Coupon stacking looks like a loophole and is actually a consequence of who reimburses the store. Once the funding is clear, the rules about which coupons combine stop being arbitrary.
Manufacturer coupons are reimbursed by the brand
A manufacturer coupon is an offer from the brand to the shopper, with the retailer acting as the point of redemption.
The store accepts the coupon, gives the discount, and then claims the value back from the manufacturer through a clearing house, usually with a small handling fee attached.
Because the store is made whole, its margin on the sale is unaffected, and the brand has bought a unit of volume at a known cost.
Store coupons come out of retail margin
A store coupon is the retailer's own discount, funded from its margin and used to drive traffic or move specific inventory.
Nobody reimburses it, so its cost is real and immediate, which is why store coupons are usually smaller or conditional on basket size.
The two instruments are economically distinct even when they look identical on a page, and the difference is what makes combining them possible.
One of each is the standard rule
Because the funding sources are separate, most retailers permit one manufacturer coupon and one store coupon on the same item.
Two manufacturer coupons cannot both be claimed, since the brand will only reimburse once for a unit that was sold once.
This is the whole of the rule that shoppers describe as stacking, and the exceptions to it are almost always about where the money comes from.
Digital offers complicate the categories
Loyalty apps carry both kinds, and the distinction is not always visible in the interface, which is why a digital offer sometimes refuses to combine with a paper coupon.
Some systems automatically choose the single best offer rather than applying both, and others load a manufacturer offer to the card in a form that blocks the paper version of the same promotion.
Cashback apps sit outside this entirely, since they pay after the fact and are funded by a third party, which is why they generally combine with everything.
Why the total is capped at the shelf price
Registers will not usually reduce an item below zero, and most coupon terms prevent value being applied to other goods.
Overage, where the coupon exceeds the price and the difference is credited elsewhere in the basket, is permitted by few retailers because it converts a discount into cash.
That cap is the practical limit on stacking, and it is enforced at the register rather than in the coupon terms.