No, customers are not rational beings. Despite this, you have a promotion that is either time limited or numerically limited. That is the very definition of a promotion; it is limited and it ends. Despite their general lunacy, most customers understand this. You, as a manager enforcing these limits, are beholden to your superiors, who are beholden to all stakeholders. It is your and your company's job to balance the intent of the promotion with the execution of the discounts. If the intent is to move that product out then, by all means, run a no limit sale. There are plenty of them, and I see nothing wrong with that. Simple examples are dollar or percent off sales on a particular item for a set amount of time, generally to move out the product.
This does not mean that, when the promotion ends, you keep giving the discount out to all and sundry. This is counterproductive. Your normal sales price is set where it is for a reason. Limited promotions are used because of this. As mentioned earlier, there is a set number of discounts that a company decides that it is able to absorb. If number is 100, and you give out 750, this heavily affects the net profit. Also, if you make these kind of exceptions once, you are expected to do it for everyone, every time.
It should also be of note that customer loyalty is not involved when dealing with the 'steep discount' crowd. They are wedded to the discounts and, other than some slight level of brand preference, they will shop where the price is the lowest. It is not possible to sustain a business with the dubious 'loyalty' of these customers unless you are in the business of discounted retail or food. Take a look at the behavior of some people when it comes to gas prices. I have heard it said more than once that gasoline is the only product in which people will go miles out of their way and waste time in order to save pennies.
I own and operate a grocery business, and do not use coupons for all of the reasons that have been brought up. I use limited time targeted price reductions, and these are effective for what I need, which is to move out old product. I do not use sales to encourage people to shop because, when all is said and done, my prices undercut the chain grocery stores by quite a bit. If I go much lower than my regular prices I make no money. Not only do I not make money, but the customers come in to buy the sale items and nothing else, and I never see them again. None of them convert to loyal customers.
Back to the coupon example from Hardee's. This was a real example which, unfortunately, was more common than you might think. I spent 12 to 15 hours in the store 5 days a week. Do you think that my regular customers tried that? No, they did not. Do you think that, even if I gave that massive discount that I would ever see them again? No, I would not. People that try this sort of thing are generally people that found a stack of coupons and wanted something for nothing. Now, though the coupons were limited to 1 per customer, I had a policy to let them use multiple coupons in the order as long as they did not stack. They are going to use them at some point, so why not let them use them all at once. My hard line stance came from the stacking of multiple coupons affecting the same item and people wanting the limited BOGO coupon discount constantly with no coupons.
Something else to think about, and this applies to retail as well as fast food. As a manager, your allowable payroll generally derives from the sales. This often does not take excess coupons into account. If you turn in $250.00 in coupons and you actually gave $1000.00 in discounts, your allowable payroll takes a hit. This affects your ability to properly serve your customers.
Naturally, I am not any more likely to change your mind than your are to change mine. We are on opposite sides of the fence, and there is certainly room for both opinions. I would, however, like to do something that is rare here. I would like to thank you for an interesting and thought provoking discussion.