Why not? It’s Free with Coupons

18 Jul, 2013

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Few terms get couponers more excited than the word “free”.   But should you always take items that are free?

Many bloggers say they will buy anything if it is free.  Responsibly, they often donate items that they can’t use to food banks and shelters.   My family does this a lot, even for items that have a small cost. Should you do this too?

First we should look at the concept of free.  “Free” is a marketing term, and in fact it is the single most powerful marketing term out there, surpassing even the word “New” for most shoppers.  But “Free” can still have costs to the purchaser.

Next, think about sales taxes.  About 60% of U.S. states offer sales tax exemptions on most groceries, excluding prepared foods, but that leaves 40% paying something to the taxman for free products.  In our home state of Georgia, there is a 2% tax on food and a 6% or higher tax on HBA items, and taxes are applied on the price before coupon discounts.  For people who are watching their pennies, even a small tax means that free items do indeed carry a cost.

Free items can also consume valuable storage space.  Who among us has truly unlimited refrigerator, freezer, and dry storage space?  Not long ago we had a stacked coupon deal that gave us better than free yogurts, including those cool new ones with the separate space for mix-ins like granola, almonds, and chocolate candies!  We brought home about 50 of these yogurts, which of course occupied an entire shelf in our fridge.  That limited our space for storing fresh foods and keeping leftovers for six weeks!  Then there are the extreme couponers on the TLC show who convert closets, showers, and even guest rooms to store their “free” groceries.

Then there are Buy One Get One (BOGO or B1G1) free offers.  Marketers love BOGO offers because of the power of the word free, knowing well that the average consumer will overlook an elevated price for the paid item.  The best way to view BOGO deals is to consider them as a package.  Are you happy buying the two items for the combined price?  If so, then go right ahead, just don’t let the word free overpower your normal shopping sensibility.  Don’t forget to include applicable taxes in your decision making.  The same logic should apply when there is a “free bonus” item attached to your product, such as a sample toothbrush attached to your toothpaste.

We can’t forget items that are “Free After Rebate”.  I admit to having a love/hate relationship with rebates.  As a marketer, rebates are fantastic because of the “breakage” rate.  Personally, I love getting rebate checks in the mail.  However, as a coupon blogger, I hate rebates because of the breakage rate and the hidden costs.  Breakage is a measure of the people who are influenced to buy items due to “Try Me Free” or “Free After Rebate” offers but fail to complete the offer, don’t send in the right materials, or fail to cash the check in time.  Breakage rates on rebate offers can be as high as 90% depending on the offer!  Many people also forget the hidden costs of taxes, envelopes, and postage, not to forget the value of your time and outlays.  Outlays can be particularly painful for people on tight budgets even if you are diligent in your rebate processing, since you will be “out” that money for 6 weeks or longer.   For these reasons I discourage all but the most organized of couponers from succumbing to the allure of rebates.

Lastly, let’s examine obtaining “free” goods for the purpose of charitable contributions.  From our work with our local food bank (permit me a shout out to the “North Gwinnett Cooperative”  www.northgwinnettcoop.org ), we learned that they need donations of pasta and pasta sauce, rice, beans, canned soups, peanut butter, jelly, dry cereals, and canned meats.  They really do not want condiments, which tend to be “free” most often.  While touring our coop, it was a funny sight for us, seeing hundreds of cans of Progresso Recipe Starters on the food bank shelves not long after this product had been available as a couponing moneymaker.  If you acquire goods for donation to any charity, which is really wonderful of you, just check their needs list before shopping.  This will allow your contributions to have the most positive impact possible, because not every “free” item is truly something that your charity hopes for.

So next time you see an offer for something free, just remember that free items usually do have some costs attached!

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