DO COUPON EXPIRATION DATES AFFECT CONSUMER-BEHAVIOR

Expiration dates are used by couponers to limit their financial liabil ity temporally. Traditional wisdom assumes that coupon redemptions are greatest in the period immediately following the coupon drop and decl ine monotonically. Using regret theory, the authors predict that expir ation dates induce a second mode in the redemption pattern just prior to the expiration date. They test this prediction by extending an exis ting coupon redemption model to incorporate an expiration effect and t hen estimating both the existing and the expiration models using weekl y coupon redemption data for spaghetti sauce from A.C. Nielsen panels in two cities. Results are consistent with their prediction. Implicati ons for practitioners and researchers are discussed.