The Many Ways Retailers Use Coupons to Get You to Spend More

The thrill of making a murderous deal often prevents us from seeing the true mathematics of a situation. Here are some of the ways retailers and brands use coupons and deals to get you to spend more.

Coupons are not always beneficial

Before issuing a coupon code, many online retailers raise all of their prices to full retail. This is especially true of clothing sites like American Eagle, Ann Taylor, Gap, and Old Navy. They often issue a 20% discount coupon that ultimately saves you less than last week’s site-wide sale. Make sure you read the price history and if there are no current sales, the coupon code doesn’t really matter. When shopping online, the real savings are when you can combine a coupon code with a site-wide sale.

Also beware of BOGO coupons such as “buy one get one 50% off”. It turns out that this is a 25% discount coupon in terms of savings. If a retailer regularly has coupons that generate more savings, it’s nothing more than a spending trap.

Coupons make you ignore generics

Don’t assume that a manufacturer’s coupon will automatically give you the best price for a given product. For example, last week I was at the pharmacy with a strict order to buy allergy medicine for our daughter. I was about to buy a Benadryl with a coupon that brought the price down to $ 8 when I noticed the $ 6.50 total equivalent . I went with the generic and threw the coupon in the trash at the door.

It’s easy to get bogged down in the idea that if you have a coupon, you need to use it. A manufacturer’s coupon is only useful if it gives you a better price than all equivalent options. The best price for this version of the product may not be the best price overall.

Coupons you buy may expire

Sites like Groupon and LivingSocial are betting that you buy coupons on a whim and let them expire before maturity. Consider this scenario: You see the killer Groupon with a 50% discount on tandem skydiving and grab the chance to cross him off your wishlist. Then a couple of months pass and you think to yourself, “What the hell did I think I wasn’t jumping out of the plane,” or worse, you completely forget you bought the deal and it is about to expire. This happened to me recently with a golf coupon and I vowed that I would never let it happen again. I have introduced the 30 days rule; If I know I will use the coupon / deal within the next 30 days, I will buy it. But if I am even a little on the fence, I pass by. Then I will place the order as soon as possible and add it to the calendar.

However, if a Groupon or LivingSocial coupon does expire, remember that it is not useless. In fact, it just loses advertising value. For example, if you buy a $ 99 spa package for $ 50 and it expires, you still have a $ 50 credit for that spa – you just need to spend an extra $ 49 for the difference. (Of course, this way you still spend even more money – this is where the unk cost fallacy comes into play, so only spend the difference if it’s worth it!)

Clipping coupons is not the most efficient way to save money

If you use grocery coupons to create a “stock” of groceries and household items, you are probably losing money as a result of the entire transaction. The idea of ​​hoarding 40 bottles of hot sauce and 23 boxes of cereal sounds fine until you appreciate the value of your time. Let’s say you spend 10 hours a week clipping and organizing coupons (extreme coupons often spend more) and that saves you $ 400 a month in your grocery bill. Basically, you value your time at about $ 9 an hour, which is below the minimum wage in most states.

If you don’t like clipping coupons, this is not the best paycheck. If you’re going to be spending 10 hours a week doing this kind of work, consider a more lucrative (and enjoyable) part-time job, or just focus on getting a better paying job altogether.

The $ 49 + 15% Discount Coupon Dilemma

Many coupons require you to purchase a certain amount before getting the discount, which is an obvious trick to get you to spend too much money. Here are a couple of workarounds.

When shopping online, enter the chat and ask politely if they can lift the minimum threshold for you. If your order is in the $ 10-15 range, they will often do so or give you another coupon with no minimum purchase. I have had success on many websites including Lands’ End, Office Depot, Home Depot, and Bass Pro Shops.

When shopping in a store, never come up with one of these coupons unless you’re sure you’re going to hit the minimum. If you do go to a store and decide to use a coupon, consider buying add-ons that you really need or can use as gifts. If you’re lucky, you might want to add items to your purchase to hit the minimum and then try to return unwanted items later without a receipt . You can get store credit, but if it’s a store that you shop at on a fairly regular basis, it’s still a pretty decent payoff.

By understanding how closing deals can change a sponsor’s mindset, you can avoid pitfalls. After all, a deal is only good if you really want the product and are getting it at a sub-par price.


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