered a win-win. Stores that mainly rely on in-store purchases must find a way to make it even more appealing for their customers to shop from home. This trend is definitely not going away. The sooner businesses can adapt to this digital future, the more customers they can keep. They can still offer all of those great coupon deals that we all love so much.

Being the frugal dragon that he is, Mr. Komodo likes to keep informed about trends in the coupon and daily deals industries.

He recently stumbled upon a good article from practialecommerce.com. The article basically analyzed the current “daily deals” companies to see how things might be shaping up for them in the near future. The main focal point came from the point of view of the merchants that have been doing business with the main players like Groupon and LivingSocial. The question that the article attempted to answer was, will merchants do more or less business with the daily deal sites in the near future?

Although these sites and the business that they do are not predicted to dwindle much, Mr. Komodo agrees with the main conclusion of the article. One of the main predictions is that more merchants will need to see a better return on investment from these new social coupon services. In a typical situation, a merchant has to not only severely cut the prices of a given product or service, but then obviously split revenue with the daily deal company. This leaves little-to-no profit left for the merchant.

This can end up turning into some kind of mass advertising campaign that is very unlikely to increase profits for the merchant. Most of the analysis so far shows that a high percentage of daily deals consumers do not purchase much in addition to the original coupon. For many merchants, the only way that they make money is by turning a daily dealer into a long term, repeat customer. This has not been the case for most merchants.

A very shocking and unfortunate statistic about consumers here is that about 20% of these purchased coupons go unused. That’s right, this easily amounts to hundreds of thousands of dollars, if not millions in money down the drain. The merchant and the daily deal site keep the money, but the consumer obviously loses here.

Google and PayPal also have big plans for getting their slice of this coupon pie. Google Offers is currently in 20 different markets as part of their “beta testing”. PayPal plans on hitting the mobile market pretty heavy with a GPS feature on smartphones to offer location-based deals.

While the initial allure of these companies and the discount coupons they offer starts to wear off, it seems that they are not going anywhere anytime soon. Mr. Komodo thinks that they will fade much sooner. It appears to be very unstable for 2 out of 3 of the parties involved. One possibility for longevity here is that the coupon companies might have to accept much less revenue and offer lower discounts. This just might make the merchants want to stick around for a while and keep working with these coupon giants.