Couponing can help you save money, whether when buying a favorite brand or trying a new product. However, you must also take into account the amount of time you spend on couponing as part of this equation. In addition, couponing might lead you to buy more than you intended because it feels as if you can snag a discount.
Here, you’ll learn the ropes of smart couponing, plus its pros and cons.
What Is Couponing?
Couponing means redeeming discounts on goods and services, which can seem like an easy way to save money. Coupons are created by businesses and retailers as a customer acquisition tool (that is, they encourage people to try a product for the first time) or they could be a customer loyalty device (a way of rewarding steady consumers with a discount).
Coupons take several forms, including:
• The old-fashioned way; paper coupons clipped from newspapers, store ads, and mailers.
• The instant way, via apps for discount codes on everything from dinner out to Target finds (20% off dresses, anyone?).
Coupons tug at a person’s budget-wise motivation to save money. But read on to learn if coupons are worth your time and energy.
How Does Couponing Work?
Merchants want you to shop for their brands, so they dangle discounts. When these arrive in the mail or email, on a cash-register receipt, or in a print publication, you will likely need to clip them out and bring them with you to a retail location or enter the pertinent information when purchasing online.
In terms of digital coupons, you will often have to create an account with your email address and a password to get coupons or discount codes. This is an important trade — you get, say, a 10% off welcome code and in exchange, the merchant gets your contact information to potentially reel you in with more deals.
Both paper and virtual coupons typically have expiration dates. More and more often, online merchants do “flash sales” and short-term offers with a tight time window to get you to click spend your money without much pause. This can lead to impulse purchases.
Keep in mind, the business goal behind coupons is to get you to spend money, not put it into your bank account.
Recommended: How to Coupon for Beginners
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Are Coupons Used Today?
Coupons are still quite popular today. According to a recent CouponFollow report, over 90% of U.S. households used at least one coupon in the last 12 months. Many people prefer digital coupons to paper ones. Downloading coupons on your phone is quicker than using scissors to cut along the dotted lines. The average percentage saved with an online coupon was found to be 21.9%.
How Many People Use Coupons?
As noted above, over 90% of American households say they used a coupon in the most recent year. This figure isn’t necessarily related to income. One study found that 86% of households earning $200,000 or more per year used coupons in a given year.
Another sign of coupons’ popularity: A full 80% of shoppers said they only sign up for store or brand emails to get the coupons offered.
Types of Coupons
Merchants are getting more inventive with the kinds of coupons and discounts they offer shoppers. Here are some of the popular ways you can likely access deals.
• Set up a user account with email and password on favorite shopping sites. By joining the rewards club, if there is one, they can also unlock digital codes and get merch rebates.
• Download your grocery chain’s app and link weekly digital coupons to your account.
• Follow brands on Instagram and Facebook to watch for discounts and free shipping codes on social media.
• Use couponing and discount services that add an extension to your browser and then let you know about coupon codes available when you shop online. Check reviews and ratings of these before downloading, however. Honey and Ibotta are popular for couponing, but many have mixed reviews.
• Look for the physical coupon with purchase. Yes, some companies still do coupons the old-fashioned way. Boxes of powdered laundry detergent may come with coupons inside, or frozen pizzas may have stickers on the pack that you peel off to get a discount.
Why Do People Coupon?
Consumers coupon to save money or get things free. A discount or freebie can inspire a person to try a new product or a brand other than the one they usually buy. In this way, the company issuing the coupon may build their customer base and their sales. Coupons can also reward loyalty. For instance, you might get a coupon for 10% off your next purchase from a particular brand or retailer.
A bit of history: The first coupon reportedly came out in 1888, when Coca-Cola offered them, good for a free sample.
Benefits of Couponing
Couponing has its pros, for sure. These include:
• Trimming your expenses, and using the money saved to reach other financial goals.
• Having fun. Couponing has some aspects of a game, which can make it feel like a fun way to save money.
• Sharing the wealth with your family and finding better deals, thanks to coupons, on such expenses as school supplies and uniforms, sneakers, electronics, and home furnishings.
• Scoring discounts on lodging, car rental, and other travel expenses.
Recommended: Why Saving Money Is Important
Drawbacks of Couponing
The chase for discounts can, however, have downsides, such as:
• If you scoop up items you would not have otherwise bought just so you use a coupon, you could wind up buying things you don’t need or even really want. Do you need tropical fabric softener, or are you just eager to use the coupon?
• Coupons can encourage over-buying. For example, if you need to purchase four boxes of cereal to reap a discount, you may have food sitting unused. (That said, buying in bulk to save money can be an effective tactic if done properly.)
• Consumers may feel under pressure to use coupons before they expire in order to be a “good shopper.” It’s a misconception that not using a coupon is losing “free” money. It’s not free; you’re still spending your dough to get the discount.
• Coupons can be inconvenient. Remembering to carry and use paper coupons requires financial discipline. Plus, it’s too easy to forget to redeem coupons attached to products in-store. Customers and cashiers may not detach the manufacturer coupon and scan it.
• Ironically, you might be tempted to overspend on other things after saving with a coupon. For instance, a 50% discount code on a clothing site may prompt you to buy other items you didn’t plan to purchase or really need.
Recommended: How Much Money Should I Save a Month?
Do Stores Lose Money by Couponing?
In general, stores do not lose money from offering or accepting coupons. In fact, they are more likely to profit.
Coupons encourage people to shop by offering an incentive: free merchandise or lower-cost goods. These offers entice people to try new products (and hopefully become loyal customers) and buy items that they might not have otherwise considered.
In addition, for brick-and-mortar stores, coupons encourage foot traffic. They tempt shoppers to come inside, where they might find more than just the coupon item that catches their eye. In these ways, coupons actually build sales.
Does Couponing Ultimately Save You Money?
Couponing can save you money if you are offered a discount on an item you were already planning to buy. Or perhaps offers you free shipping from an online retailer you love.
However, you could end up losing money in the long run if you’re not careful. If you spend two hours a week combing through coupon fliers just to save a dollar, it’s probably not worth it. Your time is valuable.
Lastly, coupons can lead to price creep. For instance, did you really save money if you budgeted, say, $50 for a skirt and got waylaid by a coupon for $25 off a purchase of $100? You went in planning to spend $50, not $75 (that is, $100 minus the $25 discount).
Recommended: Guide to Practicing Financial Self-Care
The Takeaway
Couponing and discount codes can be a smart, frugal move if you stick to buying products and services you would have purchased anyway and don’t get sucked into getting unnecessary items just to save a buck (or a few). But the coupon game takes time, patience, and organization.
If you want to track your spending and save money with minimal effort, here’s an option.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
Can you go to jail for couponing?
The typical act of redeeming a coupon is not illegal. However, Illegally creating, copying, or using coupons can land you in jail. A Virginia couple went to prison in 2021 for a combined 19 years after the FBI uncovered one of the largest coupon fraud schemes in U.S. history. Retailers and manufacturers lost more than $31 million when the couple used social media sites such as Facebook to sell counterfeit coupons to groups of couponers.
Is extreme couponing possible?
Yes, extreme couponing, in which people save a huge percentage off their costs, is real. Everyday people have saved hundreds of dollars in grocery stores. For instance, the top extreme couponers have shaved more than 90% off their bills in a study conducted more than a decade ago. But this is a serious endeavor demanding much time, energy, and planning, plus you might end up stuck with items you don’t want, need, or will ever use.
Is extreme couponing stealing?
No, extreme couponing is not stealing, but it’s not uncommon for stores to resent it if a shopper brings in a stack of coupons and spends very little money in the end.
Photo credit: iStock/monkeybusinessimages
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