Extreme Couponing: 5 Reasons to Steer Clear

Last Updated Jul 28, 2011 2:40 PM EDT

This article is part of a package on coupons. Read the other article on Coupon Investing: How to Make $100,000 in a Decade.
I've been writing about money for nearly 10 years, and I've found that coupon advocates, in general, are a very protective bunch. I was recently critical of extreme couponing - à la the new TLC show with the same name - and, as expected, I got some unhappy feedback from readers.
My position was (and is) that if you're buying, say, 18 boxes of laundry detergent because you have a coupon, you've gone overboard. You may be buying more than what you need - which, in the end, is not smart spending. All things in moderation, right? Janet, a coupon devotee, responded via email and strongly disagreed. "You're wrong," she told me. "The fact that I have a stockpile of goods means more family vacations, healthy happy kids, and a mortgage that's paid off early."

But like it or not, there are some undeniable costs to coupons, especially when they're hunted down and used excessively.

Here's what research shows:

1. Most food-related coupons are unhealthy.

Couponers saved more than $3.7 billion in 2010 thanks to 50 cents off here and $1 off there. But most of those coupons went towards unhealthy products. We rarely see clip-and-save options for fruit, meat or organic foods. Instead, most coupons in the food category are for processed foods and snacks - otherwise known as "junk" food. The top 5 coupon categories compiled by CouponsInc.com in 2010 were:

  • Ready-to-Eat Cereal
  • Yogurt
  • Refrigerated Dough (e.g. cookie dough and biscuits)
  • Portable Snacks (e.g. pudding cups, cookies and chips)
  • Vegetables

It's nice to see vegetables finally making the list. In the past they were nowhere to be found.

Why most food tied to coupons is unhealthy is a case of unfortunate economics. "Coupons are usually issued by big companies with deep pockets, because the setup of a coupon business is quite expensive," says Hemi Weingarten, founder and CEO of Fooducate, an iphone app for scanning and choosing healthy groceries. Businesses, in fact, spent more than $45 billion on promotional marketing in 2009, including coupons, according to VSS Communications. "Many of the healthy food brands are too small and cannot afford it. And since most produce is not branded, there is not enough of an incentive along the supply chain to provide coupons," says Weingarten.

Cheap, processed and unhealthy products have some of the highest margins in the grocery industry, too. "They're very cheap to manufacture, and the brands still make a fortune even after the coupon discount," he says. "But when you think of your cost to manage diabetes after 20 years of drinking soft drinks, it starts to seem expensive."

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    Farnoosh Torabi is a personal finance journalist and commentator. She is the author of the new book Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life. Follow her at www.farnoosh.tv and on Twitter at @farnoosh.