Consumers are using more coupons than they did before the recession, and 37.4% are using them "to stretch a limited grocery budget out of necessity," according to NCH Marketing Inc.'s "2010 Annual Consumer Survey".

If you're hoping to save money by using coupons, watch out because stores and manufacturers expect coupons to increase their total sales, which means you could end up spending more, not less. To protect your wallet, be aware of these strategies.

TUTORIAL: Budgeting Basics

Coupons expose consumers to a barrage of advertising. Coupons may offer discounts, but they're also a form of advertising. Whether you clip coupons from the Sunday circulars or print them from a website, you'll see ads for hundreds of products in the process. Sometimes these ads are accompanied by a coupon, and sometimes they aren't. Either way, they can get you thinking about buying things you might not have otherwise.

Loyalty cards, which are required to get the best prices at many stores, provide another link to advertising. They collect data about consumers' purchasing habits, and that information allows stores to send consumers targeted offers, says Stephanie Nelson, author of "The Coupon Mom's Guide to Cutting Your Grocery Bills in Half " and founder of the popular Coupon Mom website. (For related reading, see Best Loyalty Programs For 2011.)

Shopping Longer

Coupons may keep you in the store longer. It's a well known fact that the more time you spend in a store, the more money you're likely to spend. According to Paco Underhill's book, "Why We Buy: The Science of Shopping", how much customers buy is a direct result of how much time they spend in the store. To shop quickly and avoid unplanned purchases, Nelson recommends that shoppers make lists before they leave home and stick to them.

Coupons entice you to buy things you don't want or need. It's not unheard of to get a coupon for a gallon of milk, a dozen eggs or a loaf of bread, but these coupons are often for more expensive versions rather than basic products. Coupons for highly processed foods like frozen meals, baking mixes and kids' cereals are also common.

Nelson points out that more than 50% of coupons are for non-food items. If you can use coupons to save money on paper towels, toilet paper, diapers, cleaning products and other necessities, you'll be able to afford the produce, meat and other items that don't have coupons. (For related reading, see Drawbacks Of Travel Reward Programs.)

Pay Off Debt
A recent survey shows that consumers are doing just that. Eighty-two percent of respondents to coupon issuer, RedPlum's "2010 Purse String Study" said they put their coupon savings toward basic necessities or debt payments.

"I recommend shoppers focus their efforts on searching for and using the offers that are most relevant to them, and on things they use most," said Lisa Reynolds, Valassis vice president of consumer engagement. "Savings are within everyone's reach, and by spending 20 minutes a week, shoppers can save $1,000 annually."

Coupons sometimes require you to buy two or three items. A coupon for $1 off hot dogs might seem like a good deal at first, but then you realize that it's really for $1 off both hot dogs and a jar of pickle relish. A multi-item coupon can get you to buy something you otherwise wouldn't have.

According to the "2010 Coupon Facts Report" by NCH, a coupon clearing and marketing services company, 26% of all CPG (consumer packaged goods) coupons issued in 2010 required the purchase of two or more items to obtain the offer discount. Thirty-three percent of the grocery coupons required multiple purchases.

More Expensive Products
Coupons steer you toward more expensive brand-name products. Buying a name-brand product with a coupon usually is more expensive than a generic product without a coupon. There are a couple of ways to avoid this money-sucker.

You can locate coupons for a store's house brand of products in its weekly ad to combine generic-brand savings with coupon savings. You can also combine brand-name coupons with sales to generate savings that make the brand name item significantly cheaper than the generic equivalent.

Nelson says that the biggest mistake people make when using coupons is using them at the wrong time. When people clip coupons, they tend to use them that week, and manufacturers know this.

Three to four weeks later, there might be a sale where the item is 50% off or buy one, get one free. If consumers hold on to their coupons and wait for a sale, they can maximize their savings. Better yet, by acquiring several coupon circulars each week, consumers will have multiple coupons to use during sales and be able to stock up on their favorite items at low prices.

Coupons lure you to make discretionary purchases. The NCH report states that seven of the top 10 fastest-growing coupon categories are non-food categories, which can be attributed to the desire of marketers to make these purchases more desirable.

These items include oral hygiene products, laundry supplies, fresheners and deodorizers, household cleaners, personal cleansing and bath products, detergents and liquor. (General consumer discretionary spending and the related parts of retail are what define a good or bad economy. For more, see Using Consumer Spending As A Market Indicator.)

TUTORIAL: Setting Up A Budget

The Bottom Line
You may feel like you're saving a lot of money by using coupons, but stores and manufacturers print them for a reason. Stores get more out of the transaction than some coupon users realize. If you think about coupons from the seller's perspective, and keep your money-saving mission in mind, you'll be able to make better use of coupons to meet your financial goals.

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