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Lessons From J.C. Penney: Don't Mess With Coupons

Clothes on sales at a J.C. Penney store in Riverside, Illinois
Clothes on sales at a J.C. Penney store in Riverside, IllinoisPhotograph by Scott Olson/Getty Images

Mike Ullman’s direction for struggling J.C. Penney has yet to take shape, but at least one part of the new chief executive’s plan is clear: Coupons will be back. Customers hated ousted CEO Ron Johnson’s move to eliminate sales and coupons in favor of everyday low prices, and Johnson’s backpedaling came too late. “We worked really hard and tried many things to help the customer understand that she could shop anytime on her terms,” Johnson said during a fourth-quarter conference call. “But we learned she prefers a sale. At times, she loves a coupon.”

In theory, Johnson’s initial strategy made sense—coupons are unwieldy and have the whiff of downscale shopping, and discount programs are expensive for companies to maintain. Yet Johnson failed to take into account our country’s longstanding affection for those money-saving pieces of paper.