The Red Stapler Chronicles

Welcome to The Red Stapler Chronicles. Please feel free to leave a comment or message on any of my posts. If you like what you are reading, please don’t hesitate to subscribe.

That being said, you are probably here to read this post that was featured in The Smart Spending Blog at MSN:

Here are some other posts that I think you might find interesting:

Money Lessons Learned From Famous Movies

Do We Need a Salary Cap for Ceo’s?

Stop Complaining About Gas Prices

The Starbucks Conspiracy

16 Purchases that Should Not be Made Frugally

You Can Win the Credit Card Game

Do you buy in bulk to maximize your savings? Do you only buy things from the clearance rack? Do bring a stack of coupons and the sale circular to every supermarket trip? If you answered yes to these questions you must be financially responsible and a savvy shopper, right? I say not necessarily. In fact, I believe that some bargain hunters can fall into traps that actually cost them money in the long term.

Now some of you are probably wondering what the heck I am thinking here. After all, sales, coupons, and clearance are usually considered good things. Well, let me share a retail insider secret with you about the term sale. All major retailers are required to post a pricing policy somewhere (it’s usually posted in the elevator) in their store that describes how they define sale items. The following statement (or a close variation) is something that you will find in ALL of their policies:

“REG./ORIG. PRICES REFLECT OFFERING PRICES IN EFFECT DURING THE 90 DAYS BEFORE OR AFTER AN EVENT, BUT NOT NECESSARILY DURING THE 30 DAYS PRIOR TO THE EVENT. SAVINGS MAY NOT BE BASED ON ACTUAL SALES. SOME ORIG. PRICES MAY NOT HAVE BEEN IN EFFECT DURING THE PRIOR 90 DAYS. INTERMEDIATE MARKDOWNS MAY HAVE BEEN TAKEN.”

This means that just because an item is advertised “on sale” doesn’t mean that is was a higher price before the sale. In fact, something labeled “on sale” could be at a higher price than it was the previous week. In addition, it is very possible that no one actually paid the original price on an item since a markdown can take place while the item is in transit to the store. Now that I have shared this industry secret, allow me to provide a couple of examples of how consumer with good intentions end up spending their money foolishly.

Trap #1– “I did great at the mall, everything I bought was 50% off or more. I saved so much money.” Yes, there are certainly deals to be found out there, but it is only a deal if you couldn’t have bought a comparable item at a lower price. As I stated above, the original price means nothing. Only research from several retailers will yield the result of how much you really saved. Furthermore, clearance shoppers often fall into a state that I would describe as a “feeding frenzy” in which they are calculating how much they think they are saving instead of tabulating how much they are really spending.

Trap #2–”I cut out 32 coupons from the Sunday paper and I used all but 2 of them. I also took advantage of several promotions that the supermarket was running as long as you used their club card.” It is important to realize why a manufacture puts out a coupon. If you think it is to help you save money, you are nuts. Quite simply, they want to attract new customers to try their products and help persuade those who might have used their products in the past, to give them another try. So, for the consumer, the coupon (or supermarket club card discount) is truly a good thing if:

1. You were planning to buy the product before seeing the coupon/discount

2. If the amount saved makes the product a better deal than the item that you would have bought. Thus, if you usually buy the store brand tissues at 99 cents a box, but you decide to use the 40 cents club card discount for the 1.69 kleenex, you are really loosing 39 cents instead of saving 40 cents.

Trap #3–”My favorite brand of ice cream was on sale. It almost never goes on sale so I bought six gallons. Good thing we have that extra freezer.” Buying in bulk can be a great way to save money, but you risk doing two things that can waste money. First, knowing that I had that much ice cream in my freezer would cause me to eat more of it than I normally would. As a result, I would be effectively spending more money than I intended. In addition, buying perishables in bulk can be risky. Imagine if you lost your power for a day, or the freezer door was left open and everything got “freezer burn.” Your ice cream purchase that saved you a couple of bucks would stop looking like such a good investment.

Don’t get me wrong here, I am a firm advocate of clipping coupons, taking advantage of sales, and buying in bulk. These are outstanding ways to make your dollar go further. But don’t think that doing these things means that you are AUTOMATICALLY saving money. Instead, sprinkle in a little discipline and product research and REAL savings will come your way.

This post was featured as an editor’s choice at the 139th Festival of Frugality