I watched a show on extreme couponing last night. It was quite fascinating to watch these people go to the store and get hundreds of dollars of stuff for pennies on the dollar. A typical “take” on the show was someone saving 90-95% on the sticker price of an item. The show featured individuals doing their grocery shopping with lots of coupons, coupling the coupons with store specials and double-coupons run by certain grocery chains.

Like many people that turn to frugality, these extreme couponers seem to each have some kind of story about financial hardship that turned them to couponers. Then they just went nuts when they figured out how much they could save. One woman goes door to door to her neighbors and collects coupons, another dumpster dives, and others used a coupon clipping service (buying coupons).

Their persistence is admirable, their savings are amazing. But the show is doing a disservice to the “hobby”. First, these extreme couponers have way more stuff than they actually need. They also aren’t showing how much time these people spend on the search for coupons. Nor do they account for the cost of couponing. This is the cost of the coupon services, the loss of time searching for deals, and other costs like storage, gas to carry the hauls, and even the time they take out of store employees to help them with the hauls.

But the biggest disservice at all, is publicizing that this even exists. Retailers and product manufacturers are already aware of the couponers. And if the couponers are saving money, it means the store and product makers and losing money. As of right now, there are few or no limits on the coupons these people use. But the know these couponers exist. And many of the couponers featured on the show talk about “beating the store” or treating the store as something they should be beating. Stores don’t like to hear this.

Expect to see something, and I would guess soon, in the way of limits on the coupons. Stores will also limit how people can exploit store deals. You might see 2 for $4, limit 10 items per visit. Coupons will be limited to one per customer. And it would be very easy to enforce, any store database could change just a few lines of code to impose the limits. These people would be out of business.

To expect they will be able to continue this forever, is to assume you can always beat the market. They’ve found a loophole in a market that they are exploiting, With my finance background I’d call this an arbitrage opportunity. But arbitrage never lasts long. The difference is the people in finance don’t talk about their secrets. Advertising them to the world is pretty much the same as closing up shop. Arbitrage opportunities always close up.

Photo: hotcouponworld.com

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categories: business, personal finance