How To Do the Coupon Thing. Part 1: What's the Use of Coupons?

Hi! We here at Mrs. Undomestic (and I say we, I mean the "royal we" since there is only little old me running the place) have come to a weird realization. There are people out there who are interested in coupons and have no idea how or where to start. I kinda knew they existed (and I truly understand that most couponers don't do it at my level and I'm not even that extreme) but until Saturday night, when I sat down and started talking to one of my best friends about coupons, that I truly realized that some people just don't understand the process and this is incredibly sad because it can save you tons of money (and, I have learned, some anxiety). So we're going to run a series on how to coupon.

So, What is the Use of Coupons?

Coupons can save you money, they can bring more food (or different varieties) into your home or they can do both. Right now I don't save a whole lot on groceries than I did before coupons, but I am able to provide a larger selection of food than I used to.

I think of coupons as a form of a gift certificate. I didn't have to pay much (a nominal fee, like my newspaper subscription or the price of ink) and I get free money to spend in return. Just like a gift certificate only works at one store, my coupon only works on one item.

To better explain, for the rest of the post, we're going to talk about 3 different types of cereal. Cereal A, Cereal M and Cereal Z. Cereal A is made by the ABC corporation and usually costs $3.50 per box but this week is on sale for $2.25 per box. Cereal M is make by the LMNOP corporation and usually costs $3 per box and is not on sale this week. Cereal Z is XYZ's store brand. Because it's the store brand, it usually costs $1.75 per box and is not on sale this week. If you get confused, refer back to this!

Don't Coupons End Up Making You Spend More?

They can, if you aren't smart about it. Let's say that we walk into XYZ to shop and have a $0.55 off coupon for Cereal A and a $1 off coupon for Cereal M. Since Cereal Z is a store brand, there are no coupons available. At first, having $1 off of Cereal M looks good, because it takes the price down to $2 from $3. But if you buy Cereal M today simply because you have a $1 off coupon, you will still be spending more money than if you bought Cereal Z, which costs $1.75. This is where coupons cost more. You spend money on stuff you don't need or buy something simply because "you have a coupon", it's a waste of money.

At the same time, you can save a lot of money using coupons wisely. Remember, we have a $0.55 off coupon for Cereal A. While the coupon may not look as valuable as the $1 off coupon for Cereal M, it will actually save you a lot more. Cereal A is on sale this week for $2.25. When you add the coupon, it takes the price down to $1.70 per box. This is actually cheaper than Cereal Z, so if you buy Cereal A, you save $0.05 per box of cereal (and trust me, the $0.05 can add up fast! Combining your coupons with sales is the best way to use them and the best way to save your money. I've walked out of stores with free merchandise thanks to coupons (I actually did it a couple times last week).

So Why Do They Give Out Coupons if It Makes Products Cheaper?

Simple, because the manufacturer and the stores make money off of them. I know this sounds counter-intuitive, but here's why. Let's say you buy Cereal A for $1.70 a box. You take it home and your family loves it. Turns out this is the best cereal they ever had and they want it every day. So next week, you find your family begging for Cereal A so you drive out to the store to buy more. It's no longer on sale, so now you're paying $3.50 for it. This is what the manufacturer's are hoping for when they give you coupons. You will try something "because you have a coupon" and it will become something you buy continuously, spending more money in the long run.

Stores like coupons too. The week that Cereal A was on sale, Store XYZ had a double shipment of Cereal A and has to get the boxes sold to make room on their shelves. Since you know that with your coupon, Cereal A costs $1.70 instead of the normal $3.50, you use 3 coupons and buy 3 boxes. This gets 3 boxes off their shelves and they will get an additional $1.89 for the sale. "WHAT?" you say? Yup, the store will get money for you buying Cereal A. The ABC corporation, like all corporations with coupons available, will refund the store the $0.55 cents you saved on the coupon PLUS $0.08 per coupon as a shipping and handling fee. So as long as you aren't trying to cheat the store (and you shouldn't!) the store gets more space on its shelves to stock product AND makes a small amount of money simply because you used a coupon.

So Coupons are Good?

Well, they can be. Coupons, if used correctly, will save your family money. Or, do as I did, and free up more money to buy other groceries, increasing the amount of food you are able to provide. Coupons, if used incorrectly, can cost you more money or decrease the amount of food you can purchase. So use your coupons wisely!

Up Next, Where Do I Get Coupons?

This is the first part of a series. Check out the rest:

Part 2 
Part 3