Snipping Away at Inflation

For many consumers, coupons and refunds are a way of life

EPOP 20 forms traded 1-4-1. No CO's, rebates, sweeps. Send wish list and one current qualifier 50 cents or over.

To an ever increasing number of Americans, such gobbledygook makes sense, dollars-and-cents sense. Typical of thousands of similar classified ads carried weekly by more than 100 specialized newsletters, the message signals to a dedicated legion of supermarket shoppers that essentially the advertiser wants to trade 20 refund forms. While couponing and refunding are hardly new--one of the first cents-off offers was devised in the 1890s by C.W. Post to perk up sales of Postum--they have accelerated in recent years at what might be called a rapid clip. With inflation grabbing from household budgets, those cents-off coupons and money-back refund offers have become more than an appealing way of stretching the food dollar: to many they are a way of life.

"You meet the most fantastic people doing couponing," says Betty Buckley, a Marietta, Ga., housewife with eight children who estimates that she saves $2,000 a year with coupons and refunds. When groups of friends gather for "swap meetings," she says, "you can be sure you all have something in common--inflation." Mary Janoyan, 33, a Troy, Mich., housewife, boasts of saving an average of $200 a month on her household budget. Says she: "If couponing and refunding were stopped tomorrow, I'd have to go some place for my withdrawal symptoms."

According to Government figures, 76% of American households do some snipping and clipping. More than 1,000 manufacturers now use these discount devices, spending at least $1 billion a year in payouts and redemptions. Some 100 billion coupons will be circulated this year in newspapers, magazines and direct-mail bundles. Not all of them are authentic, it seems. The Chicago Tribune reported last week that it had uncovered evidence of widespread theft and counterfeiting of newspaper coupons and special inserts.

The coupons are apparently sold at a fraction of their face value to grocery stores, which pass them on to clearinghouses and manufacturers to be cashed in at full cost.

The FBI confirmed that it was conducting a nationwide investigation of the practice, which may involve fraudulent redemptions of $250 million a year.

Manufacturers put more faith in coupons and refunds than in TV commercials to move highly competitive staples like coffee, pet food, breakfast cereals, cigarettes, soft drinks and soaps. Consumers, eyeing the manufacturers' huge promotional budgets, sense that they are paying for the discounts and may as well take advantage of them. Says Kerry Smith, head of information services at Donnelley Marketing, a national mailer of grocery-store coupons: "Our estimate is that if one uses coupons consistently throughout the year, one can save anywhere from $300 to $500 on the grocery bill."

Many addicts claim to save far more. Susan Samtur of Yonkers, N.Y., who publishes a couponing newsletter called Refundle Bundle, once demonstrated her saving ways on television by conducting then NBC Consumer Reporter Betty Furriess on a supermarket tour. Samtur wound up paying only $7.07 for $130 worth of groceries.

Cheryl Pevehouse, 30, the wife of a physician in Columbia, S.C., and mother of three children, is a dedicated discounter who has saved as much as $5,300 on her grocery bills in a good year. She puts out a monthly newsletter called Market Wizard ("cash from trash") that goes to 132,000 subscribers. Like most other discounters, she is middle to upper-middle class. (Poorer consumers tend to go for the greater direct savings on lower-priced no-name brands.) As Janoyan puts it, "It feels like upper-middle-class poor to us. If it weren't for my couponing and refunding, we'd be on the broke list right now." qed

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