The death of the coupon

Paper coupons appear to be headed the way of the VCR.

Grocery chains, food and drug manufacturers, and even coupon marketers themselves are going electronic. The concept is almost as simple as scissors and the Sunday paper: Visit a Web site, type in your loyalty codes, and find all the coupons waiting for you, electronically, at a store's cash register or on your cell phone.

The hope is that these electronic discounts will revive the dying coupon business. Only 0.5% of the 285 billion coupons issued last year were redeemed, according to coupon processor NCH, down from an average of 1% a decade ago.

Part of the problem is that newspaper readership is declining, so fewer people are looking at the Sunday circulars. The younger shoppers sought by marketers read their news online. And fewer people these days have time to clip, organize and sort coupons each week.

But apparently, we all seem to make time to surf the Net and talk on our cell phones, so these areas are where the industry is casting its net for savers.

"We are committed to reaching our customers when and where they are most receptive," says Jenifer Nunnelley, a Procter & Gamble spokeswoman.