The Scoop on Coupons

(Note: This piece was written in the early-mid '90s, so some of the dollar figures are a bit dated! Nevertheless, this is still a very helpful and relevant analysis of whether or not coupon usage is a good deal!)

From Amy Dacyczyn's The Complete Tightwad Gazette:

It feels like tightwad sacrilege to suggest that there might be anything wrong with coupon use. But consider that manufacturers provide coupons to entice consumers to buy their products. Multiple coupons for a single product, which have decreasing values, such as 75 cents off, 50 cents off, and 25 cents off, are a dead giveaway that they hope to hook you by creating a habit.

There's a right way and a wrong way to use coupons. All coupon users believe they are using coupons the right way. "I never use a coupon to buy something I wouldn't buy anyway." However, if a majority of users did it the right way, manufacturers would be losing money and would stop offering coupons. So, consider the following questions:

How much do coupons really save? Readers frequently send me sales slips to demonstrate how much they save using coupons. With bold sweeps of colored markers they circle the figure that shows how much the coupons used added up to. They're circling the wrong figure. The most important figure on your sales slip is how much you spend on groceries...not how much you save using coupons.

Sometimes, even with doubling your coupons you might be spending more money on items than if you had resorted to a different strategy. Always compare the price after coupons with alternative products, making the same item from scratch, or not buying the product at all (As in the case of things like soda, candy, etc.). [...]

Even if the price after coupon is less than an alternative coupon, users frequently fail to calculate the true savings. Let's say you get $1.00 off brand A spaghetti sauce, which costs $1.89. Brand B, a sauce of equal quality, costs $1.29. Obviously you buy brand A, but your savings is not $1.00--it's really 40 cents. This may seem like I'm quibbling. But it's important to understand your genuine savings because coupon use takes time. You need to know how much extra time you're spending compared to how much money you're saving. You also need to factor in the cost of obtaining the coupon, if there is any, such as the purchase of magazines and newspapers.

How much time do coupons require? Reports from readers vary. Some claim they only spend a few minutes extra per week. These individuals are modest coupon users who tend to be very organized. An excellent way to do this is to keep your coupons is a small file box and organize them by type. On about the 20th of each month you should go through your coupons looking for ones that might expire. Always take your file box with you when you shop. You might run across an unexpected sale or a good deal in the damages bin.

On the other end of the spectrum, very serious coupon users, those who also spend time refunding, can spend as much as 10 to 15 hours per week clipping coupons, studying sale flyers, soaking off and filing labels, and saving packaging and receipts. [...] Sometimes refunders boost their coupon and refund results because family and friends save their proofs of purchase and coupons for them. In this case the coupon user/refunder benefits because an original purchaser paid an inflated price.

Another time element often not considered is how much additional time is spent in the supermarket. It takes more time making individual price comparisions and purchases. In contrast, other strategies, such as bulk buying of sale items, reduce shopping time.

What do people buy with coupons? Our family generally uses coupons to buy nonfood items, and food items that cannot be prepared from scratch. But most food coupons are for convenience foods. Often the foods are more processed. Even when these items can be purchased cheaply, it should be considered that your family is acquiring a taste for these more expensive and less healthful items. This could potentially create bigger grocery bills in the future. Many of the products have more packaging as well. So even when Jell-O Pudding Snack Paks are near free, I seriously question these purchases because of the environmental issue of the excess trash created.

What about the "Coupon Queens" featured by the media? Most of us have seen newspaper articles or television shows featuring coupon experts who demonstrate their skills by taking reporters shopping and buying $134.86 of groceries, but after all the coupons are subtracted pay only $54.73. This type of shopping trip requires months of planning, and is not typical of these shoppers' usual trips to the store. On the average these shoppers claim their real savings is closer to 25-40%. Again, it's important to remember that these are savings on the prices of products that may be inflated in price.

Consider the real figures sent in by Mary Kenyan of Independence, Iowa. She saves 10% to 30% on a grocery bill of $385 per month. She feeds a family of six, with four children ages 2 to 11. Her grocery bill does not include her husband's work lunches, but they never eat out.

Figuring that she saves an average of 20% on her grocery bill using coupons, she actually spends about $308 per month. She receives $110 per month (after postage) from refunds. Of that figure roughly 65% comes from refunds from itemds she purchased at the grocery store, or $71.50. She has offsetting expenses of about $12.54 for additional postage and magazine and newspaper subscriptions. [...after figuring out true savings] this works out to a bottom line grocery bill of $249.04 per month. In addition she receives roughly 10 free gifts per month of varying values through refunding.

The average family of six spends $500 per month on groceries. In comparison, Mary's grocery budget compares well. However, with very little coupon use many families of equal size spend under $200 per month on groceries. A mixed approach, which includes some coupon use, will produce the lowest possible grocery bill. Readers have written that when they began to incorporate other strategies, they used fewer coupons and their grocery bills dropped.

If you genuinely dislike couponing and refunding, use other strategies (like gardening, bulk buying, and baking from scratch) that will save you as much if not more money on your grocery bill. If, however, you find that refunding and couponing is an enjoyable hobby, and you genuinely are saving money, this is a valid way to spend your time.