The Many Ways Retailers Use Coupons to Trick You Into Spending More

The thrill of scoring a killer deal can often blind us to the actual math of the situation. Here are some ways retailers and brands leverage coupons and deals to get you to spend more.

Coupons Aren't Always a Deal

Before pushing out a coupon code, many online retailers will jack up all of their prices to full retail. This is especially true with clothing websites like American Eagle, Ann Taylor, Gap and Old Navy. They'll often release a 20%-off coupon that ends up saving you less than last week's site-wide sale. Make sure you examine pricing history and if there are no current sales, the coupon code is not that big of a deal. When shopping online, the real savings come when you can combine a coupon code with a site-wide sale.

Also, beware of the BOGO coupons like "buy one, get one for 50% off". This comes out to be a 25% off coupon in terms of savings. If a retailer regularly has coupons that provide more savings, it's nothing more than a spending trap.

Coupons Cause You to Ignore Generics

Don't automatically assume a manufacturer's coupon is going to get you the best price on a given product. For example, last week I was at the drugstore with strict orders to buy allergy medicine for our daughter. I was about to buy Benadryl with a coupon that brought the price down to $8, when I noticed the generic equivalent for $6.50. I went with the generic and threw the coupon in the garbage on the way out the door.

It's easy to get caught up in the mindset that if you have a coupon, you need to use it. A manufacturer's coupon is only useful if it gets you the best price compared to all equivalent options. The best price on that version of a product may not be the best price overall.

Coupons You Buy Can Expire

Sites like Groupon and LivingSocial are banking on you buying coupons on a whim and letting them expire before redeeming. Consider this scenario: You see a killer Groupon for 50% off a tandem skydive and jump at the chance to cross it off your bucket list. Then a couple months go by, and you think to yourself "What the hell was I thinking, I ain't jumping out of no plane," or worse yet, you completely forget you bought the deal and it expires. This happened to me recently with a golf coupon and I vowed to never let it happen again. I instituted a 30-day rule; if I know I'll use the coupon/deal in the next 30 days, I'll buy it. But if I'm on the fence in the slightest, I pass. Then I make the reservation ASAP and get it on the calendar.

However, if a Groupon or LivingSocial coupon does expire, remember that it isn't useless. In fact, it only loses the promotional value. For example, if you buy a $99 spa package for $50, and it expires, you still have a $50 credit to that spa—you'll just have to pony up an extra $49 for the difference. (Of course, you're still spending even more money that way—the sunk cost fallacy comes into play here, so only spend the difference if it's worth it to you!)

Clipping Coupons Might Not Be the Most Efficient Way to Save

If you're using grocery coupons to build a "stockpile" of grocery and household items, you're probably losing money in the whole deal. The idea of a stockpiling 40 bottles of hot sauce and 23 boxes of cereal sounds okay until you consider the value of your time. Let's say you spend 10 hours a week clipping and organizing coupons (extreme couponers often spend more) and it saves you $400 a month on your grocery bill. You're essentially valuing your time at about $9 an hour, which is below minimum wage in most states.

Unless you particularly enjoy clipping coupons, that's not a great wage. If you're going to spend 10 hours a week on that kind of work, consider a more lucrative (and enjoyable) side hustle, or focus on getting a better paying job altogether.

The "15% Off $49+" Coupon Dilemma

Many coupons require you to purchase a certain amount before getting a discount, which is an obvious trick to get you to overspend. Here are a couple workarounds.

When shopping online, hit up live chat and ask politely if they can remove the minimum threshold for you. If your order is within $10-$15, they'll often do it, or give you a different coupon with no minimum purchase required. I have had success with this at many web sites, including Lands' End, Office Depot, Home Depot, and Bass Pro Shops.

When shopping in store, never walk in with one of these coupons unless you know you're going to reach the minimum. If you do end up in the store, and are determined to use the coupon, consider purchasing add-ons you actually need or can use as gifts. If you're feeling lucky, you can add items to your purchase to reach the minimum, then try to return unwanted items later without your receipt. You might end up with store credit, but if it's a store you shop at fairly regularly, that's still a pretty decent win.

By understanding how scoring deals can change a frugal mindset to a spender's mindset, you can avoid the traps. After all, a deal is only great if you actually need the product and are getting it at a price point lower than the norm.