Those 20% off coupons allowed them to price an $80 item at $100. If the customer has a coupon, they get that item for as low as the store is willing to sell it

Those 20% off coupons allowed them to price an $80 item at $100. If the customer has a coupon, they get that item for as low as the store is willing to sell it for -- which works out to be market price. But if they lack a coupon, they're likely paying above-market price, and that's extra revenue for the store! Granted, this is an oversimplification, because many people might decide not to buy the item at a perceived above-market price. But I think, in general, coupons work. JCPenney famously got rid of coupons in 2012, and the customer outcry and effect on its stock price forced them to restore them soon after.