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Coupon usage likely to rise at a good clip

Posted on: November 4, 2008

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Coupon usage likely to rise at a good clip
From The Tacoma News Tribune Business Section
NANCY TREJOS; The Washington Post
Published: October 31st, 2008 12:30 AM | Updated: October 31st, 2008 01:46 AM

WASHINGTON – Talia Holston used to spend about $150 a week to feed herself and her three children.
Then she started using coupons, trolling the Internet for the best ones. Now, she spends about $200 a month on groceries. She once walked out of a CVS pharmacy having spent $50 for $200 worth of items.

“Sometimes, it really feels like I’m robbing them,” the Washington, D.C., resident said. “I sometimes feel bad.”

That is, until she looks at what stores are charging for food and toiletries these days. “The price of everything seems to be rising,” she said. “When you walk out spending half what you would have, that feeling is mind-blowing.”

More Americans are trying to get that feeling, consumer behavior experts said. With wages not rising as quickly as the cost of basic necessities, coupons are back in favor after many years of steadily declining popularity, experts said. Eager to lure customers into stores, many merchants are not only offering more coupons, but they’re also experimenting with creative ways to deliver them, such as text-messaging them to cell phones. Consumers, meanwhile, are becoming more savvy about finding good deals thanks to Web sites devoted to coupon-clipping strategies.

“Marketers tend to send more coupons or issue more coupons during an economic downturn, and consumers redeem more,” said Peter Meyers, vice president of marketing for ICOM Information & Communications, which conducted a survey on coupon usage. “Both are motivated. Marketers want to get more revenues, and consumers are motivated to get more savings.”

Coupon usage peaked in 1992, when nearly 8 billion were redeemed for nearly $5 billion in savings, according to CMS, which processes coupon payments for merchants. Usage then started declining at an annual rate of 5 percent to 7 percent. Last year was the first year it did not decline, with 2.6 billion coupons redeemed for savings of almost $3 billion. Survey organizers said that number could be higher this year, as food prices have climbed at a faster rate than in previous years. According to the Bureau of Labor Statistics, the price of food increased by a seasonally adjusted annual rate of 7.5 percent in the first nine months of the year. For all of 2007, it increased 4.9 percent.

“Were we not in this economy, we probably would be looking at a slight decrease again,” said Matthew Tilley, co-chairman of the Promotion Marketing Association’s Coupon Council and director of marketing for CMS. “There’s definitely an increased interest to use coupons for savings by consumers.”

Recent studies have shown that this is just one way people are changing their shopping behavior to stay within tighter budgets. A Booz & Co. survey conducted last month found that people were switching to less expensive grocery stores, buying more store-label products and making fewer impulse purchases at the cash register.

In a survey of 1,000 people released last month, the Coupon Council found that 89 percent had used coupons when shopping for groceries, household or health care items.

Experts said they expected coupon usage to grow. Of the 1,529 U.S. consumers surveyed by Toronto-based ICOM this spring, 67 percent said they would be more likely to use coupons during a recession. It didn’t matter how old they were. People of all ages – from 18- to 24-year-olds to baby boomers to retirees – said they would turn to coupons.

Dianne Murphy, a 44-year-old resident of Leesburg, Va., has three sons, ages 14, 12 and 8. She plans meals for the entire week and spends part of her Saturdays studying her coupon options. She estimates that she saves about $40 with coupons. “That’s something,” she said. “I feel like I’m not just leaving money on the table.”

Holston, a management analyst for a government contractor who is also studying to get a Ph.D., started using coupons in January. “I just got to the point where I felt I had to do something to save money,” she said.

She found TheGroceryGame.com, which sends her a weekly list of the lowest-priced products at her supermarket along with manufacturers’ coupons and specials.

Now she has three coupon organizers. When she finds good deals, she buys the items in bulk. Her linen closet, refrigerator and freezer are packed. Sometimes, she has so much that relatives descend upon her home to help themselves to some of her food.

Erin Gifford, 34, has a laundry basket in her Ashburn, Va., home filled with toothpaste, Jell-O and Cheerios that she got free. She always keeps an envelope of coupons in her purse.

She once found a 75-cent coupon for Gum toothbrushes and used it on a double-coupon day at a Harris Teeter store. The original price of each toothbrush was just $1, so Harris Teeter paid her 50 cents to buy each brush. She bought 20 and donated them to charity because she prefers her electric toothbrush. Along with the toothbrushes, she got two bags of pretzels and two tubs of Edy’s ice cream, all for 49 cents.

With three kids and an au pair living in her house, she needs the savings. “Things are much more expensive now. Eggs are up. Milk is up,” she said.

But she also admits to simply cherishing the thrill of it all. “It’s kind of a game when you find those deals,” she said. “When you get that, it’s a bonanza.”

Tips for using coupons

Clip ones you use: Kim Danger, a family-savings expert who runs MommySavers.com, said you should start out small. Clip coupons only for items you know you will use. “You don’t have to clip every coupon,” she said.

Many people mock coupon users, saying they spend too much time trying to perfect their strategies for a minimal amount of savings. The typical family saves $5.20 to $9.60 per week using coupons, the Coupon Council found. Peter Meyers, vice president of marketing for ICOM Information & Communications, said he sees an average of 10 percent to 25 percent savings on grocery bills.

Brand-name coupons: Manufacturers such as Pillsbury and General Mills have created coupon galleries on their Web sites. Even grocery store chains that in the past relied on their in-store circulars to advertise specials are now making their coupons available online.

Some retailers have even banded together to offer each other’s coupons on their Web sites, as long as the products don’t compete, said Steven Boal, chief executive and founder of Coupons Inc. On BettyCrocker.com, for instance, you can find coupons for Energizer products. It’s not just groceries; increasingly, people are using coupons for DVDs, electronics, clothing, even services such as oil changes.

Still, of all the coupons out there, the paperless ones make up no more than 1 percent. That’s because printing coupons off the Internet requires paper and work. And some retailers accept only the old-fashioned ones you clip out of a newspaper.

Online discounts: Plenty of Web sites, such as CouponMom.com and CouponCabin.com, offer tips and/or spot good bargains. You can also try to get your Sunday newspaper early to study coupon offerings. Don’t forget to check the manufacturers’ or brands’ Web sites. Consider scouring eBay for coupons. Shoppers often exchange coupons that way. Remember to check store receipts or the product boxes themselves – they often come with coupons.

Track prices: Danger suggests becoming a more informed shopper by keeping track of the prices of your favorite items at stores you frequent. But also be willing to try new brands if you can get a better price for them. Make sure you know your store’s policies. Ask if they accept competitor’s coupons or match other stores’ prices.

Combine deals: Be sure to combine your coupons with store sales. Shop on double- or triple-coupon days, when your coupons will count for more, then use any manufacturers’ rebates you can find.

The Washington Post


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