I’ve talked about this before but recently have been seeing some “deals” that aren’t as great as they seem and felt the need to re-say this. Coupon Math is an odd math. In Coupon World a $10 item is “free” when you pay $10+ tax at the register and get $10 in store rewards back. I try VERY hard to ensure if I say a deal like that is “free” I say “after rewards” and I know sometimes in my haste to bring you a deal I will fail & for that I apologize and that’s why it’s very important that my MSM friends understand Coupon Math.
Here’s a deal similar to one I saw in Coupon World today:
Transaction #1:
Bought Product X
Used a Coupon
Used $5 store rewards from last week
Paid $5 OOP
Got $5 store rewards= FREE
Transaction #2:
Bought Product Y
Used a Coupon
Used $5 Store rewards from previous transaction
Paid $5 OOP
Got $5 Store rewards= FREE
I got BOTH products FREE!
That math just doesn’t add up! They paid $10 for these products and ended up with $5 in rewards! They counted the rewards they used AND the rewards they received. With coupon math we need to be consistent- either count your rewards when they are used OR when they are received but you cannot count them both times- that’s double counting and doing ourselves a big disservice. We’re spending more than we think we are but in our calculations we think we are getting a great deal.
Since I like to focus on what I SPEND rather than what I SAVE- I prefer to calculate my rewards when they are used- because that is when they are beneficial to me. That’s when they make a dent on my spending.
Each week I write a Tuesday Totals where I keep track of my SPENDING, it helps keep me on track. My “oop” (out of pocket) never calculates in the rewards earned.I will note that I earned them but they are not included in the amount I spent nor the amount “saved”. What comes out of our pocketbooks is much more important than any amount saved- in my classes I always say that I could “save 99% on a 1,000,000 purchase- that sounds great right! But then do the math & realize I just spent $10,000! Doesn’t sound so great does it?” What we spend is much more important than what we save.
My point is – be consistent. If you want to calculate rewards when earned- stay that way. If you want to calculate them when redeemed- stay that way. One warning about calculating rewards when earned: rewards often expire, get lost or forgotten. So a “free” item after $5 reward really isn’t “free” if that $5 reward gets lost and you cannot use it. That’s one reason it’s better for me to calculate them when redeemed- if it’s lost it’s never been used to make a “free” deal – I still lost the money but it doesn’t throw off my balance. I treat rebates the same way- I calculate them when they are received not when I fulfill them.
Which way do you prefer- counting when redeemed or when earned?
I fell victim to this when I first started couponing. I down count my rewards when I use them because like you said sometimes they dont get used. I hold on to ecb for good deals and forget to look at the dates sometimes and things like that.
This is a great post that clearly outlines the two options and the need to stay consistent.
I prefer to count my savings when earned, but I do admit that store rewards are not cash, and the threat of expiration and loss is a concern. My even bigger concern is store rewards for stores where I may not want or need to buy anything in the remaining time to use the rewards. Then you end up having to buy stuff just to use the rewards and your savings may largely vanish.
However, I feel that counting your savings when you redeem store credits has an even bigger weakness. It ascribes savings to products where savings isn’t earned. For example, if one has a $10 store credit and uses it to buy full price toilet paper, this method would say you got the toilet paper for free, even when it was a terrible deal.
I know that isn’t what you do here, as your deals are always genuine. I agree with your advice to stay consistent in calculating your savings so you have sound overall math, but I would say one has to (and you clearly do) consider BOTH the earning and redeeming of savings when you consider whether certain deals and worthwhile for you.
Evan, You make a SUPER point. That never even crossed my mind to use rewards on “bad deals” I guess because I see rewards as a type of “money”. Thank you for your awesome comment!
My husband finally asked me, after countless post-shopping stories of how much I’d “saved” if I was double counting my rewards.
But it’s not a penny saved until the rewards are used, and used wisely.
Excellent posts and reminders – thank you to MSM and those who have commented.