First, there was my knocking over a dressing room wall to avoid trying on dozens of sport jackets. Then, we discussed the merits and drawbacks of wholesale clubs. Today, we’ll chat about this question I originally posed last week in the context of shopping for food:
- Use coupons? Buy different things as a result?
According to a recent WSJ article The Coupon King, there were three billion coupons redeemed during 2006, saving customers about $2.6 billion. Despite all that money saved, about 99% of all coupons go unredeemed. Coupons are a most interesting discussion topic because, like all good thought-starters, there are plenty of implicit advantages and disadvantages.
Advantages of Coupons
- Save you money on the things you buy
- Give you an opportunity to try something without paying the full price
Disadvantages of Coupons
- Provide an incentive for you to buy items you might not otherwise buy
- Provide an incentive for you to buy more of the items you would already buy
- Provide an incentive for you to buy more expensive versions of items you would already buy
I’m sure we could come up with some additional pro’s and con’s (feel free to list yours below) but that’s a decent start for the big ones.
You: So do you use coupons?
Yes, I do–but carefully. I try to use coupons that allow me to receive the maximum advantage of coupons while minimizing my potential to fall into any of the traps listed above. When we receive and review coupons (typically along with our Sunday newspaper), we always cut out coupons for the things we regularly buy. (This includes a coupon for a local Mexican restaurant that we would go to anyway.)
But we don’t bother cutting out the coupons for anything else, because those coupons don’t really wouldn’t save us money and here’s why: if you’re happy with the item that costs $2.99 for 10 and you have a 75-cent off coupon for a competing brand that ordinarily charges $3.99 for 8, you’re not going to be saving any money. Get it? You’re not really saving 75 cents.
Instead, in the short-term, with the coupon, you’re paying 25 cents more for two less. In the long-term, it’s even worse as you may now prefer the $3.99 version and can’t seem to find the coupon anywhere.
Still, I think it’s worth it to spend a minute looking at the coupons. The last time I was in a wholesale club, there was a coupon sheet at the front of the store. None of the items I planned to purchase were on the sheet, but there was a buy-one-get-one-free coupon for a new cereal, different from the one I was planning to buy. I reasoned that if I was willing to try this new cereal, I’d be saving 50% ($7 for the mammoth box). Going forward, this new cereal was cheaper too. That was worth a shot to me, so I used that coupon.
Fortunately, my decision has been verified by the fact that the new cereal is just as healthy as the old version, and my two year-old now asks for the “New one” every morning. My daughter doesn’t yet have any financial responsibilities, but I think she’s already learned a key component of any saving strategy: flexibility.