Friday, June 10, 2011

The Case Against Coupons

There's nothing wrong with coupons. Families use them to advantage; and the larger the family, the larger the advantage.

But Brett Arends, in his article posted to Yahoo! Finance, "Doing the Math on Coupons," part of a continuing series on Financial Fitness, goes overboard in his appreciation.

Citing statistics provided in a press release from a company called Inmar as his source, Ardent says that on average each coupon saves its redeemer $1.44. Estimating that each coupon requires about a minute to find, clip and file, that would be a savings of $86.40 per hour of work. And since this savings is tax-free, figures Ardent, he feels justified in rounding up that number to arrive at a rounder wage rate of $100 per hour for coupon clipping. Not bad.

Now I have no bone to pick with the statistics, nor with Ardent's calculations. But Inmar is a company that provides promotional services, including coupon operations, to retailers and wholesalers. They have a vested interest in promoting coupons.

Let's look inside the computations to see if Ardent's numbers are helping Inmar along.

If we estimate that each coupon redeemed saves on average 10% of the purchase price (the average is actually about 7%) , that would mean a family would have to purchase $864 in groceries each week to redeem all that they clipped. That's $1.44 x 10 x 60 = $864. This seems a little high for all but the Duggers, doesn't it?

So it's more likely that coupon clipping once a month, or even less often, will suffice for most people. It's a tiny part time job, nothing like the net of $1,200 per year projected by Ardent.

If coupon clipping is something you enjoy doing for yourself or your family, that's great. I say do it. But for many of the rest of us, it's a tedious practice, one better employed as something of a last resort rather than a lifestyle choice.

Photo courtesy of Copy Cop.

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