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Why do grocery store coupons say “cash value 1/20 of a cent”?

Dear Cecil:

Why do grocery store coupons always say "cash value one twentieth of a cent"? Why should anybody care?

Tony W., Phoenix

Cecil replies:

Coupons are given a cash value in order to comply with laws in a few states that classify them with trading stamps. As I assume you know, the cost of trading stamps to the merchant is always incorporated into the price of his merchandise. Since you’re paying for them whether you want them or not, some jurisdictions require that the stamps be redeemed in cold cash if the customer so demands. Coupons are a little different than trading stamps, of course, but the law is the law. The cash value is set high enough to be legal, but low enough so that nobody will actually bother to collect the things.

Cecil Adams

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