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Archive for Sunday, July 10, 2005

Coupon clipping

Practice can add up to more than just a few dollars here and there

July 10, 2005

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It seems bit old-fashioned in this high-tech world of self-serve kiosks and electronic transfers, but the humble paper coupon is still one of the best ways a shopper can save money.

The average coupon user saves more than 11 percent on weekly grocery bills, according to the Promotion Marketing Association Inc., a trade group in New York City. The association estimates that coupon users saved $3 billion in 2003, the last year for which figures are available.

"I'm a little bit of a tightwad: If you can save a dime, you save enough dimes and you have a dollar," said Don Willson, a Lawrence resident who saves $5 to $10 a week using coupons at Dillons and Hy-Vee stores in town. "It's no different than driving an extra mile or two to save 10 or 20 cents (a gallon) on gas. If they're going to give it to you cheap, I'll take it."

Although more than three-quarters of U.S. consumers use coupons, only about 2 percent of all the coupons issued each year by manufacturers are redeemed, statistics show.

Contrary to the stereotypical little old lady snipping away at her Sunday newspaper, coupon use is common among all ages of adults, studies show.

And it's not just the poorest of us who do it. About 80 percent of those making between $50,000 and $75,000 use coupons, the highest percentage of any economic group. Only 70 percent of those making $25,000 to $50,000 use coupons.

Clipping coupons - such as 35 cents off laundry detergent, or 40 cents off a can of pork and beans - only takes a few minutes and pays off with more than financial savings, Willson said.

"It's not going to change my way of living," said Willson, a former Concordia superintendent of schools who now teaches math at Washburn University and works as a legislative lobbyist for United School Administrators and the Kansas Retired School Personnel Assn. "It's just a fun way to shop."

Historians trace the origin of the coupon to Philadelphia pharmacist Asa Candler.

Origin of savings

Candler had bought the formula for a new drink for $2,300 but had trouble getting people at his soda foundation to try it. He began distributing handwritten tickets offering customers free glasses of the drink in 1894.

Tips on clipping coupons

Coupons can help consumers save money, especially by keeping in mind the following tips gleaned from experts:

¢ Make sure the coupon is worth it. Another brand or a generic may be cheaper than the product you buy with the coupon.

¢ You may want to wait until close to the expiration date to use the coupon. Manufacturers often inflate prices at the beginning of a promotion, then bring them down toward the end. The risk of this is that the manufacturer runs out of the product.

¢ Don't buy a product just because you have a coupon. You may feel like you're saving money, but you could end up spending more on things you don't really want or need. Use coupons only for those items you usually buy or those you've been thinking about trying.

¢ Watch out for in-store promotions. If someone in a grocery store gives you a free sample of a frozen pizza, he or she usually hands you a coupon with it. Many consumers feel obligated to buy it.

¢ Use coupons on the smallest packages of the product. That will give you the highest percentage of savings.

¢ Try to increase your savings by using a coupon when an item is already on sale.

We now know the drink as Coca-Cola, and Candler died a rich man.

The following year, businessman C.W. Post distributed coupons toward the purchase of his new health-oriented cereal, Grape Nuts.

From that time on, coupon clipping developed into a pastime of American homemakers.

The latest twist in the coupon's story has been the advent of Internet coupons.

Coupon Web sites allow users to sort coupons by type, then click and print those they find most valuable.

Some popular sites are smartsource.com, coolsavings.com and valupage.com.

Almost all of the services ask for basic personal information, such as name and hometown.

As valuable as they can be, Internet coupons have created a whole new problem for retailers. With high-tech copying equipment and excellent forgery skills, con artists began producing fraudulent Internet coupons that look like the real thing. Sometimes the amount of the coupon or expiration dates were changed. Other times the fraudulent coupons were completely fabricated.

Shawn Brown, store manager of Hy-Vee, 4000 W. Sixth St., said that his store had a "huge problem" with fraudulent coupons within the past year.

The perpetrators took real coupons for high-priced items - such as baby formula, which can run up to $25 a can - and ran them through a computer to change the savings from $1 to $10. Some even made the products free.

But like with recent reports of counterfeit $100 bills making the rounds among Lawrence retailers, store officials quickly took note and warned their employees to be on the lookout for the problem documents. Brown said that clerks took extra care to review coupons, moves that cost customers a little time but helped cut into store losses, which in turn helps keep prices low.

"We try to stop it before it happens," Brown said.

Scams costly

Coupon abuse costs manufacturers and retailers hundreds of millions of dollars every year. Estimates vary from a low of about $300 million annually to more than twice that amount, according to the Coupon Information Corp., a trade group devoted to fighting coupon fraud.

Another common coupon scam is selling or trading coupons over the Internet or otherwise. Con artists will rope in unsuspecting consumers to clip and sell coupons illegally.

The Coupon Information Corp. has asked eBay to stop allowing coupon auctions, but the Web site has so far declined. However, eBay has prosecuted coupon sellers whose practices it deems particularly egregious.

According to Coupon Information, even trading coupons is illegal. No one is going to arrest neighbors who trade diaper coupons for cat food coupons, but widespread trading is a target for legal action.

Coupon abuse increases costs for consumers, because the costs of abuse often must be reflected in prices.

Coupon Information advises consumers not to take part in any auctions that involve the transfer of electronic files or unlimited, Internet or home-printed coupons.

Business editor Mark Fagan contributed information to this story.

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