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Old Fashioned Coupons are back in style:



A Clip-And-Save Renaissance

Heather Hernandez walked into a supermarket with a stack of coupons last month and walked out with $160 worth of groceries, for which she paid $30.

"With the economy right now everyone wants to make their dollars go further," said Ms. Hernandez, a stay-at-home mother in Houston who clips and files coupons with the meticulousness of an accountant. "I see all kinds of people using coupons. I see teenagers using coupons. I see grandfathers using coupons."

It may be the digital age, but when it comes to pinching pennies, most consumers are opting for a method that is well over a 100 years old: the paper coupon. Thanks to the miserable economy, coupons -- like board games and family dinners around the kitchen table -- have made a comeback. The recession has even made coupon clippers out of some groups that once avoided them, including well-to-do shoppers and young shoppers.

"Coupons were not in vogue during our period of gluttonous consumption," said Kit Yarrow, a consumer psychologist in San Francisco and an author of "Gen BuY: How Tweens, Teens and Twenty-Somethings Are Revolutionizing Retail." "But now that it's once again cool to be cheap, they're back."

Coupon redemption in America peaked in 1992, at the end of a recession, when 7.9 billion coupons were redeemed, according to Inmar, a coupon-processing company. By 2006, that number fell to 2.6 billion and stagnated there through 2008.

As the economy worsened and consumer sentiment plunged, coupon redemption ticked up 10 percent in the fourth quarter of 2008, compared with the period a year ago -- the first jump in coupon redemption since the early 1990s. In the first half of this year, coupon redemption climbed 23 percent. Some 1.6 billion coupons were redeemed, leading Inmar to forecast that more than three billion coupons will be redeemed this year.

More of them are being redeemed by consumers who have long avoided coupons.

"The households that tend to not coupon as much are all couponing significantly more this year versus last year," said Neil Heffernan, senior vice president and general manager for the research company Knowledge Networks/PDI. The group's most recent figures show that in January and February combined, coupon use among young, single consumers with minimal savings rose 14 percent, in contrast to the same months last year.

Coupon use among another group -- affluent consumers born in the late 1950s and 1960s -- rose 13 percent in January and February, compared with the same months in the previous year. Data from Nielsen published last month underscored this trend, showing that households earning $70,000 or more a year were among the top coupon users.

Matthew Tilley, director of marketing for Inmar, said that coupon use was growing most among such groups and that they were the ones driving traffic to Web sites with printable coupons, like Redplum.com and Coupons.com. Redemption of printable coupons, which span the divide between old-fashioned paper coupons and newer digital versions, grew 308 percent in the first half of this year, from a small base.

"I believe it's not coincidental that the spike in coupon redemption began just as some of the worst economic news hit the front pages," Mr. Tilley said, adding that coupon-cutting is but one more way consumers are changing their habits. "Folks are going back to the basics," he said, "trying to live simpler lives."

Coupon redemption was also spurred on by marketers who dangled more valuable deals. Mr. Tilley said there was a 9 percent increase last year in the face value of coupons. That has declined slightly this year, though; marketers know more consumers are using coupons, and companies can afford to pull back a bit.

"It is a sign of the times," said Kelly McFalls, a spokeswoman for BJ's Wholesale Club, which accepts manufacturers' coupons. Underscoring the nationwide trend, more BJ's shoppers are using such coupons, as well as the BJ's store coupons.

Digital coupon use, on the Web and on cellphones, is also growing. In the first half of this year about 10 million digital coupons were redeemed, up 25 percent compared with the period a year earlier, according to Inmar. However, paper coupons still make up the bulk of coupons redeemed in the nation, with digital coupons accounting for less than half a percent of all coupons distributed.

The primacy of paper over pixels is partly because new methods of digitally distributing coupons have yet to fully catch on. It is also because many grocery and drug stores still offer coupons inside weekend newspapers. Indeed, in the first half of this year there was a 29 percent increase in coupons distributed for food products, in contrast to the period a year ago, according to Inmar. As Mr. Tilley put it, that "is going to boost redemption because everybody's got to eat."

Consumer psychologists posit yet another reason for the popularity of paper coupons: Because it takes more work to acquire them, the people who do so feel they have outsmarted other shoppers.

"Saving money so often means not doing something, as in not buying something," Ms. Yarrow said. "Coupon-clipping has a proactive quality to it that appeals to bargain hunters."

And though some consumers know about mobile coupon services like Cellfire, scholars say shoppers still have concerns about privacy and security. "In the same way it took a while for A.T.M.'s to catch on," Ms. Yarrow said, "I think it'll take a bit longer for the mobile coupons to become mainstream."

Coupon devotees see the enterprise as vast game of saving money, and they share tips through increasingly popular Web sites.

One of their strategies is to hold on to their coupons until the store puts those items on sale -- typically a month or so after the coupons are first offered. Coupon clippers who regularly save about half of their weekly grocery bill say it is because they watch store fliers to find out when items will go on sale and then use their coupons on top of the sale price.

"Sometimes the coupon brings you down to nearly zero dollars," said Susan J. Samtur of Scarsdale, N.Y., who is known in bargain-hunting circles as the coupon queen.

While some consumers dismiss coupon-cutting as too time-consuming, adept coupon users contend it is a matter of getting into the habit, though it does require discipline.

Longtime coupon users, for instance, do not keep coupons crumpled up in their wallets. They opt for small accordion folders with tabs for shopping categories that correspond to store aisles, like "baking" and "frozen foods." They keep scissors on hand. They clip coupons on Sundays and file them while on the subway, or while boiling water for spaghetti. And they paper-clip coupons to their shopping lists so they do not forget to use them.

Another way coupon clippers save is by shedding brand loyalty and buying whatever is on sale. Ms. Samtur, who hunts for coupons for consumers at Selectcouponprogram.com, is so good at it that she also shops for her adult children -- including the girlfriends of two of her sons.

"I'm paying 30 cents for the yogurt, and they're not fussy," she said, "so long as it's the low-fat ones."

Also, coupon mavens point out that even if a coupon expires, stores may be flexible about the rules for their own coupons. Ms. Hernandez of Houston, who chronicles her deals at freebies4mom.com, recently spent more than $50 on groceries, then found out she missed a deal for $10 off any purchase of $50 or more. She went back to the store with her receipt and got $10 back.

"It never hurts to ask," she said.
(Source: NYTimes.com, 09/24/09)

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