Free shipping coupons are just what the name implies.  They allow you to give your clients free shipping on orders. 

Note that you are also able to create a free shipping option that is available without a coupon.  This would typically be used in a case where you want Studio Pickup to be available as an option.  The free shipping coupon would more likely be used in cases where you want to give your clients the option of actually having their order shipped without charging for it.