Charging $3 dollars will mean you $2 of profit with 50% of your customers, and $0 with the rest (as they won't buy it). The coupon strategy will make you $3 wit

Charging $3 dollars will mean you $2 of profit with 50% of your customers, and $0 with the rest (as they won't buy it). The coupon strategy will make you $3 with 50% and $1 with the rest. The cost of issuing the coupons themselves is small. Not only is the coupon strategy twice as profitable for you, more customers are walking out of your store paying a price they were happy with, so you've likely got higher consumer satisfaction. Hence why price discrimination is somewhat win-win.