How do coupons work?

I’ve often seen people offer coupons for popular domain registars like GoDaddy. How do they work? Is it like a affiliate or reseller?

It depends on coupon, mostly it’s a promo company of registrar itself, but there are some people offering affiliates on forums, they take money for referring

Yes. But in the case of affiliate or reseller each reseller or affiliate has unique ID. Which is used. Coupon code as rule created only one to attract more users to use this or that company and get some discounts of course.

I’ve often seen people offer coupons for popular domain registars like GoDaddy. How do they work? Is it like a affiliate or reseller?

In Godaddy’s case, yes, some work as affiliate codes. In other cases (e.g. Namecheap), a coupon is just a coupon.

As for the end user coupon is the way to save some money. Other thing is what relationships do the person which share coupon and the company have.
Nowadays coupons unfortunately becomes a part of affiliate program.
But as Dan said - the coupon code policy depends on the web hosting company only.

You enter in coupon code and get a discount on domain. If coupon is invalid then you are not able to get the discount. Godaddy has an area for this when purchasing a domain.