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Bed Bath & Beyond Is Struggling With Its Shoppers’ Coupon Addiction

Photo: Diane Macdonald/Getty Images

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Bed Bath & Beyond's profits fell 10% in its most recent quarter, and the Washington Post reports that the big box home store is pinning part of the blame on that stack of BBB 20% off coupons you have piling up. The company said the downturn in profitability despite a rise in revenue of 1.7% is largely caused by "an order of magnitude increase" in expenses related to coupons.

That means that shoppers at Bed Bath & Beyond have become conditioned to always use a coupon there, instead of viewing them as an occasional perk. Seth Basham, a retail analyst at Wedbush Securities, told the Washington Post that the coupons are "expected now by most shoppers." Not only that, shoppers hoard them. "You can walk in with a handful of them," he said, and use them on your entire purchase.

Bed Bath & Beyond's constant stream of coupons builds consumer loyalty and motivates people to walk through the door, as Racked reported in a feature about the store's finely-tuned strategy. The retailer does need some people to shop there without coupons, though. Retail analyst Warren Shoulberg told Racked back in February that Bed Bath & Beyond was "among the best retailers getting the formula right, and they also count on a certain number of shoppers to shop at full price—that’s where they are making margins."

In April, Racked exclusively reported that Bed Bath & Beyond changed its famously generous return policy, a policy that previously allowed customers without a receipt a full refund of a returned item for "an exchange or merchandise credit." Now, the company deducts 20 percent from returns that don't have receipts or a record of purchase.

In addition to its current coupon conundrum, the Washington Post also reports that Bed Bath & Beyond is reconfiguring its marketing efforts online via e-mail and social media and is trying to grow its digital sales. The company just acquired indie e-commerce shop Of a Kind in August.

Physical stores are still a major priority for Bed Bath & Beyond, though: a 100,00-square-foot store that includes Bed Bath & Beyond, buybuy Baby, Cost Plus World Market, and Harmon Face Values will open in Brooklyn in 2016. Meanwhile, the company recently opened "specialty departments," which offer more health, beauty, and food and beverage options in 200 of its 1,520 stores.